Estate taxes are typically paid by the estate prior to distribution to the beneficiaries. From IRS Publication 525, in most cases, property you receive as a gift, bequest, or inheritance isn't included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you. Similarly, for New York State, the amounts received are considered gifts (since NY does not have an inheritance tax) and are not includable in your income. Therefore, this inheritance will have no impact on your individual 1040 and NY-IT201 tax filings in April 2023.
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