The two-vehicle crash took place at an intersection in Schoharie shortly before 2pm on Saturday.
An SUV-style stretch limousine sped down a hill before hitting pedestrians outside the Apple Barrel Country Store and Cafe, the Albany Times-Union reports.
An anonymous source with knowledge of the investigation told the Associated Press that 18 of the fatalities were in the limousine.
They added that the two other victims were bystanders.
Jessica Kirby, the store's manager, told the New York Times that "multiple" customers were killed in the car park when they were struck by the vehicle.
She said: "That limo was coming down that hill probably over 60mph.
"I don't want to describe the scene.
"It's not something I want to think about."
The limousine was carrying a wedding party at the time of the deadly crash, according to US media reports.
The cause of the collision is still unknown and the victims are yet to be identified.
Some of the injured were reportedly flown to Albany Medical Center hospital.
Captain Richard O'Brien of New York State Police said: "We have several Units here investigating the details from the New York State Police including our reconstruction uni
"We have used our drone this evening and our facial identification unit as well."
National Transport Safety Board investigators made their way to scene of the collision on Sunday.
Bridey Finnagen, who lives near the scene of the crash, told ABC News: "I heard a loud bang (and) I came out my front door to see what was going on.
"I saw a lot of people here at the Apple Barrel out in the parking lot.
"Then I heard screaming.
"Then I saw this large van, a very unusual looking vehicle out here in Schoharie in the bushes and really wrecked, hit a tree."
Multiple emergency crews arrived at the scene including the American Red Cross, members of the Schoharie County Sheriff's office and the New York State police.
Mr Finnagen added: "The first responders broke some windows to try to get people out. SHARE THIS STORY USING ANY OF THE BUTTON BELOW ⬇ PLACE YOUR TEXT ADVERT BELOW ⬇⬇⬇