Common Questions — and the Objections

Who actually pays the surcharge?

Only Ulster County residents with New York State taxable income above $250,000 (single) or $500,000 (joint) pay anything — and the surcharge applies only to the portion of taxable income above that threshold, not to the first dollar earned. Under these amended thresholds, only about the top 1% of county tax filers would pay.

For the large majority of county residents, the surcharge is exactly $0. Non-residents who work in the county are not affected, and part-time residents pay only on a prorated basis.

What is "taxable income," and how is it calculated in New York?

The surcharge applies to your New York State taxable income — not your salary, paycheck, or gross earnings. For most people, taxable income is significantly lower than gross income because of deductions taken before the final number is reached. This means many people whose salary is above the threshold will owe nothing, or will owe only on a small slice.

New York taxable income (line 37 of Form IT-201) is calculated in two steps:

I keep hearing "18.75%" — is that my new tax rate?

No. The 18.75% is applied to a slice of your New York State income tax, not to your income directly. Specifically, it is 18.75% of the state income tax owed on taxable income above the threshold.

Translated into a share of total income, the real effective rate is roughly 0.1% to 1% for nearly all affected filers — reaching toward 2% only for those with tens of millions in income. The calculator shows your exact figure with a full step-by-step breakdown.

Won't wealthy residents just move away to avoid it?

The evidence says no. The most comprehensive study of millionaire migration — a peer-reviewed analysis of 45 million tax records by Cristobal Young and colleagues, published in the American Sociological Review — found that top earners are among the least geographically mobile people in the country, and that millionaire taxes produce very little out-migration.

New York's own experience bears this out: after the state raised taxes on high earners, the number of millionaires grew rather than shrank. The surcharge is also modest in absolute terms relative to the cost and disruption of relocating an entire household.

Won't this drive businesses out of the county?

The surcharge is based on personal taxable income — not on businesses, payroll, or commercial activity. It does not change the county's business taxes, property taxes on commercial buildings, or sales taxes.

In response to feedback from the business community, the amended proposal adds a carve-out for business income taxed at the entity level: income of partnerships and S corporations that elect New York's pass-through entity tax (PTET) is excluded. Local business owners who report business income on their personal returns are not caught by the surcharge for that income.

A business owner would be affected only to the extent their personal taxable income exceeds the threshold — the same as any other high earner, and only on taxable income above that line.

Why not just cut county spending instead?

Ulster County has held its property tax levy flat at about $74 million since 2012 — fourteen years — while the cost of providing services has risen more than 30%. The county has already absorbed substantial belt-tightening. And calls to simply "cut spending" only become a real alternative when they name which services to reduce — senior programs, public health, road maintenance, or the safety net residents depend on.

At the same time, federal cuts in H.R. 1 are shifting an estimated $1 trillion in costs to state and local governments, including $266 million in new annual SNAP administration costs for New York counties alone. You cannot cut your way out of a structural cost shift of that size without gutting essential services. The Fair Taxes Act provides a fair, sustainable revenue source instead.

The data makes the case plainly: Ulster County ranks 9th lowest in per-capita spending among all 62 New York counties. This is not a government that is over-spending — it is a lean operation being asked to absorb costs it did not create.

What are other counties doing?

Ulster County is not alone in facing this squeeze — and other counties are responding by raising the very property taxes the Fair Taxes Act is meant to reduce reliance on. According to the New York State Association of Counties (NYSAC), 12 New York counties exceeded the state property tax cap in their 2026 budgets — the most in a decade — with an average levy increase of about 11%.

The pressure is set to intensify. H.R. 1 shifts an estimated $168 million in new annual SNAP administrative costs onto New York counties beginning October 1, 2026, and New York is one of only three states where counties — not the state — pay the full non-federal share, so that cost lands directly on county budgets and local property taxpayers. For Ulster County specifically, the added SNAP and Medicaid burden is projected at roughly $8.5 million a year.

Nearby Sullivan County offers a preview. In June 2026, its county manager warned that without early spending cuts, Sullivan could face a property tax increase of as much as 30% in its 2027 budget — driven by a sharp drop in sales tax revenue on top of inflation, state mandates, and the looming federal cost shifts. Sullivan is now asking every department to find cuts to avoid that outcome.

This is exactly the dynamic the Fair Taxes Act is meant to change. Without a new, progressive revenue option, counties are left with regressive tools — property and sales taxes that fall hardest on working families and people on fixed incomes — or cuts to essential services. The Fair Taxes Act would give Ulster County a fairer alternative, reducing its reliance on those regressive taxes as federal costs mount.

What does the Ulster County Comptroller say about the Fair Taxes Act?

County Comptroller March Gallagher supports the county pursuing new, progressive revenue in the face of federal cuts and recurring budget gaps, and she has offered thoughtful suggestions for strengthening the proposal. We're grateful for her review — this kind of constructive conversation is exactly what the 2026 consensus-building process is for, and we share her goal of a fairer, more sustainable way to fund the county.

She has raised ideas worth discussing, including the level of the income thresholds and other revenue tools such as a real estate transfer tax. Those are separate conversations the county is always glad to have: it continually looks for ways to fund services, ideally through progressive revenue rather than the regressive property and sales taxes working families bear today.

The Comptroller and residents suggested raising the income thresholds — did the bill change them?

Yes. In response to feedback from residents and the business community since the May announcement, the sponsors amended the proposal in July 2026 to raise the thresholds from $200,000/$400,000 to $250,000 (single) and $500,000 (joint). Under the amended thresholds, only about the top 1% of county tax filers would pay anything.

To limit the revenue impact of the higher thresholds, the amended proposal also adjusts the surcharge rate from 16.75% to 18.75% of the state income tax owed above the threshold. Even with that adjustment, the effective rate for most affected filers remains modest — a single filer with $300,000 in taxable income would pay about $640 a year, roughly 0.2% of total income. The county estimates the amended proposal would generate between $9 million and $15 million annually.

The amendments also add a carve-out for business income taxed at the entity level (New York's pass-through entity tax, or PTET), so local business owners who report business income on their personal returns are not caught by the surcharge for that income. The changes are part of the 2026 consensus-building process working as intended: the sponsors heard the concerns and adjusted the proposal to address them.

Should the surcharge have a sunset or be tied to specific financial triggers?

The Comptroller suggested tying the surcharge to specific financial triggers or giving it an end date. We understand the instinct, but the pressures this revenue addresses are not temporary.

The federal cost shifts it helps offset — added SNAP administration costs, Medicaid changes, and the loss of federal programs — are ongoing, structural changes, not one-time events. Because the need is durable, a sunset or automatic trigger would undercut the surcharge's core purpose: a stable, predictable way to fund services and reduce reliance on regressive property and sales taxes.

How is this different from New York City's income tax?

New York City levies a broad-based local income tax that applies to most residents at every income level. The Fair Taxes Act is far narrower: it applies only to taxable income above $250,000 (single) or $500,000 (joint), and only to the portion above that line.

It is also collected through the existing state tax system, so it creates no new county bureaucracy and no new return for anyone to file.

Does this change my New York State income tax?

No. The surcharge does not change, reduce, or replace anyone's New York State income tax obligation. It is a separate local surcharge, administered by the state on the county's behalf. Your state return and state tax bill are unaffected.

What if I only live in Ulster County part of the year?

Part-time residents pay on a prorated basis, reflecting the portion of the year they reside in the county. People who do not reside in Ulster County are not subject to the surcharge at all.

If someone has a home in Ulster County and another home in a different county, won't they just change their address to the non-Ulster home to avoid the surcharge?

Changing the address on your mail, your driver's license, or your voter registration does not change your tax residency. Like New York State's own resident rules — and the Yonkers income tax surcharge this proposal is modeled on — county residency is determined by where you actually live, not by which address you write down. You are treated as an Ulster County resident if the county is your domicile (your true, fixed, permanent home) or if you keep a place to live in Ulster and spend more than 183 days a year in the county. Someone who continues to live in their Ulster home most of the year stays a county resident, and pays the full surcharge, no matter which address they put on a form.

If a person genuinely divides the year between two homes, they are treated as a part-year resident and pay a prorated surcharge covering only the portion of the year they were an Ulster County resident. This is the same machinery New York already uses for people who move into or out of Yonkers during the year (Form IT-360.1, Change of City Resident Status). Because the Fair Taxes Act would be collected by the State on the proven Yonkers model, the systems to determine residency and prorate the surcharge already exist and are well-tested — there is nothing new to invent, and nothing a simple address change can defeat.

New York State is nationally known for closely auditing residency, precisely because some high earners try to relocate on paper while continuing to live and work here. How many days you spend in the county, where your family and belongings are, and where you actually center your life all matter. A change of mailing address, by itself, does not end residency.

What if someone truly moves out of Ulster County but still works here? Then they are genuinely no longer a county resident, and the surcharge does not apply to them. Here the Fair Taxes Act is deliberately narrower than the full Yonkers model: it reaches only residents, and the bill expressly does not tax nonresidents on income earned from Ulster County sources. That is an intentional choice — the surcharge asks the county's own high-income residents to contribute, not commuters or people who have genuinely built their home elsewhere. The practical takeaway is the same either way: the only way out of the surcharge is to actually stop being an Ulster County resident, not to change an address while still living here.

When would the surcharge take effect?

Not immediately. The 2026 state legislative session ended without the bills passing, so they must be re-introduced in 2027. The Ulster County Legislature is building consensus in 2026 to demonstrate local support.

Only after the state authorizes the surcharge would the County Legislature adopt a conforming local law following public hearings — and the earliest it could take effect is January 1 of the year after state enactment.

How do I know the numbers on this site are accurate?

Every figure on the calculator and income tables is computed directly from the 2026 New York State income tax brackets (IT-201, Line 37) and the surcharge formula written into the legislation: 18.75% of the state tax owed on taxable income above the threshold.

The calculator shows the full step-by-step breakdown so you can check the math yourself. This site is informational and is not a substitute for professional tax advice.