State police said that two vehicles were involved in the crash on Saturday afternoon in the town of Schoharie.
Eyewitnesses described seeing an SUV-style stretch limousine leave the road and plough into a crowd of pedestrians at a store near a busy intersection.
The cause of the crash is unclear and an investigation is under way.
Bill Waterson, who said he was invited to attend the wedding that the limousine was travelling from, said he could not believe what he had witnessed, describing it as “terrible”, the Albany Times Union reported.
A reporter for local news site Spectrum News, Mercedes Williams, tweeted images and footage from the scene of the incident, which took place near a store and cafe on routes 30 and 30A in Schoharie County.
The images show a long line of emergency services vehicles lining the roads, which were closed to traffic.
Eyewitnesses said that a number of people entering and leaving the store were hit in Saturday’s incident, local media report.
“I heard this loud bang, I saw a lot of people here at the Apple Barrel [store and cafe] out in the parking lot. Then I heard screaming,” said Bridey Finnagen, who lives nearby.
New York State Police Cpt Richard O’Brien said on Sunday that the investigation was still in its “infancy stages”, adding that “several” separate police units were involved, including a “facial identification unit” and a drone team.
The National Transportation Safety Board (NTSB) later tweeted that it was also sending a team of investigators to the site of the “limo crash”.
A phone line has been set up to help assist relatives of the victims, police added.
The location of the intersection is said to be in a hilly region and local authorities had only recently banned large trucks from using sections of the route.
New York Governor Andrew Cuomo said in a statement: “My heart breaks for the 20 people who lost their lives in this horrific accident. I join all New Yorkers in mourning these deaths and share in the unspeakable sorrow experienced by their families and loved ones.”