NYS recently passed legislation called the NYS Pass-Through Entity Tax (PTET) which can provide significant tax savings for specific clients. This new legislation will help circumvent the $10,000 SALT deduction cap which was changed in 2017.
- The new legislation enables businesses to calculate and pay a NYS tax at the entity level based on their NY net business income, which can be deducted against the entity’s federal income as a business expense.
- The calculated tax can be passed through as a credit on the partner/member/shareholder’s individual return as if they made the state estimated tax payment personally.
- The new legislation requires an annual election which must be made by October 15th for all calendar year taxpayers.
- In addition, 4th Quarter estimated tax payments are due by December 15th.
What Should I Do Now?
- If you want to make the election, you must set-up an online business account with NYS for each participating pass-through entity. If you would like our help in creating the account in making the election, please reach out to us ASAP.
- If you are a self-employed individual and would like to take advantage of this new program, please reach out to us prior to October 15th.
Please contact us if you have any questions or require assistance with the election.