New York State Top Bracket (10.9%)
31 U.S.C. § 3124 Exempt
10.90% Tax Shelter
New York State T-Bills vs HYSA Calculator: State Tax Exemption
New York State residents outside the five boroughs of NYC face state income tax brackets up to 10.9% on bank interest. Treasury bills provide total immunity from NY State personal income tax. Under 31 U.S.C. Section 3124, direct obligations of the U.S. Government are strictly immune from New York State personal income taxes up to 10.9%.
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Cash & Yield Inputs
$100,000
$10k $250k $500k $1M
4.65%
4.25%
⚖️ Federal Preemption: 31 U.S.C. § 3124
Under federal law, states and municipalities are constitutionally barred from taxing interest earned on direct U.S. Treasury bills. In New York State (Outside NYC), your effective state tax rate on T-Bills is exactly 0.00%.
Tax-Equivalent Yield (TEY) in New York State (Outside NYC)
5.22%
Your bank HYSA must pay at least 5.22% APY to match a 4.65% T-Bill after paying New York State (Outside NYC) taxes.
Net Annual Cash Delta
+$715 in pocket
State Tax Eliminated $463 saved/yr
Yield & Tax Deductions: Direct Comparison
| Metric | U.S. Treasury Bill | Bank HYSA | Advantage |
|---|---|---|---|
| Gross Annual Yield | 4.65% | 4.25% | +0.40% T-Bill |
| New York State (Outside NYC) Tax Rate | 0.00% (Exempt) | 10.90% | T-Bill (-10.90% Tax) |
| Gross Annual Interest | $4,650 | $4,250 | +$400 |
| State & Local Tax Owed | $0.00 | -$463 | +$463 saved |
| Net After-Tax Cash | $2,930 | $2,214 | +$715 |
| Net After-Tax Yield | 2.93% | 2.21% | +0.72% |
| Liquidity & Safety | US Government Credit (No Cap) | FDIC Insured ($250k Cap/Bank) | T-Bill Unlimited Safety |
Multi-Balance Cash Matrix (New York State (Outside NYC))
Exact dollar amounts earned and tax saved across deposit tiers at current yields.
| Deposit Balance | T-Bill Net Cash | Bank HYSA Net Cash | State Tax Lost | Net Cash Advantage |
|---|---|---|---|---|
| $25,000 | $732 | $554 | $116 | +$179 |
| $50,000 | $1,465 | $1,107 | $232 | +$358 |
| $100,000 | $2,930 | $2,214 | $463 | +$715 |
| $250,000 | $7,324 | $5,536 | $1,158 | +$1,788 |
| $500,000 | $14,648 | $11,071 | $2,316 | +$3,576 |
| $1,000,000 | $29,295 | $22,143 | $4,633 | +$7,153 |
Automate Your Fixed Income Strategy
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❓ Common Questions
Frequently Asked Questions: New York State (Outside NYC) T-Bills vs HYSA
Answers on state tax exemptions under 31 U.S.C. 3124 and Tax-Equivalent Yield math.
Are T-Bills exempt from New York State tax for non-NYC residents?
Yes, all New York State residents receive 100% state income tax exemption on direct U.S. Treasury bills, notes, and bonds under federal statute 31 U.S.C. Section 3124.
What is the New York State Tax-Equivalent Yield?
For NY State residents in the top 10.9% bracket, the TEY is Nominal Yield divided by (1 minus 0.109). A 4.65% T-Bill equals a 5.22% APY bank savings account.
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📥 State Tax Arbitrage Guide (PDF) One-Page Reference • Instant PDF
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