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

Several amendments were made to the PTET.

The due date to opt in to PTET under Article 24-A for 2022 was extended to September 15, 2022. The extension only applies to the 2022 PTET year.

For tax years beginning on or after January 1, 2022, eligible New York S corporations may opt in to PTET as either an electing resident S corporation or an electing standard S corporation .

PTET elections are irrevocable as of the due date of the election. This provision applies to tax years beginning on or after January 1, 2022.

For tax years beginning on or after January 1, 2022, electing entities may not apply the annualized installment method under Tax Law § 685(c)(4) to reduce or eliminate underpayment penalties.

PTET has been amended to require New York S corporations to add back income-based taxes paid to jurisdictions other than New York. New York S corporations formerly were required to add back only income taxes paid to New York under Article 9-A. This provision is effective for tax years beginning on or after January 1, 2021.

The Tax Law was also amended to clarify the treatment of pass-through entity taxes paid by an electing PTET entity. Entities must add back pass-through entity taxes paid to New York or to other taxing jurisdictions to the extent they are not added back by an individual when the individual claims a PTET credit or PTET-related resident tax credit. This provision is effective for tax years beginning on or after January 1, 2021.

For more information, see Pass-through entity tax .

[Part MM of Chapter 59 of the Laws of 2022; Chapter 555 of the Laws of 2022; Article 24-A; Tax Law § 612(b)(3)]