Warning All New York State Opportunity Zone Taxpayers: The 2021 New York State budget decouples (diverts from the Federal Tax Code) from the tax treatment of realized capital gains used under the Opportunity Zone program starting January 1, 2021. This will prevent New York taxpayers from deducting a realized capital gain properly invested under the Opportunity Zone program from their net income in calculating their New York State taxes. When considered in conjunction with the restriction of the SALT deduction, this can cause a material increase in a New Yorker’s anticipated overall tax liability. Even though the New York State budget was passed in early April 2021, these changes are retroactive to January 1, 2021. All Opportunity Zone investments are still permitted and receive the applicable benefits under the Federal Tax Code. Any New York taxpayer who realized a capital gain in 2021 and then invested that capital gain into a Qualified Opportunity Zone Fund should immediately consult their Opportunity Zone attorney, specialist and/or accountant to understand how this budgetary change directly affects them. Adam R. Sanders at Rosenberg & Estis, P.C. continues to monitor this situation and is providing clients with the applicable guidance.