Cross Border Tax Accountant New York: Help for Brits and Dual Filers in NYC

A cross border tax accountant in New York prepares your federal return, your New York State and City return and, where needed, your UK Self Assessment return as one piece of work. The New York layer matters: the state has its own residency tests, gives no credit for UK income tax, and has an estate tax threshold far below the federal one.

This guide is for British nationals living in New York City, Americans in New York with UK assets or UK income, and anyone moving between London and New York. It explains what the work involves, where New York departs from the federal rules, and what the first year after a move looks like.

What does a cross border tax accountant in New York do?

A cross border tax accountant in New York works across three systems at once: federal, New York and UK. The federal return taxes US citizens and US residents on worldwide income, and claims the foreign tax credit or the foreign earned income exclusion where income has also been taxed in the UK. The New York State resident return, which also carries New York City tax for city residents, starts from federal income but applies New York's own residency and credit rules. The UK Self Assessment return covers anyone who is UK resident for part of the UK tax year, or who has UK income such as rent, that HMRC still taxes.

Alongside the returns sits the reporting layer. A US person whose foreign financial accounts together exceeded $10,000 at any time during the calendar year files an FBAR through FinCEN, separately from the tax return, as the IRS explains in its FBAR guidance. For a Brit in New York, UK current accounts, savings, ISAs and some pensions count toward that total. Form 8938 and Form 8621 may also apply.

Our cross border tax accountant New York page sets out how our New York office organizes this work, and our page for British nationals living in the US covers the wider picture.

New York State and City residency: who is a resident?

You are a New York State resident if New York is your domicile, or if you are a statutory resident. According to the New York Department of Taxation and Finance, a statutory resident is someone who maintains a permanent place of abode in New York State for substantially all of the taxable year and spends 184 days or more in the state during that year. Both conditions must be met.

The same test applies at city level. New York City treats you as a resident if your domicile is New York City, or if you have a permanent place of abode there and spend 184 days or more in the city. New York State states plainly that all of a city resident's income, no matter where it is earned, is subject to New York City personal income tax. That city tax is in addition to state tax, and it is reported on the same state resident return.

Why the New York test is different from the federal test

The federal substantial presence test counts days across three years with a weighting: all days in the current year, one third of the days in the prior year and one sixth of the days in the year before that, with a total of 183 or more and at least 31 days in the current year, as set out on the IRS substantial presence test page. New York's statutory residence test looks only at the current year and adds the permanent place of abode condition. Someone can be a federal resident and a New York nonresident, or the reverse, in the same year.

For Brits, there is a further point. A tax treaty tie-breaker that makes you UK resident for treaty purposes is a federal concept. New York applies its own domicile and statutory residence tests, so a treaty position on the federal return should not be assumed to carry over to the New York return. This needs to be checked case by case.

Does New York give a credit for UK tax?

Generally, no. New York's resident credit is claimed on Form IT-112-R for income sourced to and taxed by another US state, a local government within another state, or the District of Columbia, according to the 2025 instructions for Form IT-112-R. A separate form covers tax paid to a Canadian province. Income tax paid to the UK is not included.

This is the single most important New York point for cross-border clients. On the federal return, UK tax on UK income can usually be credited against US tax on the same income. On the New York return, the same UK income is generally taxed in full by the state and, for city residents, by the city, with no reduction for the UK tax already paid. A New York resident with UK rental profit, UK bonuses earned before a move or UK investment income should expect a New York tax cost on that income even where the federal credit removes the federal tax.

Timing therefore matters. Income received before New York residency begins, or after it ends, may fall outside the New York resident period altogether. That is a planning question to answer before a move, not after the first year-end.

A Brit moving to New York: what happens in the first year?

The year of arrival is usually the hardest year of a New York posting, because three tax years overlap: the US calendar year, the New York calendar year and the UK tax year that runs from April 6 to April 5.

1. Federal residence starts. A Brit who meets the substantial presence test in the year of arrival is usually treated as a US resident from the first day of presence in the US that year. The IRS explains that a person who changes status during the year files a dual-status return, and that a dual-status individual married to a US citizen or resident may elect to file jointly.
2. UK residence ends, or splits. GOV.UK explains that when you move in or out of the UK, the tax year is usually split into a non-resident part and a resident part. Whether split year treatment applies depends on meeting one of the cases in the statutory residence test. Our guides to the statutory residence test and split year treatment go through the cases.
3. New York residence starts. Most arrivals file a New York part-year resident return for the first year, with income allocated between the resident and nonresident periods.
4. UK accounts become US-reportable. From the start of US residence, UK bank accounts count toward the FBAR threshold, and UK funds may become PFICs reported on Form 8621.
5. UK assets get a second tax system. The ISA keeps its UK tax-free status, but the US does not recognize it. UK pensions have their own treatment under the US/UK treaty, explained in our guide to UK pensions and the US tax treaty.

Our first-year tax guide for Brits moving to the US covers the federal side in detail. The New York layer sits on top of it.

What to do before you arrive

The weeks before US residence begins are the best planning window a Brit in New York will have. Gains realized before US residence are generally outside the US tax net. UK funds held in an ISA can be reviewed before they become a PFIC reporting problem, as explained in ISAs, PFICs and US tax. Bonus timing, share award vesting and the date you take up a New York lease all affect which tax year, and which country, picks up the income.

Illustrative example: a British manager moves from London to a rented apartment in Brooklyn in July, on a three-year assignment. She keeps her London flat and lets it out, and she has a stocks and shares ISA. For the US calendar year she files a dual-status federal return with US residence starting in July. For the UK tax year she may qualify for split year treatment from the date she leaves. The rent from the London flat stays taxable in the UK; from July it is also on her federal return, where UK tax is credited, and on her New York resident return, where it is not. Her ISA funds need PFIC analysis from July. None of these points is unusual on its own; together they need one team looking at all three returns.

US citizens in New York with UK assets

Not every New York client is a new arrival. Many are US citizens who have lived or worked in the UK and kept accounts, pensions or property there. The same layers apply in reverse: the federal return reports the UK income, the FBAR and Form 8938 report the UK accounts, and the New York return generally taxes the UK income without a credit for UK tax. A UK rental property owned by a New York resident is a common example: UK tax applies to the rent under UK rules, the federal return credits it, and New York does not.

UK accounts held by New York residents do not need to be closed, but they do need to be reported correctly each year. Where earlier years were missed, the routes back into compliance are a separate topic covered in our guide to the IRS streamlined procedures.

New York estate tax for cross-border families

New York has its own estate tax, separate from the federal one. According to the New York Department of Taxation and Finance, the basic exclusion amount for dates of death from January 1, 2026, to December 31, 2026, is $7,350,000. For comparison, the federal basic exclusion amount for 2026 is $15,000,000, according to the IRS estate and gift tax update.

New York also has a cliff. New York's guidance explains that the applicable credit is allowed only where the New York taxable estate, including includible gifts, is not greater than 105% of the basic exclusion amount. Above that level the benefit of the exclusion is lost. A New York resident estate that would owe no federal estate tax can still owe New York estate tax.

Point	Federal	New York State
Residence test	Green card or substantial presence test (183 weighted days over three years)	Domicile, or permanent place of abode plus 184 days in the year
Credit for UK income tax	Foreign tax credit generally available	Resident credit covers US states, DC and Canadian provinces, not the UK
City tax	None	New York City residents pay city tax on all income
Estate tax exclusion, 2026 deaths	$15,000,000	$7,350,000, lost above 105% of that amount
Foreign account reporting	FBAR above $10,000 aggregate; Form 8938 where thresholds are met	No separate state account report

For a British national domiciled in the UK who lives in New York, UK inheritance tax, the US/UK estate tax treaty, the federal rules for non-citizens and New York's own rules can all touch the same estate. Wills and ownership of assets should be reviewed across all of them, which is the focus of our estate and trust planning service.

What New York cross-border clients get wrong

Assuming the federal credit covers New York. The foreign tax credit removes or reduces federal tax on UK income. It does not reduce New York State or City tax.

Counting days but forgetting the abode. New York statutory residence needs both 184 days and a permanent place of abode. A lease, a family home or an apartment kept available can matter as much as the day count.

Leaving New York loosely. A New York domicile does not end because you have moved back to London. Leaving needs evidence that the new home is the primary home, and a clean final part-year return.

Treating the ISA as tax-free everywhere. The US taxes income and gains inside it, and New York generally follows federal income.

Ignoring the New York estate threshold. Planning around the federal figure alone can leave a New York estate tax bill.

Working with us in New York

US/UK Cross Border Tax — US CPAs and UK tax advisers working as one team; London, Manchester, New York, San Francisco. Our New York office is at 33 Irving Place, New York, NY 10003, and works with British nationals in the US, Americans with UK ties and UK businesses expanding into the US. We prepare the federal, New York and UK returns together, so the income and tax figures agree across all three. If you also have ties to London, our guide to a cross border tax accountant in London covers that side, and our pillar page on accountants for US and UK tax explains how to choose a firm. To discuss your own position, get in touch.