90% of the PTET required to be shown on the entity’s return or.Each quarterly payment should equal at least 25% of the annual payment, which is the lesser of: The PTET estimated tax payment application will be available by Decemfor entities that have opted into PTET and wish to make payments for the 2021 taxable year.įor tax years beginning on or after January 1, 2022, electing entities are required to pay estimated tax on the amount of PTET calculated based on current taxable year. Making a 2021 estimated tax payment by Decemis beneficial for cash basis taxpayers. However, any personal income tax estimated payments must be made by shareholders as if they were not entitled to the PTET credit. The returns are prepared and filed on a calendar-year basis. Fiscal-year taxpayers should compute PTE taxable income for the fiscal year that ends within the PTET calendar year.įor the 2021 tax year, an electing entity is not required to make estimated PTET payments but may choose to do so prior to December 31, 2021. PTET tax returns are due on March 15 of the following year for which the election applies. If the credit amount exceeds the taxpayer’s tax due for the year, the excess is an overpayment and will either be credited against the taxpayer’s following year’s estimated income tax liability or refunded without interest. If the taxpayer receives multiple PTET allocations, the credits should be aggregated on the taxpayer’s individual income tax return. Residents are treated as 100% allocation to New York while non-residents receive a share of the credit based on their pro-rated state apportionment.Įligible taxpayers can claim the PTET credit on Form IT-653, Pass-Through Entity Tax Credit, which is attached to their NYS individual income tax return. For S corporations, the calculation is: aggregate income, gain, loss and deduction multiplied by the New York State Allocation Rate.įor partnerships, a pooled method is used to separate income that is earned by New York State residents and non-residents. The graduated PTET rates are determined by the entity’s taxable income, as follows:Ĭalculating PTET taxable income differs by entity type. Election for tax years beginning on or after Janucan be made online between January 1 and March 15 of the tax year in which the election is made. Here is what you need to know to make the election and secure tax savings for you and your pass-through entity.Įlecting the Pass-through Entity Tax RateĮffective for tax years beginning on or after January 1, 2021, any partnership with a New York State filing requirement or any New York State S corporation can elect to be taxed at a new PTET rate.įor tax year 2021, this election must be made by Octothrough the entity’s NYS Business Online Services account. For shareholders and partners of New York’s S corporations and partnerships, the new pass-through entity tax (PTET) regime is providing a valuable workaround to the $10,000 federal cap on state and local tax deductions.
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