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. To make the election, an authorized person must opt-in on behalf of the entity 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.
For 2022 only, the deadline to opt into the New York State (NYS) PTET election has been extended to September 15, 2022. Applications are open now via the NYS website. For 2022 only, an eligible entity making its election after March 15 will be required to make an estimated payment with the election.
The amount due is based upon its election date:
- An entity making an election after March 15, 2022 and before June 15, 2022 must pay 25% of the required annual payment.
- An entity making an election on or after June 15, 2022 and before September 15, 2022 must pay 50% of the required annual payment.
- All entities, regardless of election date, must have made payments equal to 75% of the required annual payment by September 15, 2022.
Regardless of when the entity makes its election, once an entity elects into PTET, regular quarterly estimated payments must be made by the required due dates.
Please note, legislation amending the New York City PTET (NYC PTET) has passed both houses of the NYS Legislature. If this legislation is enacted into law and an entity wants to opt into the NYC PTET for 2022, the entity must first have opted into the NYS PTET by the September 15, 2022 election deadline.
If you believe a PTET would benefit your company, please reach out to a professional on the State & Local Tax team at FORVIS or submit the Contact Us form below.