Frequently asked questions about the pass-through entity tax (PTET)

If a partnership elects to participate in PTET, can it choose which partners participate in the PTET tax and credit?

An eligible entity that opts in to PTET must include all partners, members, or shareholders (resident and nonresident) that are subject to tax under Article 22 when computing its PTE taxable income. In addition, the PTET credit must be allocated to all eligible credit claimants according to the guidance in TSB-M-21(1)C, (1)I, Pass-Through Entity Tax.

Can a single-member Limited Liability Company (SMLLC) make the PTET election?

The PTET election is available to a SMLLC that elects to be treated as an S corporation for New York purposes. A SMLLC treated as a disregarded entity is not eligible to make the PTET election.

What actions can tax professionals with a Power of Attorney (POA) or an EZ Rep Tax Professional account take on behalf of their clients?

Duly authorized tax professionals may electronically file most PTET-related forms and returns on behalf of a client, including filing estimated payments, extensions, and the annual PTET return. However, the annual election may not be made by a representative because a representative is not an authorized person.

Can a partnership or S corporation formed after the annual election deadline opt in to PTET for the calendar year?

All entities, including newly formed partnerships or New York S corporations, are not eligible to opt in to PTET after the annual election deadline has passed.

If an electing entity has more than one tax year within a calendar year, may that entity make the PTET election for each short tax year?

An entity with more than one short tax year within a calendar year is only permitted to make one election for the PTET calendar year. The election may only be made for the first short tax year that ends during the calendar year.

Example: A partnership has two short tax years of January 1, 2023, through March 31, 2023, and April 1, 2023, through December 31, 2023. The partnership may only make the PTET election for the first short tax year beginning January 1, 2023, and ending March 31, 2023, and must make the election by March 15, 2023.

If an electing entity has a 52/53-week accounting period and its year-end is January 2, 2023, what is the entity’s PTET tax year?

A 52/53 week filer’s tax year is deemed to end on the last day of the calendar month nearest to the last day of the 52-53 week accounting period. Therefore, this 52/53 week filer’s tax year end is December 31, 2022; the entity may elect into PTET for 2022.

If Partnership A is owned by two partners, Partnership B and Corporation C, can Partnership A opt in to PTET?

Partnership A may opt in to PTET. It will not have any PTE taxable income or PTET credits to distribute since it does not have any partners subject to the income tax under Article 22.

If an electing PTET S corporation undergoes a federal F reorganization during the PTET tax year, will the PTET election remain effective for the successor entity?

The PTET election will remain effective for the successor entity. If the successor entity did not retain the original entity's EIN, it should file the PTET return using the original entity's EIN. PTE taxable income and PTET credits should be computed based upon K-1 amounts reported under the successor entity's EIN.

An individual or trust claiming a PTET credit should file form IT-653 reporting the original entity's EIN as the source of the credit.

If an electing PTET partnership undergoes a federal reorganization during the PTET year, will the PTET election remain effective for the successor entity?

The PTET election will remain effective for the successor entity if:

• the successor entity is a continuation of the original partnership;
• the original partnership will not be filing a final return; and
• all the income for the year, including income earned prior to the reorganization, will be filed on the successor entity’s partnership return.

If the successor entity did not retain the original entity's EIN, it should file the PTET return using the original entity's EIN. PTE taxable income and PTET should be computed based upon K-1 amounts reported under the successor entity's EIN.

An individual or trust claiming a PTET credit should file form IT-653 reporting the original entity's EIN as the source of the credit.

Can an entity file a zero return to revoke the PTET or NYC PTET election?

The PTET and NYC PTET election can be revoked up until the due date of the first estimated PTET and NYC PTET payments.

An electing entity must accurately report New York State and NYC PTE taxable income, which includes all income, gain, loss, or deduction that flows through and is taxable to a direct partner, member or shareholder. It may not file a zero return to effectively revoke the election unless the entity has no PTE taxable income.

If a new entity is formed after March 15 with a short period ending December 31, will the newly formed entity be able to make the PTET election after March 15?

The PTET election must be made by March 15 of the tax year for which it is making an election. There are no tax law provisions to allow for a later opt-in deadline for newly formed entities.

Can a pass-through entity that does not file a NYC general corporation tax (GCT) or NYC unincorporated business tax (UBT) return still make a NYC PTET election?

There is no requirement for the electing entity to file a NYC GCT return or UBT return to elect in to the NYC PTET. As long as the entity meets the qualifications as an eligible city partnership or eligible city resident S corporation, the entity may make the election. For more information, see New York City pass-through entity tax (NYC PTET).

Which taxes are offset by a PTET credit?

A PTET credit offsets all taxes computed and reported on New York State personal income tax Forms IT-201, IT-203, and IT-205. If the PTET credit exceeds the tax due for the tax year, the excess credit will be refunded without interest.

A partnership currently files group returns (Form IT-203-GR, Group Return for Nonresident Partners) on behalf of several nonresident partners. If the partnership opts in to PTET, can the partners claim the PTET credit on the group return?

Partners reporting income on Form IT-203-GR may not claim any New York State income tax credits, including the PTET credit. The nonresident partners must file individual New York State personal income tax returns (Form IT-203, Nonresident and Part-Year Resident Income Tax Return) to claim the PTET credit.

When a taxpayer claims both a PTET credit and a resident tax credit on their income tax return, in which order should the taxpayer apply the credits?

Nonrefundable credits for individuals are generally applied before refundable credits. The resident tax credit is non-refundable and must be applied before the PTET credit, which is fully refundable.

Who is eligible to claim a disregarded entity’s PTET credit?

An individual, estate, or trust that is subject to tax under Article 22 and required to report a disregarded entity’s tax information on its tax return is treated as a direct partner, member, or shareholder of the PTET entity that gave the disregarded entity a PTET credit; the individual, estate, or trust is eligible to claim the disregarded entity’s PTET credit.

Are trusts eligible for the PTET credit?

Other than a trust that is disregarded for tax purposes, a trust that is a direct partner, member, or shareholder in an electing entity is allowed a PTET credit on its personal income tax return (Form IT-205, Fiduciary Income Tax Return). The trust cannot distribute any PTET credit it receives to its beneficiaries.

Are grantor trusts that are partners, members or shareholders in an electing entity, and that file Form IT-205 where the income and tax liability flows through to the grantor, eligible to claim the PTET credit?

Grantor trusts are considered disregarded entities and, therefore, not eligible to claim a PTET credit. Instead, the individual grantor is considered the direct partner or member of the electing entity and is eligible to claim the PTET tax credit on their personal income tax return.

A partnership plans to opt in to PTET and pay the tax at the entity level. The partnership has two partners: Individual A and New York S corporation B. Can New York S corporation B claim a PTET credit?

An S corporation is not eligible to claim a PTET credit at the corporate level because it is not subject to tax under Article 22. Only a direct partner, member, or shareholder subject to tax under Article 22 that is issued a federal Schedule K-1 by the electing entity, based on the partner’s, member’s, or shareholder’s direct ownership in the electing entity, may claim a PTET credit. When computing a pass-through entity’s taxable income, an electing entity must exclude all income that flows to corporate partners, including S corporations. If the partnership opts in to PTET, only the income that flows to Individual A is included in the partnership’s PTE taxable income. Additionally, only Individual A receives a PTET credit from the partnership.

Partnership X plans to opt in to PTET and pay the tax at the entity level. Partnership X has two partners: Individual A and New York S corporation B. New York S corporation B has individual shareholders. Should New York S corporation B or Partnership X opt in to PTET?

For the individual shareholders to be eligible for the credit, New York S corporation B must opt in to PTET. The S corporation calculates its PTE taxable income based on items of income, gain, loss, or deduction that flow through to the shareholders for New York State personal income tax purposes, including any amounts the S corporation received as a corporate partner. Partnership X must also opt in to PTET to distribute a credit to Individual A.

A partnership opts in to PTET, but the individual partners have already filed their personal income tax returns. Can the individual partners claim the PTET credit next year or must they amend the returns they have already filed?

Eligible credit claimants that receive an allocated share of the PTET must claim the credit on their personal income tax (PIT) return for the same tax year the PTET annual return is filed, regardless of when the PTET is paid. If they filed their returns prior to receiving their allocated share, they must file an amended PIT return to claim the PTET credit.

Can an electing partnership include income flowing to partners that are partnerships or S corporations when calculating PTE taxable income? If so, can the lower tiered partnership or S corporation pass through the PTET credit to their partners, members, or shareholders?

An electing partnership’s PTE taxable income only includes income flowing through to direct partners taxable under Article 22. A “direct partner” is anyone that receives a federal Schedule K-1 directly from the electing entity. Only direct partners that are subject to tax as an individual or trust under Article 22 are eligible to claim the PTET credit. A partner that is a partnership or S corporation is not an eligible direct partner and cannot pass through any PTET credit incorrectly allocated to them. However, partners that are eligible partnerships or eligible S corporations may make their own PTET election.

Any PTET paid on income flowing through to ineligible partners cannot be allocated to eligible partners. If the PTET is incorrectly calculated and incorrectly allocated to ineligible credit claimants, the PTET return should be amended to correct the amount of PTE taxable income reported and to allocate the PTET only to eligible partners. If the partnership does not timely file an amended return to correctly allocate the PTET, no one will be able to claim the PTET credit based on amounts flowing through to ineligible partners.

A partnership makes special allocations to some partners. How does the partnership compute PTE taxable income and the PTET credit pools?

If the partnership made special allocations, it must make appropriate adjustments to take into account those allocations in order to fairly represent the partners’ incomes. PTE taxable income and the PTET credit pools must reflect the relative contributions of each partner to the overall PTE taxable income and PTET paid. Note: Special allocations include guaranteed payments.

If the partnership did not make any special allocations of income or loss, compute PTE taxable income and PTET credits per TSB-M-21(1)C, (1)I, Pass-Through Entity Tax, which assumes no special allocations were made.

PTET must be allocated among nonresident and resident pool members by the eligible taxpayer’s profit and loss ownership percentage within the pool. If a non-equity partner receives guaranteed payments from a partnership, but does not have any profit or loss percentage, are the guaranteed payments included in PTE taxable income, and can the non-equity partner receive a PTET credit?

Guaranteed payments that are taxable by New York at the individual partner level must be included in PTE taxable income to the same extent. The partner will be allocated PTET credit related to these guaranteed payments.

Computing PTE taxable income and PTET credits, as defined in TSB-M-21(1)C, (1)I, Pass-Through Entity Tax, assumes the partners have no special allocations of income or loss. For purposes of computing PTE taxable income and the PTET credit, special allocations include guaranteed payments because these types of payments function similarly to special allocations. If special allocations are made, the partnership must make appropriate adjustments to reflect these allocations to fairly represent the partners’ incomes.

Can guaranteed payments paid to nonresident foreign partners for services performed outside the United States be included in the PTET?

Guaranteed payments to partners are included in PTE taxable income to the same extent they are taxable by New York at the individual partner level.

Can retirement payments to nonresident partners that are protected from nonresident state taxation by Section 114 of Title 4 of the United States Code be included in the PTET base?

Retirement payments that are not taxable by New York at the individual partner level are not included in PTE taxable income.

If one of the pools (resident or nonresident) is negative, will the overall PTE taxable income only be that of the positive pool (and not be reduced by the negative pool’s PTE taxable income)?

Total PTE taxable income of a partnership consists of the income of both nonresident and resident pools. A net loss within one pool will offset income in the other pool for purposes of calculating total PTE taxable income. Limitations related to negative pools, as described in TSB-M-21(1)C, (1)I, Pass-through Entity Tax, are only applicable to the distribution to eligible partners of the total PTET paid. Partners in the negative pool will not receive any PTET credit.

If Partnership A is owned by individual partners B and C, Partnership D, and S corporation E, how is PTE taxable income computed?

PTE taxable income is computed including only amounts that flow through to individual partners B and C that are taxable under Article 22. Income flowing to a Partnership D and S corporation E is not included in PTE taxable income and cannot be allocated to individual partners B and C.

If an electing upper-tier partnership receives income from a lower-tier partnership that elected in to PTET, can the upper-tier partnership include the lower-tier partnership’s income in PTE taxable income?

The upper-tier partnership would include in PTE taxable income any amounts flowing to partners that are subject to tax under Article 22, including any income received from a lower-tier partnership. Only the income that flows through the upper-tier partnership to its direct partners is included in PTE taxable income, and the PTET is allocated only to those partners.

When a taxpayer claims a PTET credit on their personal income tax return, what amounts must the taxpayer add back?

The amount of the PTET credit claimed by the partners, members, or shareholders on their New York income tax returns must be added back only once, at the individual level, using addition modification A-219, Pass-through entity tax (PTET) deduction addback (IT-653, Pass-Through Entity Tax Credit) on Form IT-225, New York State Modifications. For more information on this addition modification, see the instructions for Form IT-225.

What PTET taxes must be added back on Form IT-225?

Tax Law section 612(b)(3) requires an addback of any income taxes claimed as a federal deduction in the current year less any amount added back under § 612(b)(43).

Example 1: An electing entity overpays its estimated taxes and receives a refund.

In 2022, an electing entity makes estimated payments of $100,000 for the 2022 PTET year. On March 15, 2023, the taxpayer files its 2022 PTET return and computes actual PTET due of $80,000. $80,000 is allocated to the eligible partners or shareholders as PTET credits. The electing entity receives a refund of $20,000 as an overpayment. The refund is issued in 2023.

The eligible partners or shareholders must add back, on their 2022 IT-225s, their share of $80,000 under § 612(b)(43), which is the amount of PTET credits claimed on their Article 22 tax returns.

The electing entity must add back on its 2022 IT-225, $20,000 under § 612(b)(3), which is the amount of federal deduction for the current year not added back under § 612(b)(43). This modification will flow through to the partners, members, or shareholders.

Example 2: An electing entity underpays its estimated taxes and pays the balance due with the PTET return.

In 2022, an electing entity makes estimated payments of $80,000 for the 2022 PTET year. On March 15, 2023, the taxpayer files its 2022 PTET return and computes actual PTET due of $100,000. The $20,000 underpayment is paid with the return. $100,000 is allocated to the eligible partners or shareholders as PTET credits. The additional $20,000 payment is treated as a deductible payment for the electing entity for federal purposes in 2023.

The eligible partners or shareholders must add back, on their 2022 IT-225s, their share of $100,000 under § 612(b)(43). Nothing is added back for tax year 2022 under § 612(b)(3) by either the partners or shareholders or by the entity.

Example 3: An electing entity underpays its estimated taxes and pays the balance due with the PTET return.

In 2022, an electing entity makes estimated payments of $80,000 for the 2022 PTET year. On March 15, 2023, the taxpayer files its 2022 PTET return and computes actual PTET due of $100,000. The $20,000 underpayment is paid with the return. $100,000 is allocated to the eligible partners or shareholders as PTET credits. The additional $20,000 payment is treated as a deductible payment by the electing entity for federal purposes in 2023. Additionally, in 2023, the entity makes $50,000 in estimated PTET payments for 2023. The entity claims a total federal tax deduction for 2023 of $70,000.

On March 15, 2024, the entity files its 2023 PTET return and computes actual PTET due of $50,000. No refunds are issued and no additional payments are made with the return. $50,000 is allocated to the partners or shareholders as 2023 PTET credits.

The eligible partners or shareholders must add back, on their 2023 IT-225s, $50,000 under § 612(b)(43). Nothing is added back for 2023 under § 612(b)(3) by either the partners or shareholders or by the entity, since the $20,000 additional payment for 2022 was added back on the 2022 Article 22 tax returns under § 612(b)(43).

What pass-through entity taxes paid to other states must be added back on an individual's IT-225?

All pass-through entity taxes paid by an electing entity to taxing jurisdictions other than New York on behalf of partners, members or shareholders must be added back at the individual level. Any tax paid for which a Resident Tax Credit (RTC) is claimed must be added back on the individual’s IT-225 under § 612(b)(43) using modification code A-220. Any remaining deductions must be added back under § 612(b)(3) using modification code A-201.

The entity must provide each partner, member, or shareholder a statement including the individual’s share of all taxes paid to each taxing jurisdiction other than New York on behalf of the Article 22 taxpayer. These taxpayers must use this information to determine the proper modifications on their IT-225s.

What pass-through entity taxes are added back when the electing entity computes PTE taxable income?

For PTE taxable income computation purposes only, an entity must add back all pass-through entity taxes paid and deducted for federal purposes in the current year, including taxes paid to New York or to other jurisdictions.

An entity has business income and separately stated items, such as charitable contributions, retirement contributions, and health insurance premiums. Are the separately stated items treated as "other deductions" on the PTE taxable income worksheets?

PTE taxable income includes all income, gain, loss, or deduction of an electing entity that flows through to and is taxable to a direct partner, member, or shareholder for New York personal income tax purposes. The amount entered on the Other deductions line of the PTE taxable income worksheet is the sum of the amounts reported as Other deductions on federal Schedule K-1, as applicable for each column.

“Other deductions” are reductions of PTE taxable income. Therefore, the amount entered on line 12 (for resident S corporations and standard S corporations) or line 13 (for partnerships) of the PTE taxable income worksheets should be entered as a negative number.

When calculating PTE taxable income, is an S corporation required to add back New York City general corporation tax (NYC GCT)?

If an S corporation computes its NYC GCT using the entire net income base or the alternative tax base, it must add back the NYC GCT when computing PTE taxable income. The amount is added back on line 14 of the S corporation PTET worksheet. See Calculating the PTE taxable income, the PTET, and the credit.  The addback is not applicable to NYC GCT calculated using the total capital base or the fixed dollar minimum base.

When calculating PTE taxable income, are estimated tax payments for NYC UBT added back?

For PTE taxable income computation purposes, an entity must add back all pass-through entity taxes paid and deducted for federal purposes in the current year, including taxes paid to New York State or to other jurisdictions. This includes payments for NYC UBT if they were paid and taken as a federal deduction during the year.

If an entity sells its assets or real estate and closes its business, is the gain on the sale included in PTET taxable income?

PTET is computed based on the electing entity’s PTE taxable income, which includes all items of income, gain, loss, or deduction that flow through and are taxable to a partner, member, or shareholder under Article 22. For purposes of computing the PTE taxable income, these are items that are reported to the partner, member, or shareholder on federal Schedule K-1. If the gain from the sale of the business assets or real estate flows through on the schedule K-1s issued by the PTET taxpayer and is taxable to a partner, member, or shareholder, then it is included in PTE taxable income. However, if the partners, members, or shareholders sell their interest in the PTET entity and it is not reported on the Schedule K-1, such as a sale of partnership interest, then it is not included in PTE taxable income even if it is taxable to a partner, member, or shareholder.

How do we calculate NYC PTET for a partnership if all of its income is exempt from UBT?

The NYC PTET is imposed on the NYC PTE taxable income of an electing entity. Generally, the NYC PTE taxable income includes all income, gain, loss, or deduction of an electing entity that flows through to a direct partner, member, or shareholder for New York City personal income tax purposes. If the income flows through and is taxable to city resident partners, then it is included in the computation of NYC PTE taxable income.

What New York State modification code is used to subtract a PTET refund received in the current year from federal taxable income?

If an S corporation overpays its prior year PTET and receives a refund that is included in federal income for the current year, the S corporation must use modification code S-217 on Form CT-225 to subtract this amount from federal income when preparing its current-year New York State S corporation return.

If a partnership overpays its prior year PTET and receives a refund that is included in federal income in the current year, the partnership must use modification code S-217 on Form IT-225 to subtract this amount from federal income when preparing its current-year New York State partnership return.

If an electing entity has a current year loss, do they need to make any estimated payments for the current year?

The required annual payment is the lesser of 90% of the PTET shown on the return for the taxable year or 100% of the PTET shown on the return for the preceding year (assuming a PTET election was made in the preceding year). If the current year’s PTE taxable income and PTET is zero or less, then the lesser of the two is $0, and no estimated PTET payments are due.

Regardless of the amount of estimated tax payments made, or whether any estimated payments were made, any unpaid PTET must be paid by March 15 following the close of the calendar year in which its tax year ends.

If an electing entity had a loss in the previous year and reported PTET of $0, do they need to make any estimated payments in the current tax year?

The required annual payment is the lesser of 90% of the PTET shown on the return for the taxable year or 100% of the PTET shown on the return for the preceding year (assuming a PTET election was made in the preceding year). If the preceding year’s PTET was $0, the lesser of the two is $0, and no estimated PTET payments are due.

If no PTET election was made in the preceding year, the required annual payment is 90% of the PTET shown on the return for the taxable year.

Regardless of the amount of estimated tax payments made, or whether any estimated payments were made, any unpaid PTET must be paid by March 15 following the close of the calendar year in which its tax year ends.

When a nonresident uses code A-219 to add back the New York State PTET on Form IT-225, should this amount be allocated?

Form IT-203 filers calculate their NYS allocated amount for the addback of the PTET credit using the same method described for modifications related to items of income, loss, or deduction. For more information, see Form IT-203 filers in the New York State addition and subtraction modifications section of the IT-225 instructions.

How is a partnership’s PTET paid to other states reported to its partners?

A partnership’s addition modifications for pass-through entity taxes paid to other states are reported to its partners on Form IT-204-IP. For nonresidents, any NYS allocated amount to be reported in Column B of Form IT-225 is reported on Form IT-204-IP, lines 20a-20f, Column B, using code EA-201.

How is an S corporation’s PTET paid to other states reported to its shareholders?

An S corporation provides each shareholder with a statement that includes the shareholder’s distributive share of income taxes paid to other states. This statement must itemize the amounts paid to each state. For more information on reporting information to shareholders, see Form CT-34-SH-I, Instructions for Form CT-34-SH.

A part-year NY resident files Form IT-203 and claims a resident tax credit for other states' pass-through entity taxes paid by the entity. Does the individual add back the full amount of the resident tax credit or an allocated amount?

The individual may not allocate the resident tax credit since the credit was derived from the individual's NY resident status.

If an entity opts in to the pass-through entity tax (PTET), but does not owe any PTET, does it need to file a return?

Yes, any entity that opts in to PTET must file an annual return for the PTET year, even if the entity does not owe any PTET for the year.

If an entity overpays its PTET estimated payments, how can it receive a refund?

Any entity that overpays its PTET payments can request a refund on its annual return.

If an entity files IT-370-PF, Application for Automatic Extension of Time to File for Partnerships and Fiduciaries, or CT-5.4, Request for Six-Month Extension to File New York S Corporation Franchise Tax Return, does that provide an extension of time to file a PTET annual return?

No, the PTET deadline may only be extended by filing an online Extension of Time to File Annual PTET Return using the taxpayer’s online services account by March 15 following the close of the PTET year.

I received a notice about my PTET filing status. How do I respond to the notice?

Taxpayers should respond to PTET notices by logging in to their Online Services account at https://www.tax.ny.gov/online/ and selecting Respond to Department Notice.

Can an entity amend its PTET return after it has been filed?

The Tax Commissioner is authorized to consent to the amendment of an original PTET return in appropriate circumstances. Amended PTET returns requested by taxpayers are subject to review and approval by the Tax Department. Regardless of whether an extension was filed, all requests must be made within one year of the extended due date of the initial return. This ensures that all partners and shareholders have adequate time to receive notice and file corresponding amended personal income tax returns to claim their updated PTET credits.

To be considered, requests to amend PTET returns must be received by the department by the following dates:

• Tax Year 2022: September 16, 2024
• Tax Year 2023: September 15, 2025
• Tax Year 2024: September 15, 2026

To make a request, an entity seeking to file an amended PTET return must submit an amended return online through the PTET Web File application. The entity must:

• log into their Online Services account and select the period they wish to amend; and
• submit their amended PTET return for review.

The entity will receive confirmation in their Online Services account that the request was received.

The amended return will be reviewed, and the entity will be notified by mail if the amended return was accepted or not.

Note: If you receive an assessment from the Tax Department, do not file an amended PTET return to protest the assessment. Follow the instructions provided with the assessment.

The PTET credit cannot be claimed on a group return. If a pass-through entity has previously received approval to file a group return, what is the process for ending the group return filing?

If the entity subsequently decides not to file a group return for the tax year, the group agent should notify the Tax Department no later than February 15 of the year in which the return is due. For more information, refer to the Estimated income tax payments section of Form IT-203-GR-I, Instructions for Form IT-203-GR, Group Return for Nonresident Partners or Form IT-203-S-I, Instructions for Form IT-203-S, Group Return for Nonresident Shareholders of New York S Corporations.

If an entity is opted into both NYS PTET and NYC PTET, are the NYS PTET estimated payments that exceed the NYS PTET liability for the year applied to NYC PTET, or does it get refunded regardless of any NYC PTET due?

The NYS PTET and NYC PTET payments are applied in aggregate to the NYS PTET liability and NYC PTET liability on the annual PTET return. If the total NYS PTET estimated payments exceed the NYS PTET liability on the annual return, the excess is applied to the NYC PTET liability as necessary. Similarly, if a NYC PTET payment exceeds the NYC PTET liability on the annual PTET return, any excess will be applied to the NYS PTET liability. Any net overpayment of NYS PTET and NYC PTET will be refunded to the entity once the PTET annual return has been processed.

If an entity makes a payment to another tax that was intended for PTET, can the payment be transferred to PTET?

An electing entity may not transfer payments between different tax types.

If an entity makes a payment to PTET that was intended for another tax, can the payment be transferred out of PTET?

An electing entity may not transfer payments between different tax types.

Can PTET payments be transferred between related entities?

Payments cannot be transferred between related entities or individuals. Estimated payments made for personal income tax purposes, even if made by the PTET entity on behalf of nonresident partners, cannot be applied to PTET.

If a partnership elects in to PTET, is it still required to make metropolitan commuter transportation mobility tax (MCTMT) payments for nonresident partners using Form IT-2658-MTA?

Yes, an electing partnership must continue to make estimated MCTMT payments as required by Tax Law section 801(a). There are no provisions in the tax law to reduce the MCTMT due by the partner's or member's anticipated tax credits.

If a Taxpayer has a federal change resulting in an amended federal return, are they required to file an amended PTET return?

Amended PTET returns are not required, even for a federal change to entity income. However, even if an entity is opted into PTET, they still would be required to report federal changes under Tax Articles 22 and 9-A, as applicable.

How does an electing entity make additional PTET payments if it is not filing a return by March 15?

To make additional payments prior to filing the annual PTET return, an entity must request an extension of time to file; if requested by the annual return due date, the extension will allow the entity to make late PTET payments and pay necessary penalties and interest through the extended due date of the return.

If a partnership or S corporation elects in to PTET, are resident partners, members, or shareholders receiving a PTET credit still required to make estimated personal income tax payments using Form IT-2105?

Taxpayers may take the PTET credit into account when computing their estimated income tax requirements for the year. For more information on computing estimated income tax, please refer to Form IT-2105-I, Instructions for Form IT-2105, Estimated Tax Payment Voucher for Individuals.