The New York Pass-Through Entity Tax (PTET) is an optional state income tax imposed on a pass-through entity. Starting in 2021, Partnerships or S corporations can elect to pay New York State taxes at the company level, thereby working around the $10,000 cap on the state and local tax (SALT) deduction on a Federal individual tax return. The election for 2021 is due on October 15.
PTET is optional. Partnerships elect to pay PTET on behalf of their partners. Any partnership, multi-member LLC, or S corporation is eligible for PTET election.
The PTET elections are not available for single-member LLCs, sole proprietorships, trusts, non-profit corporations, or C corporations.
Making the election
If you are a client at Oberlander & Co and do business in New York, our dedicated team will reach out to you and provide further guidance.
If you would like to make the election by yourself see the following instructions;
The PTET election can only be made online through the entity's Business Online Services account. If the entity does not have a Business Online Services account, the authorized person will need to create one. To create a Business Online Services account, click here.
Log in to (or create) the eligible entity's Business Online Services account.
Select the 'Services' menu in the upper-left corner of the Account Summary homepage.
Select 'Corporation tax' or 'Partnership tax', then choose the 'PTET' web file from the expanded menu.
On the Form Selection page, choose 'Pass-Through Entity Tax (PTET) Annual Election.
You will be sent to the election page. The authorized member of the partnership completes the opt-in page.
If you are a cash basis tax filer, you will need to pay before the year-end
Keep in mind that your AGI will be lower which may benefit you in some cases (one example, get you below the $150,000 threshold) and may hurt you in some cases (for example, lower AGI will look less favorable for a lender).
Calculating your tax savings
This calculator addresses business income up to $2,000,000 with a tax rate of 6.85%
Check back future releases for updates that will calculate for