Entrepreneurs in New York: taxes and retirement for 2026

For solo founders and small-business owners in New York. New York has a graduated state income tax for 2026: 3.9% to 10.9% (top rate starts at $25,000,000 for single filers). Here are the 2026 rules, a worked example and the official sources.

New York rules for entrepreneurs

State income tax (2026): New York has a graduated state income tax for 2026: 3.9% to 10.9% (top rate starts at $25,000,000 for single filers). 2026 single schedule: 3.9% to $8,500; 4.4% to $11,700; 5.15% to $13,900; 5.4% to $80,650; 5.9% to $215,400; 6.85% to $1,077,550; 9.65% to $5,000,000; 10.3% to $25,000,000; 10.9% above. NYC residents also pay NYC income tax of 3.078% to 3.876% (single, top rate over $50,000). Yonkers residents pay a surcharge.
State estimated tax: You must pay estimated tax if you expect to owe at least $300 of New York State, New York City, or Yonkers tax for 2026 after withholding and credits. Self-employed people subject to the MCTMT must also pay estimated MCTMT. Same dates as federal (April 15, June 15, September 15, 2026 and January 15, 2027). Farmers and fishermen have one installment, due January 15. Form IT-2105.
Metropolitan Commuter Transportation Mobility Tax (MCTMT) on self-employment earnings: Applies to self-employed people (including partners and members of LLCs treated as partnerships) whose net earnings from self-employment allocated to a zone of the MCTD exceed $150,000. The MCTD is NYC plus Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties. Rate: 0.60% in Zone 1 (NYC) and 0.34% in Zone 2. No credits can offset it.
LLC annual filing fee (Form IT-204-LL) for single-member LLCs: A single-member LLC treated as a disregarded entity with any New York-source income, gain, loss, or deduction owes a flat $25 filing fee on Form IT-204-LL (per the 2025 instructions, the latest published). It is due by the 15th day of the third month after the tax year ends (March 15 for calendar years).
New York City Unincorporated Business Tax (city-level, NYC only): NYC charges 4% on unincorporated business income (sole proprietors, LLCs, partnerships) allocated to the city. A liability of $3,400 or less is fully credited, and liabilities from $3,401 to $5,400 get a partial credit. NYC-resident sole proprietors can claim a partial credit against NYC personal income tax.
Freelance Isn't Free Act (General Business Law Article 44-A): In effect statewide since August 28, 2024 (https://dol.ny.gov/freelance-isnt-free-act). Freelancers hired for $800 or more of services are entitled to a detailed written contract and full, timely payment by the contract date, or within 30 days of finishing the work if no date is set. Retaliation is prohibited (GBL 1413). The NYS Attorney General can investigate complaints, and freelancers can also sue (GBL 1414).
Construction Industry Fair Play Act: Construction workers are presumed employees unless all three ABC conditions are met: free from direction and control, work outside the hiring business's usual work, and an independently established business. Misclassifying workers or paying them off the books is illegal.
NYC app-based restaurant and grocery delivery worker minimum pay (city-level): NYC requires delivery apps to pay delivery workers a minimum pay rate before tips. The rate rose to $22.13 per hour starting with the first pay period on or after April 1, 2026, and grocery delivery apps such as Instacart have been covered since January 26, 2026. Apps must pay within 7 days after the pay period with itemized statements and offer a checkout tip option.
NYC TLC minimum driver pay standard for Uber and Lyft drivers (city-level): TLC rules set a minimum per-trip payment for drivers working for high-volume for-hire services such as Uber and Lyft. It is not an hourly wage. Rates effective March 1, 2026 for non-wheelchair-accessible trips are $1.283 per mile and $0.681 per minute.
State retirement program: New York State Secure Choice Savings Program is live. It is built around W-2 employers and does not cover 1099 contractors through the employer mandate.

Federal rules for 2026

Entity choice changes your taxes

A single-member LLC is taxed like a sole proprietorship unless it elects S-corp status. The S-corp can lower payroll tax but adds payroll, a separate return and a reasonable-salary requirement.

Retirement as a tax lever

With no employees, a Solo 401(k) allows up to $72,000 in 2026. With employees, a SEP IRA or a 401(k) must generally cover eligible staff too.

Quarterly estimated taxes

No one withholds tax from self-employment income, so you generally pay estimates four times a year if you expect to owe $1,000 or more. For 2026 income the federal dates are April 15, June 15 and September 15, 2026, and January 15, 2027. Paying 100% of last year's tax (110% if your AGI was over $150,000) in four equal installments avoids the underpayment penalty.

Self-employment tax

On top of income tax, self-employed people pay 15.3% on 92.35% of net profit: 12.4% Social Security up to the 2026 wage base of $184,500, plus 2.9% Medicare with no cap. Half of it is deductible.

A worked example

A solo founder with $200,000 of profit in 2026
Self-employment tax as a sole proprietor	$28,234
Solo 401(k) maximum as a sole proprietor	$61,677
Payroll tax saved as an S-corp on a $100,000 salary	$12,934
Solo 401(k) maximum as that S-corp	$49,500

Federal figures only. S-corps add running costs (payroll, an 1120-S return, state fees) not shown here. Computed from 2026 IRS limits (Notice 2025-67, Rev. Proc. 2025-32) and the SSA wage base.

Free tools

S-corp vs Solo 401(k) calculator Solo 401(k) vs SEP IRA calculator Quarterly tax calculator

Guides by job and platform

Solo founders Small business owners Online sellers Food truck owners Self-Employed Workers

Amazon (Selling on Amazon) eBay Gumroad Kajabi

Questions

Do entrepreneurs in New York pay state income tax?

New York has a graduated state income tax for 2026: 3.9% to 10.9% (top rate starts at $25,000,000 for single filers). 2026 single schedule: 3.9% to $8,500; 4.4% to $11,700; 5.15% to $13,900; 5.4% to $80,650; 5.9% to $215,400; 6.85% to $1,077,550; 9.65% to $5,000,000; 10.3% to $25,000,000; 10.9% above. NYC residents also pay NYC income tax of 3.078% to 3.876% (single, top rate over $50,000). Yonkers residents pay a surcharge.

When are New York estimated tax payments due for 2026?

You must pay estimated tax if you expect to owe at least $300 of New York State, New York City, or Yonkers tax for 2026 after withholding and credits. Self-employed people subject to the MCTMT must also pay estimated MCTMT. Same dates as federal (April 15, June 15, September 15, 2026 and January 15, 2027). Farmers and fishermen have one installment, due January 15. The state form is IT-2105.

Are there other New York taxes for self-employed entrepreneurs?

Metropolitan Commuter Transportation Mobility Tax (MCTMT) on self-employment earnings: Applies to self-employed people (including partners and members of LLCs treated as partnerships) whose net earnings from self-employment allocated to a zone of the MCTD exceed $150,000. The MCTD is NYC plus Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester counties. Rate: 0.60% in Zone 1 (NYC) and 0.34% in Zone 2. No credits can offset it. LLC annual filing fee (Form IT-204-LL) for single-member LLCs: A single-member LLC treated as a disregarded entity with any New York-source income, gain, loss, or deduction owes a flat $25 filing fee on Form IT-204-LL (per the 2025 instructions, the latest published). It is due by the 15th day of the third month after the tax year ends (March 15 for calendar years). New York City Unincorporated Business Tax (city-level, NYC only): NYC charges 4% on unincorporated business income (sole proprietors, LLCs, partnerships) allocated to the city. A liability of $3,400 or less is fully credited, and liabilities from $3,401 to $5,400 get a partial credit. NYC-resident sole proprietors can claim a partial credit against NYC personal income tax.

Track it in one place

Gigaverse estimates your quarterly taxes from what you actually earn, logs business trips, categorizes expenses from your bank and answers money questions with your own numbers. Retirement accounts are coming soon.

Free · Takes 10 seconds · First 1,000 in line get launch perks

On Android? Get the app on Google Play

Get it onGoogle Play On iPhone? Use it on the web

More in New York

Consultants Freelancers Content Creators Gig Workers Bartenders & Servers Construction & Trades

New York Buffalo

Sources

State and local facts researched from official sources and independently re-checked; last verified October 2026, next scheduled review 2027-01-02. Educational information for 2026, not tax, legal or investment advice. Rules change; check the official sources listed and a tax professional for your situation. Gigaverse AI, Inc. is a financial technology company, not a bank, and not itself a registered investment adviser or broker-dealer.