May 11, 2022

Additional Opportunity for New York Pass-Through Entity Tax Election

By Barry Halpern, Partner, Tax & Business Services & Lisa Haime, Senior Manager, Tax & Business Services

Additional Opportunity for New York Pass-Through Entity Tax Election State & Local Tax

On May 6, 2022, New York Governor Kathy Hochul signed a law extending the deadline to elect the pass-through entity tax (“PTET”) in New York for 2022. The new law also modifies the requirements for estimated payments.

Many pass-through entities missed the deadline to elect the PTET. In response, New York extended the deadline from March 15, 2022, to September 15, 2022.

The deadline for certification to be taxed as an electing resident S-corporation is still March 15, 2023. We are waiting for guidance from New York State on the manner of certification.

The bill also modifies the estimated 2022 PTET payments for both partnerships and S-corporations. For the election to be valid, estimated payments will be as follows:

  • For PTET elections made after March 15, 2022, and before June 15, 2022, 25% of the annual payment will be due before June 15, 2022 with its election.
  • For PTET elections made after June 15, 2022, and before September 15, 2022, 50% of the annual payment will be due before September 15, 2022 with its election.

For all entities making the election, 75% of the annual payment will be due by September 15, 2022.

There is also a change to 2022 PTET estimated payments. For resident S-corporations that made their election on or before March 15, 2022, 25% of the annual payment (calculated as if the resident S-corporation was a standard S-corporation) will be due on June 15, 2022.

For additional information regarding the update to the New York tax law and how it may affect you or your business, please contact Barry Halpern at barry.halpern@marcumllp.com or Lisa Haime at lisa.haime@marcumllp.com.