For those taxpayers that elected to pay the NYS pass-through entity tax for 2021 (which was newly enacted for tax years starting in 2021) and may elect again for tax year 2022, some important compliance deadlines are coming up.  Although the state is still providing guidance regarding some items, please be aware of the deadlines below as you are working through your 2021/2022 taxes.

2021 TAX YEAR:

On August 25, 2021, New York State released guidance regarding the New York State pass-through entity tax (PTET) election which allows owners of pass-through entities (PTE) to receive a federal deduction for the New York State income taxes paid by the PTE.

The PTET is a tax, based on the taxable income of the pass-through entity. The PTET paid by the entity reduces the taxable income passed-through to each individual partner/shareholder. Each partner/shareholder then receives a dollar-for-dollar refundable credit for their direct share of the PTE tax paid.