August 11, 2022 LAW FIRM CLIENTS | New York State reminding partnerships of September 15 deadline to opt into state's PTET for 2022 Law firms organized as partnerships should note that deadline for opting in to the New York State (NYS) passthrough entity tax (PTET) for 2022 is September 15, 2022. To make the election, a partnership must use the state's PTET Annual Election application and make an estimated payment. In a bulletin posted on August 9, 2022, the New York State Tax Department recommends that taxpayers not wait until the deadline to make the election, as some may need assistance from state tax "representatives to update their accounts before they can opt in." The NYS PTET is "an optional tax that partnerships or New York S corporations may annually elect to pay on certain income for tax years beginning on or after January 1, 2021," the bulletin states. Once the election is made, it is irrevocable for the tax year at issue. Further, the bulletin explains that "only an authorized person can make the election on behalf of an eligible entity. Tax professionals cannot make the election on behalf of their clients." If a partnership elects to pay the PTET, its partners, members or shareholders subject to NYS personal income tax may be eligible for a PTET credit on their state income tax returns, the bulletin adds. Finally, the bulletin notes that legislation amending the New York City (NYC) PTET has passed both houses of the state legislature. If the legislation becomes law, opting in to the NYC PTET will require first having timely opted in to the NYS PTET. More information is available on the NYS PTET webpage. ———————————————
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