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Foreign Earned Income Exclusion in New York 2026

Calculate your foreign earned income exclusion tax savings in New York. With New York's 10.9% top state tax rate, your combined savings are higher.

New York Tax Overview

State Income Tax
10.9%
progressive
Sales Tax
4%
avg combined: 8.52%
Property Tax Rate
1.62%
Median Income
$74,314

Top rate 10.9%. NYC adds 3.078-3.876%. Combined up to 14.776%. Estate tax 'cliff' at $6.94M.

New York Income Tax Brackets (Single)

4%
$0 - $8,500
4.5%
$8,500 - $11,700
5.25%
$11,700 - $13,900
5.5%
$13,900 - $80,650
Your bracket
6%
$80,650 - $215,400
6.85%
$215,400 - $1,077,550
9.65%
$1,077,550 - $5,000,000
10.3%
$5,000,000 - $25,000,000
10.9%
$25,000,000 +
$1,375
Est. Total Savings
$126,500
Max Deduction
Exclusion
Deduction Type
27.5%
Combined Tax Rate

Foreign Earned Income Exclusion Savings Calculator for New York

$
$

Federal Savings

$1,100

22% bracket

New York State

$275

5.5% rate

Total Savings

$1,375

27.5% combined

At a 27.5% combined tax rate in New York, every $1,000 in deductions saves you $275 in taxes.

Savings by Tax Bracket in New York

10%
$775
12%
$875
22%
$1,375
24%
$1,475
32%
$1,875
35%
$2,025
37%
$2,125

Includes 5.5% New York state tax on top of federal savings.

Eligibility Requirements

US citizens/residents living and working abroad

  • 1$126,500 exclusion 2024
  • 2Bona fide residence or physical presence test
  • 3Tax home must be foreign

New York residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 10.9%.

Common Mistakes to Avoid

  • !Not meeting presence test
  • !Claiming with foreign tax credit
  • !Forgetting to claim the deduction on your New York state return (missing up to 10.9% additional savings)

New York Filing Tips

NYC residents face the highest combined rates nationally. The estate tax 'cliff' means losing the entire exemption if your estate exceeds 105% of the threshold. NY aggressively audits departing residents.

Required Tax Forms

Form 2555

File these forms with your federal tax return to claim the foreign earned income exclusion. New York may require additional state-specific forms.

Other Tax Deductions in New York

Gambling Loss Deduction

Miscellaneous

~$2,500
est. savings

Theft & Fraud Loss Deduction

Miscellaneous

~$6,250
est. savings

Foreign Housing Exclusion

Miscellaneous

~$10,000
est. savings

Electric Vehicle Tax Credit

Miscellaneous

~$7,500
est. savings

Mortgage Interest Deduction

Housing

~$4,375
est. savings

Property Tax Deduction

Housing

~$2,750
est. savings

Home Office Deduction

Housing

~$1,500
est. savings

Home Energy Tax Credit

Housing

~$1,800
est. savings

Foreign Earned Income Exclusion in Neighboring States

Connecticut

6.99% top rate (progressive)

~$32,943
+31,568 vs New York

New Jersey

10.75% top rate (progressive)

~$37,216
+35,841 vs New York

Pennsylvania

3.07% top rate (flat)

~$28,489
+27,114 vs New York

Vermont

8.75% top rate (progressive)

~$34,943
+33,568 vs New York

Massachusetts

5% top rate (flat)

~$30,682
+29,307 vs New York

Tax Calculators for New York Cities

New York CityNew YorkOyster BayBuffaloNorth HempsteadBabylonYonkersRochesterHuntingtonSyracuse

Calculate Your Full Tax Savings in New York

Use our free tax calculators to optimize your entire tax return for New York.

Income Tax CalculatorNew York Income TaxFull Foreign Earned Income Exclusion Guide

Frequently Asked Questions

How much can I save with the Foreign Earned Income Exclusion in New York?

In New York, the foreign earned income exclusion can save you an estimated $1,375 per year on a $5,000 deduction. This includes $1,100 in federal tax savings and $275 in New York state tax savings at the 5.5% marginal rate. The national average savings is $25,000/year.

What is the New York state income tax rate?

New York has a progressive income tax system with a top rate of 10.9%. Top rate 10.9%. NYC adds 3.078-3.876%. Combined up to 14.776%. Estate tax 'cliff' at $6.94M.

Who qualifies for the Foreign Earned Income Exclusion in New York?

US citizens/residents living and working abroad. The eligibility requirements are the same whether you live in New York or another state, as this is a federal tax deduction. However, your total savings will vary based on New York's 10.9% top state tax rate.

What tax forms do I need to claim the Foreign Earned Income Exclusion in New York?

To claim the foreign earned income exclusion, you need to file Form 2555 with your federal return. New York residents should also check if the state allows this deduction on their state return for additional savings of up to 10.9%. Filing status affects your deduction limits and tax bracket.

Is the Foreign Earned Income Exclusion better in New York than in states without income tax?

Yes, New York residents benefit more because the state's 10.9% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 27.5% means more savings per dollar deducted.

What is the standard deduction in New York for 2026?

New York's standard deduction is $8,000 for single filers and $16,050 for married filing jointly. NYC residents face the highest combined rates nationally. The estate tax 'cliff' means losing the entire exemption if your estate exceeds 105% of the threshold. NY aggressively audits departing residents.

Related Calculators

Gambling Loss Deduction in New York

Avg savings: $2,000/year

Theft & Fraud Loss Deduction in New York

Avg savings: $5,000/year

Foreign Housing Exclusion in New York

Avg savings: $8,000/year

Electric Vehicle Tax Credit in New York

Avg savings: $7,500/year

Mortgage Interest Deduction in New York

Avg savings: $3,500/year

Property Tax Deduction in New York

Avg savings: $2,200/year