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Department of Taxation and Finance

Summary of 2021 corporation tax and personal income tax changes

Brownfield redevelopment tax credit (Articles 9, 9-A, 22, and 33)

The period to claim the tangible property credit component of this credit may be extended for qualified sites issued a Certificate of Completion (COC) on or after March 20, 2010, but prior to January 1, 2012.

If the Tax Department and the Department of Environmental Conservation (DEC) determine that the requirements for the credit would have been met if not for the restrictions related to the state disaster emergency declared pursuant to 2020 executive order 202 or any extension or subsequent executive order issued in response to the COVID-19 pandemic, the Tax Department may extend the credit component for up to 12 years after the COC was issued.

For more information, see:

  • Form CT-611, Claim for Brownfield Redevelopment Tax Credit - For Qualified Sites Accepted into the Brownfield Cleanup Program Prior to June 23, 2008, and its instructions.
  • Form IT-611, Claim for Brownfield Redevelopment Tax Credit - For Qualified Sites Accepted into the Brownfield Cleanup Program Prior to June 23, 2008, and its instructions.
  • Form CT-611.1, Claim for Brownfield Redevelopment Tax Credit - For Qualified Sites Accepted into the Brownfield Cleanup Program on or After June 23, 2008 and Prior to July 1, 2015, and its instructions.
  • Form IT-611.1, Claim for Brownfield Redevelopment Tax Credit - For Qualified Sites Accepted into the Brownfield Cleanup Program on or After June 23, 2008 and Prior to July 1, 2015, and its instructions.

[Part AA of Chapter 58 of the laws of 2021, Tax Law §§ 21, 187-g, 210-B(17), 606(dd), and 1511(u)]

Certain taxicab or omnibus corporations excluded from tax under tax law section 184 (Article 9)

Effective January 1, 2021, corporations that are classified as a taxicab or omnibus are excluded from tax under Tax Law section 184 (Article 9) if they:

  • are organized, incorporated, or formed under the laws of any other state, country or sovereignty;
  • neither own nor lease property in the state in a corporate or organized capacity;
  • nor maintains an office in the state in a corporate or organized capacity; and
  • are doing business or employing capital in the state by conducting at least one but fewer than 12 trips into the state in a calendar year.

[Part E of Chapter 59 of the Laws of 2021; Tax Law § 184(2)(b)(iv)]

Changes to the business income base and capital base tax rates (Article 9-A)

The business income base and capital base tax rates were amended as follows:

  • The tax rate on the business income base for taxpayers with a business income base of more than $5 million is 7.25% for tax years beginning on or after January 1, 2021 and before January 1, 2024.
  • The tax rate on the capital base is .1875% for tax years beginning on or after January 1, 2021 and before January 1, 2024, and 0% for tax years beginning on or after January 1, 2024.
  • The tax rate on the capital base for cooperative housing corporations and small businesses is 0% for tax years beginning on or after January 1, 2021.

[Part HHH of Chapter 59 of the Laws of 2021, Tax Law §§ 210(1)(a) and 210(1)(b)(1)]

COVID-19 family death benefit program (Article 22)

Beginning with the 2020 tax year, a new subtraction modification is allowed for any lump sum death benefit received, pursuant to the COVID-19 family death benefit program established by the Metropolitan Transportation Authority in 2020, that was included in your recomputed federal adjusted gross income (not to exceed $500,000).

Note: This subtraction modification only applies to lump sum death benefits paid under the COVID-19 family death benefit program and does not apply to any other benefit payable under that program.

For more information, see Form IT-225, New York State Modifications, and its instructions.

[Part RR of Chapter 59 of the Laws of 2021; Tax Law § 612(c)(44)]

Decoupling from federal tax treatment of gains invested in a Qualified Opportunity Fund (QOF) (Articles 9-A, 22, and 33)

For tax periods beginning on or after January 1, 2021, a taxpayer electing to exclude a gain invested in a QOF from federal income due to Internal Revenue Code (IRC) section 1400Z-2(a)(1)(A) must add back that gain when computing entire net income (ENI) or New York adjusted gross income (New York AGI).  When the gain from the QOF investment is subsequently included in federal income, the taxpayer will be allowed to subtract from ENI or New York AGI the gain (or portion of) that was previously added back when computing ENI or New York AGI. 

Corresponding amendments were made to the Administrative Code of the City of New York.

[Part DDD of Chapter 59 of the Laws of 2021; Tax Law §§ 208(9)(a)(21), 208(9)(b)(27), 612(b)(42), 612(c)(43), 1503(b)(1)(W), and 1503(b)(2)(Z); Administrative Code of the City of New York §§ 11-602(8)(a)(15), 11-602(8)(b)(22), 11-652(8)(a)(16), 11-652(8)(b)(23), 11-1712(b)(39), and 11-1712(c)(38)]

Deduction for repayment of amounts reported in a taxpayer's income in a previous tax year (Article 22)

Beginning with the 2021 tax year, a new subtraction modification is allowed for the amount of income you included in your New York adjusted gross income for a prior tax year (or years) because it appeared you had an unrestricted right to such income but which you repaid during the current tax year because after the close of the prior tax year (or years) it was established that you did not have an unrestricted right to the income (or a portion of the income).

Note: For purposes of this modification, no subtraction will be allowed if the repayment amount is included in your New York itemized deduction (or any other deduction allowed under Article 22 of the Tax Law), or if you filed Form IT-257, New York State Claim of Right Credit, using the repayment amount as the basis for the credit.

For more information, see Form IT-225, New York State Modifications, and its instructions.

[Chapter 149 of the Laws of 2021; Tax Law § 612(c)(45)]

Empire state musical and theatrical production credit (Articles 9-A and 22)

The Empire State musical and theatrical production credit has been extended through tax year 2025.

For more information, see:

[Part HH of Chapter 59 of the laws of 2021, Tax Law §§ 24-a, 210-B(47), and 606(u)]

Empire state film production and empire state film post-production credits (Articles 9-A and 22)

Several amendments were made to the Empire State film production and the Empire State film post-production credits.

The credits were extended through 2026.

The Empire State film production credit was amended removing the exception for pilots to the minimum project budget requirements.

The Empire State film post-production credit was expanded to include 11 counties: Saratoga, Warren, Washington, Columbia, Dutchess, Greene, Orange, Putnam, Rensselaer, Sullivan, and Ulster are now eligible for the additional 10% tax credit increase on labor costs.

For more information, see:

[Part F of Chapter 59 of the Laws of 2021; Tax Law §§ 24, 31, 210-B(20), 210-B(32), 606(gg), and 606(qq)]

Employer-provided childcare credit (Articles 9-A, 22, and 33)

For tax years beginning on or after January 1, 2022:

  • the credit amount is increased to two hundred percent of the portion of the credit that is allowed under Internal Revenue Code (IRC) 45F, and
  • the credit limit is increased to $500,000.

For more information, see:

[Part D of Chapter 59 of the Laws of 2021, Tax Law §§ 44, 210-B(53), 606(jjj), and 1511(dd)]

Excelsior jobs program tax credit (Articles 9-A, 22, and 33)

The Excelsior jobs program tax credit expands the Excelsior investment tax credit component to include expenditures for child care services.

The Excelsior child care services tax credit component allows for net new child care services expenditures for the operation, sponsorship, or direct financial support of a child care services program:

  • Participants receiving the Excelsior jobs program tax credit are eligible for a 5% Excelsior investment tax credit (above the traditional 2%) for the provision of child care, and
  • Participants are eligible for a 6% Excelsior child care services tax credit for ongoing net child care expenditures provided. Under this credit, the more a participant covers of ongoing employee child care services, the greater the tax credit the participant can receive.

For more information, see:

[Part D of Chapter 59 of the Laws of 2021; Tax Law §§ 31, 210-B(31), 606(qq), and 1511(y)]

Farm workforce retention credit (9-A and 22)

The farm workforce retention credit has been extended through tax year 2024.

For more information, see:

[Part FF of Chapter 59 of the laws of 2021, Tax Law §§ 42, 210-B(51), and 606(fff)]

Hire a veteran credit (Articles 9-A, 33, and 22)

The hire a veteran credit has been extended through tax year 2022.

For more information on this credit, see:

[Part B of Chapter 59 of the Laws of 2021; Tax Law § 210-B(29), 1511(g-1), and 606(a-2)] ]

Increase Wage and Withholding Filing Penalty (Article 22)

For returns filed on or after June 1, 2021, the penalty imposed on employers for failure to provide complete and correct wage and withholding information has been increased from $50 to $100 per employee whose information is incomplete or incorrect. Also, the total penalty that may be imposed on an employer per calendar quarter has been increased from $10,000 to $20,000.

[Part G of Chapter 59 of the Laws of 2021; Tax Law § 685(v)(3)]

Low-income housing credit (Articles 9-A, 22, and 33)

The Public Housing Law was amended to increase the statewide aggregate dollar amount of low-income housing credits that may be allocated to eligible low-income housing projects as shown below:

Tax credit increase
Effective date Tax credits increased to
April 19, 2021 $112 million
April 1, 2022 $120 million
April 1, 2023 $128 million
April 1, 2024 $136 million
April 1, 2025 $144 million

For more information about this credit, see:

The New York State low-income housing credit is administered by the New York State Division of Housing and Community Renewal (DHCR). For more information on this program, visit the DHCR website (www.nyshcr.org)

[Part GG of Chapter 59 of the Laws of 2021; Public Housing Law § 22(4)]

Modernization of real property transfer reporting (Tax Law Articles 22 and 31; Real Property Law Article 9)

The Commissioner is authorized to develop and implement a system to electronically file information related to real property transfers, including information reported on:

  • Form TP‑584, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax,
  • Form RP-5217, Real Property Transfer Report,
  • Form IT-2663, Nonresident Real Property Estimated Income Tax Payment Form, and
  • Form IT-2664, Nonresident Cooperative Unit Estimated Income Tax Payment Form.

To stay up to date, subscribe to Real Estate Transfer Tax and Mortgage Recording Tax to receive updates by email when new information is available on the Tax Department’s website.

[Part U of Chapter 59 of the Laws of 2021; Tax Law §§ 663, 1407, 1409, and 1423; Real Property Law § 333, effective April 19, 2021]

New York City musical and theatrical production tax credit (Articles 9-A and 22)

For tax years beginning on or after January 1, 2021 and before January 1, 2024, a new refundable credit will be available to qualified New York City musical and theatrical production companies.

The credit is equal to 25% of qualified production expenditures paid for during the credit period for the qualified New York City musical and theatrical production. Qualified New York City musical and theatrical productions are only  eligible for one credit under this program.

The amount of the credit cannot exceed $3,000,000 per qualified New York City musical and theatrical production for productions whose first performance is during the first year applications are accepted. For productions whose first performance is during the second year in which applications are accepted, the cap will decrease to $1,500,000 per qualified New York City musical and theatrical production, unless the New York City tourism economy has not sufficiently recovered as determined by the Department of Economic Development in consultation with the Division of the Budget.

For more information, see:

[Part PP Subpart B of Chapter 59 of the Laws of 2021; Tax Law §§ 24-c, 210-B(57), 606(mmm)]

Overpayment interest threshold (Articles 22 and 27) 

Beginning April 19, 2021, interest will not be paid on any personal income tax refund or corporation tax refund that is less than $5.00.

[Part QQ of Chapter 59 of the Laws of 2021; Tax Law §§ 688(a)(5) and 1088(a)(5)]

Pass-through entity tax (Articles 22 and 24-A)

The pass-through entity tax (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.

If a partnership or New York S corporation elects to pay PTET, an individual that is a partner, member, or shareholder of an electing partnership or electing New York S corporation who is subject to tax under Article 22 may be eligible for a PTET credit on their New York State income tax return.

For more information on this tax and its related credit, see:

[Part C of Chapter 59 of the Laws of 2021; Article 24-A; Tax Law §§ 606(kkk), 612(b)(43), and 620]

Personal income tax rates (Article 22)

For tax years 2021 through 2027, the top personal income tax rate of 8.82% has been replaced with the following three new tax rates:

  • 9.65% if New York taxable income is over $1,077,550 for single filers, $1,616,450 for head of household filers, or $2,155,350 for joint filers.
  • 10.3% if New York taxable income is over $5,000,000.
  • 10.9% if New York taxable income is over $25,000,000.

Real Property Tax Relief Credit (Article 22)

For tax years beginning on or after January 1, 2021 and before January 1, 2024, taxpayers may be able to claim a real property tax relief credit for qualifying real properties on their personal income tax returns.

To be eligible for the credit, New York State residents must have:

  • qualified gross income of $250,000 or less,
  • owned and resided in New York State real property for more than six months,
  • received either the STAR exemption or school tax relief credit, and
  • paid real property taxes.

The credit is computed using the amount of real property tax which exceeds 6% of the taxpayer’s income, and a specified rate based on the taxpayer’s income. To claim the credit, the computed amount must exceed $250. The credit cannot exceed $350, no matter the amount of the computation.

For more information, see Form IT-229, Real Property Tax Relief Credit, and its instructions.

[Part III of Chapter 59 of the Laws of 2021; Tax Law §606(e-2)]

Rehabilitation of historic properties tax credit (Articles 9-A, 22 and 33)

For tax years beginning on or after January 1, 2022, this credit has been expanded for small projects. Small projects may receive a credit amount equal to 150% of the credit for qualified rehabilitation expenses. A small project is defined as one where qualified rehabilitation expenses do not exceed $2.5 million.

For more information, see:

(Part CCC of Chapter 59 of the Laws of 2021; Tax law § 210-B(26), 606(oo) and 1511(y).

Restaurant return-to-work credit (Articles 9-A and 22)

For tax years that include December 31, 2021, a new refundable credit is available to qualifying New York State small business restaurants that have been impacted by COVID-19. Empire State Development (ESD) administers the credit, allocating up to $35 million to eligible businesses by issuing tax credit certificates.

Qualifying businesses are eligible for a tax credit of $5,000 per new worker hired, with a maximum available credit of $50,000 per business. Credit recipients may also be eligible to request an advance payment of the tax credit if they meet certain requirements; refer to the ESD website for details and to apply for the credit.

For more information, see:

[SubPart A of Part PP of Chapter 59 of the Laws of 2021; Economic Development Law §§ 470, 471, 472, 473, 474, 475, 476, 477, 478, and 479; Tax Law §§ 46, 210-B(56) and 606(lll)]

Subtraction modification for COVID-19 pandemic small business recovery grants (Articles 9-A and 22)

For tax years beginning on or after January 1, 2021, when computing entire net income (ENI) or New York adjusted gross income (New York AGI), a taxpayer will be allowed to subtract the amount of grants received pursuant to the COVID-19 pandemic small business recovery grant program, established in section 16-ff of the New York State Urban Development Corporation Act, to the extent the grants were included in federal income. 

[Chapter 157 of the Laws of 2021; Tax Law §§ 208(9)(a)(22) and 612(c)(45)]

Tax preparer regulation and enforcement (Articles 9, 9-A, 22, and 33)

As of April 19, 2021, the department is authorized to send a notice electronically to the online services account of a tax return preparer or facilitator that fails to register or re-register with the department or a commercial tax return preparer that fails to pay the required fee.

The tax return preparer, facilitator, or commercial tax return preparer will have 15 days to cure the failure or will be assessed the following penalties:

  • $250 for tax return preparers or facilitators for failure to register or re-register, and
  • $50 for each return filed with the Department in that calendar year (not to exceed $5,000) for commercial tax return preparers that fail to pay the required fee.

The penalties can only be waived for good cause shown by the tax return preparer, facilitator, or commercial tax return preparer.

For tax years beginning on or after January 1, 2022, tax return preparers and facilitators are required to prominently display the following information at their place of business and at any location where they provide tax return preparation and/or facilitation services:

  • a copy of their registration certificate for the current registration period; 
  • a current price list, in at least 14 point type, that includes, but is not limited to: 
    • a list of all services offered,  
    • the minimum fee charged for each service, including the fee charged for each type of federal or New York State tax return to be prepared and facilitation service to be provided, and 
    • a list of each factor that may increase a stated fee and the specific additional fees or range of possible additional fess when each factor applies; and 
  • a copy of the most recent Consumer Bill of Rights Regarding Tax Preparers published by the Department. 

A tax return preparer or facilitator who fails to comply with these requirements must pay a penalty of $500 for the first month of noncompliance and $500 for each subsequent month of noncompliance, not to exceed $10,000 per calendar year. The penalty can only be waived for good cause shown by the tax return preparer or facilitator.  

[Part S of Chapter 59 of the Laws of 2021; Tax Law §§ 32(g)(1), 32(g)(2), and 32(h)]

Utility COVID-19 debt relief credit (Article 9, Section 186-a)

Effective January 1, 2021, a taxpayer subject to the supervision of the Public Service Commission (PSC) and doing business in New  York State is allowed a credit against the tax imposed under Tax Law section 186-a. The credit is equal to the amount of debt that the taxpayer has waived in accordance with the procedures established by the PSC that was owed to the taxpayer by customers that received utility arrears assistance as certified by the PSC in the tax year. A copy of the letter issued by the PSC to the taxpayer which contains the amount of the credit allowed must be submitted with the credit claim form.

Any amount of credit not used in the current tax year may be refunded or credited as an overpayment to the next tax year (without interest). If the taxpayer’s certification is revoked by the PSC, the amount of credit claimed by the taxpayer must be added back in the tax year in which the revocation becomes final.

The Utility COVID-19 debt relief credit is administered by the PSC. For more information about the credit, visit the PSC’s website at www.dps.ny.gov or contact at secretary@dps.ny.gov

[Subpart B of Part BB of Chapter 56 of the Laws of 2021; Tax Law § 187-q]

Yonkers resident income tax surcharge and the Yonkers earning tax on nonresidents extended (Articles 30-A and 30-B)

The Yonkers resident income tax surcharge and Yonkers nonresident earnings tax have been extended through tax years beginning before 2024.

[Chapter 229 of the Laws of 2021; Tax Law §§ 1321 and 1340; Code of the City of Yonkers §§ 15-100 and 15-117]

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