A newlywed couple, four sisters and two brothers are among the 20 dead after a limousine on its way to a birthday party ignored a stop sign and ploughed into a 4WD in the deadliest US transport accident in almost a decade.

Witnesses reported bodies on the ground and broken tree limbs around the accident site in Schoharie, about 270 kilometres north of New York City.

An aunt of one of the victims in the vehicle said the group had been on the way to a birthday celebration.

Valerie Abeling told AP “our lives have been changed forever” after newlyweds Erin Vertucci and Shane McGowan were killed.

She said Ms Vertucci was 34 and Mr McGowan was 30.

The limousine was travelling south-west on Route 30 in Schoharie about 2pm on Sunday when it failed to stop at a T-junction with state Route 30A, State Police First Deputy Superintendent Christopher Fiore said.

It veered across the road and hit an unoccupied vehicle, killing the driver and 17 passengers, as well as two people outside of the vehicle.

The crash “sounded like an explosion,” said Linda Riley, of nearby Schenectady, who was in a car parked nearby at the time.””

When she got out of her vehicle, she saw a body on the ground, she said. People started screaming.

“I don’t want to describe the scene,” she told The NY Times. “It’s not something I want to think about.”

The accident happened outside the Apple Barrel Country Store + Cafe. Manager Jessica Kirby said customers were hit near the shop’s carpark.

“That limo was coming down that hill probably over 60 miles per hour,” she said. “All fatal.”

In a Facebook post, the store said it said would stay open.

“Yes, are open today. And could use your hugs,” it said.

“We are doing our best to cope and grieve. We are a big family at the Apple Barrel, and part of the bigger family of Schoharie. We cope by being together. And that is why we are open.”

Resident Bridey Finnagen reported hearing a “loud bang” from down the road. “I saw a lot of people here at the Apple Barrel out in the parking lost. 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,” she told local media.

“The first responders broke some windows [on the vehicles] to try to get people out.

“I believe the jaws of life were here on the side of one of the fire trucks.”

Authorities didn’t release names of victims or other specifics, but state police set up a hotline for family members.

The New York Times reported that the accident happened at the intersection of two highways, one a steep downhill road, that residents had long warned was notoriously dangerous.

US National Transportation Safety Board chairman Robert Sumwait said the accident would be investigated.

“This is one of the biggest losses of life that we’ve seen in a long, long time,” he said.

A hair brush and a fragment of tail light in the dirt at scene of a accident in Schoharie which killed 20. pic.twitter.com/ZTLlt8Mn7R

— Jesse McKinley (@jessemckinley) October 7, 2018

New York governor Andrew Cuomo released a statement saying, “My heart breaks for the 20 people who lost their lives in this horrific accident on Saturday in Schoharie. I commend the first responders who arrived on the scene and worked through the night to help.

“State police are working with federal and local authorities to investigate the crash, and I have directed state agencies to provide every resource necessary to aid in this investigation and determine what led to this tragedy.”

GoFundMe pages have been started for the families of some of the victims.

-With AAP