Tax Planning for Physicians in New York City (2026)
New York City physicians carry one of the heaviest combined state and local tax loads in the country. Residents pay New York State income tax and a separate city income tax, and self-employed physicians can also owe the Metropolitan Commuter Transportation Mobility Tax (MCTMT).
2026 at a glance
| New York State top rate | 10.9% (over $25 million); 9.65% from about $1.08 million |
|---|---|
| NYC resident income tax | 3.078% to 3.876% |
| Nonresidents who work in NYC | No city income tax (state tax still applies) |
| Pass-through entity tax | State PTET and a separate NYC PTET are available |
| MCTMT | Applies to self-employment earnings in the MCTD above a threshold |
Who owes the city tax
The New York City personal income tax applies to residents of the five boroughs on all of their income, wherever it is earned. A physician who lives in New Jersey, Westchester or Long Island and commutes into Manhattan does not pay the city tax, but still owes New York State nonresident tax on New York-source income.
Planning priorities for NYC physicians
- Use both pass-through entity taxes. Partnerships and S corporations can elect the New York State PTET and the New York City PTET. Paying state and city tax at the entity level turns a nondeductible personal tax into a deductible business expense, which matters more now that the federal SALT deduction phases back down to $10,000 for higher incomes.
- Plan residency deliberately. New York audits people who claim to have moved. Domicile, the 183-day statutory residency test and keeping a permanent place of abode in the city all affect whether you still owe city tax.
- Coordinate retirement plans. With combined marginal rates near 15% at the state and city level, pre-tax contributions to 401(k), 457(b), cash balance and defined benefit plans save more here than in most places.
- Watch the MCTMT. Self-employed physicians and partners with net earnings allocated to the MCTD file the MCTMT with their state return.
See the full New York physician tax guide.
More physician tax guides
- Other New York cities: Yonkers, Buffalo, Rochester, Albany, Long Island.
- State rules: New York physician tax guide and all 50 state guides.
- By specialty: Psychiatrists, Anesthesiologists, Dentists, Ophthalmologists and every specialty.
- Core strategy: tax planning for physicians, tax planning for medical practice owners, advanced strategies for high-income physicians and S corporation tax planning for physicians, plus the physician tax glossary.
Frequently asked questions
Do I pay NYC income tax if I live in New Jersey and work in Manhattan?
No. The NYC personal income tax applies to city residents. You will still owe New York State nonresident tax on income earned in New York, and New Jersey generally gives you a credit for it.
Can my practice pay NYC tax at the entity level?
Yes. Partnerships and S corporations with NYC resident owners can elect the New York City pass-through entity tax in addition to the state PTET.
Get a tax plan built for your situation
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Sources
This article is for general educational purposes and is not tax, legal or investment advice. Tax law changes often and its application depends on your facts. Figures reflect 2026 rules as published by the sources listed above. Consult a qualified professional before acting. See our editorial policy.