Out-of-State Sellers & the New York Non-Resident Tax (Form IT-2663)
If you've moved out of New York and are selling your old house, there's a closing-table surprise worth knowing about in advance: the non-resident estimated tax. It sounds like a penalty for leaving. It isn't.
Off Market Investors is a family-owned cash buyer based in Glen Cove, New York. Call and you'll reach us directly — not a call center. Here is the non-resident tax, demystified.
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What it really is
New York requires a non-resident seller to prepay estimated state income tax on the gain from the sale at closing. It's computed at the highest New York income-tax rate (currently 10.9%) on your gain, and reported on Form IT-2663. It is a prepayment of tax you may owe — not a separate or extra tax.
It's tied to the deed
The form goes to the county clerk with the deed, and the deed will not record without it. Even if you owe nothing — because the home was your principal residence or the sale qualifies for a like-kind exchange — you still file IT-2663 to claim the exemption and avoid a recording delay.
Getting it credited back
Because it's based on your gain, it's an estimate, and the amount you pay is credited on your New York income-tax return for the year of sale. If you overpaid, you reconcile it there. The federal principal-residence exclusion (Section 121) can reduce or eliminate the gain in the first place.
- Determine your residency — New York residents don't file IT-2663.
- If non-resident, calculate your gain (sale price minus your adjusted basis and selling costs).
- Estimate the tax: the gain times the highest New York rate (currently 10.9%).
- Check the Section 121 principal-residence exclusion — it may reduce or eliminate the gain.
- File Form IT-2663 with the deed (even to claim an exemption), then reconcile on your NY return.
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General information only, not legal or tax advice. Confirm your situation with the New York State Department of Taxation and Finance and a New York tax professional or real estate attorney.