New York State PTET Addback – Effective for 2021
For tax years beginning on or after January 1, 2021, General Corporation Tax (“GCT”) and Banking Corporation Tax (“Bank Tax”) taxpayers are now required to add back New York State Pass Through Entity Tax (“PTET”) deducted from Federal Taxable Income.
Unincorporated Business Tax (“UBT”) taxpayers were previously required to add back New York State PTET deducted in 2021. DOF will not apply any interest or impose penalties on additional tax for GCT and Bank Tax taxpayers as a result of these addback amounts if paid by June 15, 2022.
Payment of tax or estimated tax resulting from the addback and otherwise due on or before June 15th, 2022, must be made by all affected taxpayers by June 15th, 2022, in order to receive the relief from interest and penalties described above. Those GCT and Bank Tax taxpayers who have already filed a 2021 tax return must file an amended return showing the addback of the New York State PTET.
Taxpayers filing an original or amended return who are seeking this relief must enter special condition code “PT” in the special condition code box at the top of the return. Please see Finance Memorandum 22-2 for more details, information and instructions.
New York City Pass-Through Entity Tax (NYC PTET)
The NYC PTET is an optional tax that city partnerships or city resident New York S corporations may annually elect to pay on certain income for tax years beginning on or after January 1, 2022. If an eligible entity elects to pay the NYC PTET, its partners, members or shareholders subject to tax under Article 30 may be eligible for a credit for PTET paid on their New York City personal income tax returns. This tax is administered by the New York State Department of Taxation and Finance. For more information visit https://www.tax.ny.gov/bus/ptet/city.htm#optin.
Important: Any entity that wants to opt in to the New York City pass-through entity tax for 2022 must have opted in to the New York State pass-through entity tax by September 15, 2022. An electing entity is not required to make estimated tax payments for the 2022 NYC PTET. However, it may choose to make estimated tax payments for 2022 online prior to December 31, 2022, when the application is available on the New York State website. The quarterly payment requirement will begin in 2023.