Perhaps the only thing harder than finding valued employees these days is having to lay off employees when business slows down. The New York State Department of Labor (NYS DOL) has a long-standing program that gives you an alternative to lay-offs. It’s called The Shared Work Program. Here are some highlights…

Who Is Eligible?

If you have two or more full-time employees in NYS; you have paid into unemployment insurance for at least four consecutive calendar quarters; and participation helps your organization avoid layoffs, you are eligible to apply.

What Is the Shared Work Program?

Rather than lay off valued talent during a slow period, the program allows you to reduce hours across the board for all employees or within a defined workgroup. Employees who are impacted can make up a portion of lost wages due to a reduction in hours via unemployment insurance.

For example, let’s say work is slowing down. Rather than lay off employees in the XYZ department, you file a Shared Work Plan with the NYS DOL and receive approval to reduce XYZ employees’ hours 20% for 10 weeks. Impacted employees can file for Unemployment Insurance and collect 20% of their weekly benefit. (That’s in addition to the reduced pay they receive from you for working the reduced hours.) As a result, the employees have more income than if they were laid off, and you have a valuable way to retain employees.

When should I get the process started?

Reach out to the Shared Work Program less than one month before the proposed start date. You’ll use that time to create a Shared Work Plan and apply for program approval.

Where can I learn more and apply?

For program details – including FAQs, informational videos, a program fact sheet, references from organizations and employees who have benefited from the program, how to apply, and more, click here.

Why does the NYS DOL offer this program?

This win-win program supports organizations during challenging times by helping them retain valued employees. At the same time, it helps employees stay employed and make up a portion of wages lost due to a reduction in hours.

How?

Develop a Shared Work plan and then apply online. You’ll be assigned a dedicated representative to help guide you. Approvals are granted within 48 hours and can be adjusted weekly. Once business picks up, you can quickly resume normal operations with the same employees you have come to count on…and who knows they can count on you.

We hope this reminder proves useful. Please know you can always count on RBT CPAs for all your accounting, tax, audit, and advisory needs. To learn more, give us a call today. RBT CPAs does not outsource work to any other country. All of our work is prepared in the U.S.A. 

Since April 6, the Internal Revenue Service’s (IRS’s) $80 billion plan – funded under the Inflation Reduction Act (IRA) – has fueled a lot of analysis and speculation among media sources, industry groups, political parties, and American taxpayers in general.

While numerous resources sharing their opinions cater to certain demographics and affiliations, only time will tell whose interpretation is most accurate (or whether they are all accurate in some way). In the meantime, we at RBT CPAs have taken a detailed look at the plan, as well as thoughts from other sources. Following is our initial take on what is sure to be the topic of many office and dinner discussions in the days ahead.

To start with the basics, the plan defines five key objectives, which will be achieved through 42 key initiatives with over 190 programs and 200 milestones between 2023 and 2031:

1. Dramatically improve services to help taxpayers meet their obligations and receive the tax incentives for which they are eligible
2. Quickly resolve taxpayer issues
3. Expand enforcement on taxpayers with complex tax filings and high dollar noncompliance
4. Operate more effectively using innovative technology, data, and analytics
5. Attract, retain, and empower a highly skilled, diverse workforce and culture

Based on these objectives alone, we think it is fair to say the plan is comprehensive and addresses the critical components required to transform the agency and bring it into the 21^st century. Upon a closer look at the plan, some additional observations began to emerge:

There is going to be more to the story.

The first page indicates the plan covers 2023 to 2031. Yet, most of the milestones outlined in the plan appear to be accomplished by 2025 and 2026. While we agree it is strategic to reassess and refine plans along the way, we do believe this opens the door for a sequel to the plan in a few years, and there is no telling how the story will play out.

The main goal is hiding in plain sight.

Although there is a lot of emphasis on service, technology upgrades, and building a skilled workforce and the right culture, it is striking how often the plan references and returns to enforcement. When you look purely at the financial investment and timeline, it is clear the biggest priority is to address the “tax gap.” Over half the planned investment targets enforcement. Most of the milestones for enforcement show progress being driven by 2025. Even the mission statement published at the start of the plan seems to make clear what’s the top priority: “Provide America’s taxpayers top-quality service by helping them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.”

Even with multiple references to the enforcement focus being on high income and high wealth individuals, partnerships and corporations, we can’t help but notice the four words that follow the discussion on how this will impact those making under $400,000 annually: “All efforts will comply with your directive not to use IRA resources to raise audit rates on small businesses and households making under $400,000 per year, relative to historic levels.” So, while there is no doubt enforcement will primarily target high income earners, the same percentage of lower earners audited today will continue to be audited in the future. The enhanced workforce and technology capabilities, we speculate, may result in audits garnering more income for the IRS than in the past.

We do not know how far back the new-and-improved IRS will reach in terms of enforcement.

As noted on the IRS webpage on audits, “Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually do not go back more than the last six years. The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly, most audits will be of returns filed within the last two years.” We only mention this because it goes hand in hand with our prior point: with more enforcement, not only will there be more audits, but each one may be more fruitful for the IRS than what they are now.

There are three key “ifs” that may impact the plan’s execution.

First, each program in the plan highlights numerous co-dependencies or contingencies – meaning all the stars will have to align for this to be executed as planned.

Second, there are a number of references to the importance of annual IRS funding and increases for inflation. Should this not occur, funding for the plan – and its impact – may erode. (See Commissioner Werfel’s cover memorandum stating: “To cover steady state operations, annual discretionary appropriations must be fully maintained at the FY 2022 level, including growth for inflation and pay raises. Any reduction in annual discretionary funds – including not providing for inflationary increases to maintain current levels – will require IRA funding to be shifted to general operations.”)

And third, the plan relies on a significant uptick in all types of staffing at the same time the talent pool is shrinking and competition to attract and retain highly skilled talent – including accountants and technology specialists – is fierce.

Everyone will be impacted by the plan.

Page 132 of the plan defines stakeholders. It says: “Within this Plan, taxpayers are referred to broadly and include all people and groups whom we serve, including: • Individuals and families • Businesses large and small • Charities and other tax-exempt organizations • International taxpayers • Federal, state, and local governments • Tribal nations • Tax professionals and others who assist and serve taxpayers.” Translation: While there will be a lot of focus on high earning, wealthy individuals and institutions, everyone is going to feel the impact somehow. Exactly how remains to be seen.

One other thought:

While some are still calling for the IRS to reallocate the budget so there’s equal emphasis on service, technology and enforcement, the fact is the IRS does not have the discretion to change how funds are allocated. Still, with groups like the American Institute of Certified Public Accountants calling for a more equitable allocation of funds, you never know…

This story will be continued in the days, months and years ahead. We will be sure to keep you updated and share our thoughts as things unfold. If in the meantime, you have any questions or need accounting, tax, auditing, or advisory services, RBT CPAs is here for you. Just give us a call. NOTE: This alert shares RBT CPAs’ initial interpretations. It should not be construed as legal or financial advice or direction.

At RBT CPAs, we’re always ready to take on everything tax- and accounting-related for your organization, so you’re free to focus on driving your business success. Unfortunately, New York’s rules for its Pass-Through Entity Tax (PTET) require you – the business owner – to complete certain tasks. While we can’t automatically do them for you, we are here to guide you – and help where we can – so you have peace of mind that you’ve taken the right steps by designated deadlines to maximize the PTET for your business.

YOUR PTET TO DO LIST

If your business opted in for the 2022 PTET:

• Are you prepared to pay any balance owed for 2022 as part of your NYS tax filing by the March 15 deadline? RBT CPAs can help you file and pay in conjunction with your regular partnership or S corporation tax filing.
• Do you want an extension of time to file? A six-month extension to September 15^th can be requested; you must still pay the estimated PTET by March 15.
• Do you want RBT CPAs’ assistance to file your return, file for an extension, or make a PTET payment? We are glad to help! You’ll need to complete Form TR 2000 giving us the authorization to log into your NYS tax account, file your return or extension request, and pay using the tax information you provide regarding how much is owed.

Consider whether your business should opt in for the 2023 PTET:

• This is a tough one. You will only have financial information for the first few months of the year, so you’ll have to speculate about much of the year’s profits.
• Take a look at your organization’s cash flow and the potential impact of quarterly payments. You’ll have to make quarterly payments starting in March (and then June, September, and December).
• Are you considering selling your business or property owned in your partnership or S corporation in 2023? These sales can create significant tax events; a PTET election would help to minimize that tax burden.
• If you’re unsure whether the benefit outweighs the administrative cost, RBT CPAs can partner with you to provide a PTET cost/benefit analysis for NY and other states.
• Before making your 2023 election, have a conversation with your RBT CPAs team member.

If your business decides to opt in for the 2023 PTET:

• Have you completed your election to opt in? You cannot wait until you file your taxes for 2023. Opting in is an additional step you must complete before or on March 15. You, the business owner, must make this election online via your NYS tax account – you cannot delegate this activity to a third party like a tax preparer. Please see here for our step-by-step guide to making your 2023 NY PTET election.
• If your business is making the PTET election for 2023, have you engaged RBT CPAs to provide estimated quarterly tax payments (due in March, June, September, and December)?
• If you completed your 2023 PTET election, has your business made its first quarterly estimated tax payment by March 15, 2023?
• RBT CPAs can assist with certain aspects of this if you provide us with a completed Form TR 2000 (see “If your business opted in for the 2022 PTET” above for details).

If you have any questions or need additional information or assistance, please remember RBT CPAs is here to help. Let us know what you need so you can be 100% confident you’re making the right decisions and taking the right actions for your firm in relation to the NYS PTET.

If you were worried about your business being inundated with 1099-K Forms this upcoming tax filing season, take note!

On December 23, the IRS announced third-party settlement organizations (TPSOs) “will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower $600 threshold amount enacted as part of the American Rescue Plan of 2021.”

Instead, the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect for 2022. This will give taxpayers and tax professionals additional time to understand the new reporting requirements and help ensure a smooth transition. The new threshold of $600 – regardless of the number of transactions – will apply to business transactions that occur January 1, 2023 or later.

So, if you accepted a business-related payment from a TPSO like eBay, PayPal, Venmo or Etsy in 2022, you will not receive a 1099-K from that TPSO for this upcoming tax season, unless aggregate payments were $20,000 or more from over 200 transactions. For 2023, you will receive a 1099-K from a TPSO totaling $600 or more; then, you will need to include it as part of your tax filings.

More information, with additional details – like what you should do if you already received a 1099-K based on the lower $600 threshold – should be forthcoming from the IRS soon. We will share that information as it becomes available. In the meantime, if you have any questions, please refer to the Q&As that follow or give RBT CPAs a call.

Q&As

What Is a 1099-K Form?  The form, technically known as Form 1099-K Payment Card and Third-Party Network Transactions, is used to report payments your business receives from third-party settlement organizations (TPSOs) – like eBay, PayPal, Venmo, or Etsy – if those payments exceed certain thresholds. Any 1099-K you receive becomes part of your annual tax filings and considered taxable income.

What Changed? As part of the American Rescue Plan Act, the threshold for issuing 1099-Ks changed. Before 2022, a 1099-K was issued if over 200 transactions totaled more than $20,000. Starting in 2022, that threshold was reduced to $600, regardless of the total number of transactions. However, the IRS’ recent decision to delay the adoption of the $600 threshold until 2023 will give payees, accounting firms, and the IRS another year to prepare.

Who Is Impacted? In 2023, companies like PayPal, Venmo, Square, and Stripe will be sending you a 1099-K if you receive more than $600 in annual payments for goods or services rendered. As a result, if you sell small amounts of merchandise on selling platforms like eBay or Etsy, for example, you may find yourself responsible for increased taxes. Small or midsized business owners who receive most of their customer payments from credit cards, cash, or checks will most likely be unaffected.

What About Personal Transactions? The reporting requirements are limited to goods and services, so it won’t affect funds you receive for splitting that vacation rental or dinner with family or friends. Just be sure to keep accurate records when you are paying for personal items, so it isn’t incorrectly reported to the IRS.

What’s RBT’s Advice to You?

Start planning now: If you receive payments for goods or services through third-party networks, you may end up receiving a tax form for the first time for 2023. This is going to be an administrative burden and likely complicate your tax situation. It is best to be prepared and plan for any potential tax consequences by adopting strategies to minimize your tax bill early in the year.

Keep detailed records of income/expenses related to sales activity: If you sell goods or services and get paid through a third-party network, you may be eligible to deduct expenses related to that activity. Learn more by speaking with an RBT CPA professional.

It’s always good practice to consult your tax advisor to determine how best to use the information on your Form 1099-K when filing your income tax return. As always, our team of professionals at RBT CPA’s is happy to help you navigate this and other IRS updates. Give us a call.

On Sunday, August 7, after nearly 16 hours of deliberation that started on the Saturday night prior, the Senate passed a new bill known as the Inflation Reduction Act. This past Friday, the House voted and passed the bill sending it to President Biden’s desk for signature. Now after months of negotiations surrounding the agreement, it’s official – President Biden signed the bill into law yesterday afternoon. During the signing ceremony at the White House, President Biden referred to this legislation as “one of the most significant laws in our history.”

The bill has extensive provisions related to climate, health care, and taxes. While we navigate the 700 plus  pages of legislation included in this newly enacted bill, here are some highlights of the key provisions:

• Corporate Alternative Minimum Tax – This provision creates a minimum tax of 15% for corporations (not including S corporations) and is generally applicable to those corporations with average financial statement income exceeding $1 billion.
• Excise Tax on Repurchase of Corporate Stock – A tax of 1% will be assessed on the fair market value of any stock repurchased by a corporation whose stock is traded on an established securities market.
• Funding the Internal Revenue Service and Improving Taxpayer Compliance – Nearly $80 billion would be allocated to the IRS over the next 10 years to fund taxpayer services, enforcement, operations support, systems modernization, etc. This section of the bill is not intended to increase taxes on taxpayers or businesses with below $400,000 in taxable income.
• Prescription Drug Pricing Reform – Allows Medicare to negotiate lower drug prices and imposes an excise tax on prescription drug manufacturers, producers, and importers that don’t enter into drug pricing agreements with the government on selected drugs.
• Affordable Care Act Subsidies – Extends the health insurance related Premium Tax Credit, that was previously made under the American Rescue Plan Act of 2021, through 2025.
• Energy Security and Clean Incentives – Provides various tax credits for individuals and businesses for the use of green energy and purchasing new and used clean-energy vehicles. Many existing renewable energy credits are extended or expanded.
• Reinstatement of Superfund Excise Taxes – Previously expired in 1995, the bill reinstates the Hazardous Substance Superfund imposing an excise tax on crude oil received at a US refinery and petroleum products entering the US for consumption, use, or warehousing, at a rate of 16.4 cents per barrel.
• Increase in Research Credit Against Payroll Tax for Small Businesses – Increases the maximum research credit that may be applied against payroll taxes for qualified small businesses from $250,000 to $500,000.
• Extension of Limitation on Excess Business Losses – Extends by two years the limitation on amount of business losses that can be deducted in a taxable year by noncorporate taxpayers.

While many tax provisions originally being discussed did not make it into this final bill, this still represents significant changes affecting taxpayers. Over the coming days and weeks, we will provide more information about the tax implications of this new law. As always, we’re committed to sharing information as it becomes available and supporting your tax, accounting and audit needs going forward. If you have any questions, please give us a call, and watch for additional information in the weeks ahead.

Starting this month, don’t be surprised if you receive a bill for an Interest Assessment Surcharge (IAS) from the government. It’s for interest New York State owes the federal government on loans it took out to maintain unemployment and pandemic benefits between March 2020 and September 2021 for COVID-related programs.

New York’s Unemployment Insurance Trust Fund loan amounted to $9.2 billion. The Department of Labor (DOL) has already paid back 11% or more than $1 billion and is working with state leaders to aggressively reduce the principal balance. State law requires employers who make unemployment insurance contributions to pay the IAS on the federal loan annually, until all interest has been paid off.

Notifications about the surcharge started going out to employers, with information about the IAS rate (.23%), the annual charge for 2022 (about $27.60 per employee), and how to pay. Payment must be made within 30 days of date of the notice (and by September 30, 2022 at the latest).

If you have an account on NYS Online, you can find your payment amount on NYS-45, line 6: “UI Previously underpaid with interest.” If payment is not made when e-filing your 2^nd quarter 2022 NYS-45, make a check payable to NYS Unemployment Insurance. We recommend noting your NYS Unemployment Insurance Employer Number and “IAS” on the memo line. Then mail it to:

NYS Unemployment Insurance
P.O. Box 4301
Binghamton, NY 13902-4301

For more details and information, visit the New York State DOL website’s IAS page. If you have questions, call the NYS DOL’s Employer Hotline at 1-888-899-8810 (select One for Main Menu, and then One for Employer Accounts Adjustment Section of the Unemployment Insurance Division).

As always, you can reach out to your person at RBT CPAs, LLP/Sickler, Torchia, Allen & Churchill CPAs, P.C. if you need any additional assistance with this or other accounting, tax, and auditing matters.

Good news! New York State is giving residents who are homeowners a little respite from all of the talk about inflation, stock market drops, interest rates, and recessions. Homeowner tax rebate checks are in the mail and should arrive in mailboxes across the state this month!

Residents who earn less than $250,000 and are eligible for the STAR (school property tax rebate program) will receive a check. The value will be based on income, where the house is located, and the type of STAR rebate you are eligible for – basic or enhanced. Almost 3 million New York residents will receive checks.

You don’t have to do anything – the state is determining eligibility and payment amounts. If eligible, you’ll automatically receive payment this month (early July, at the latest).

For complete details, visit the New York State Department of Taxation and Finance website. There are answers to frequently asked questions and a “Check Lookup” tool to help you determine how much you may receive.

As always, if you have any questions about tax implications, RBT CPAs is here to help. Give us a call today.

Important Deadline Approaching

The PTET election period is open. To opt in, submit the Annual Election Application before or on March 15. For instructions on how to make the election, visit the NYS Department of Taxation and Finance website and click “Election.”

While RBT CPAs is always ready to do whatever it takes to support clients, by law we can’t make your PTET election. However, we can file your return and pay any tax owed if you complete and submit a TR-2000.

For more information or assistance, contact your local RBT CPAs, LLP office.

What is a pass-through entity (PTE)?

When a company’s income taxes are paid solely by its owners (rather than the business), it’s considered to be a PTE. The business doesn’t pay corporate taxes; instead, its owners pay taxes on their share of business income based on their personal tax rates. As a result, business owners avoid having to pay taxes twice – once at the corporate level and a second time on the income they receive as owners.

Are all businesses considered pass-through entities (PTEs)?

No. PTEs are distinguished by which tax form they file. To be considered a PTE, an entity must file a 1065 partnership or a 1120-S S corporation return. A sole proprietorship or LLC owned by a single member and reported via Form 1040, Schedule C, or Schedule E does not qualify as a PTE.

What is a pass-through entity tax (PTET)?

In 2017, the Tax Cuts and Jobs Act (TCJA) limited the deduction business owners could take for state and local taxes on income and property to $10,000. This impacted high tax states the hardest. States realized the same limit didn’t apply to businesses at a corporate level, and the pass-through entity tax (PTET) was born.

What is the NY State PTET election?

The PTET is not automatic; businesses must opt in to take the PTET each year. The opt in election must be made by no later than March 15. If a business does not want the PTET, no action is required.

What is the benefit of opting in to take the NY state PTET?

Businesses that opt in will receive a Federal tax deduction based on the PTET paid, while their owners may be eligible for a PTET credit on their NY state income tax returns.

Is there any potential downside to opting in?

PTEs and their owners should carefully consider whether a PTET election makes sense for them. Review the potential benefit prior to making an election to avoid any unwanted tax consequences for the PTE or its owners.

Who can make the PTET election?

Only an authorized person from an eligible entity – not a tax preparer – can make the election to opt in. For a partnership, an authorized person includes “any member, partner, owner or other individual with authority to bind the entity or sign returns under Tax Law 653.” For a New York S Corporation, an authorized person includes “any officer, manager or shareholder of the New York S corporation who is authorized under the law of the state where the corporation is incorporated or under the S corporation’s organizational documents to make the election.”

How do I make a PTET election?

You must login to your New York State tax account to make the election. (For instructions and more details, visit the New York State Department of Taxation and Finance webpage.)

How does my business pay its PTET?

Businesses will need to go onto their online NYS tax filing account and initiate payment directly to the state. A tax preparer or software cannot do this unless a business owner completes a TR-2000, which provides authorization to log into the account, file a return, and pay any tax owed. RBT CPAs encourages its clients to complete and submit this form and then we’ll handle the rest when it comes to your PTET filing.

My business is in NYC. Does the NYC PTET work the same way for me and my partners?

In order to receive a NYC PTET credit, an S Corporation must have all NYC resident individual owners or a partnership must have at least one NYC resident individual owner. So even if you’re doing business or operating out of NYC, you may not necessarily benefit from NYC PTET.

If you have any questions or need additional information or assistance, please remember RBT CPAs is here to help. Let us know what you need so you can be 100% confident you’re making the right decisions and taking the right actions in relation to the NYS PTET.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

The U.S. Department of Treasury has extended the reporting deadline for the Project & Expenditures Report for all recipients of the Coronavirus State and Local Fiscal Recovery Fund (SLFRF). According to NYGFOA and several other local government legislative advocacy groups across the country, the U.S. Department of Treasury sent an email out on Thursday, September 30, 2021 notifying states of the deadline change. Here is a link to the official addendum. According to the email correspondence, the deadline extension comes as a result of the feedback and comments gathered from recipients during that process. Please note:

• States, Metropolitan Cities, Counties, Territories, and Tribal Governments will now report on January 31, 2022, instead of October 31, 2021 and will cover the period between award date and December 31, 2021.

• The first reporting deadline for Non-Entitlement Units (NEUs) will be April 30, 2022, instead of October 31, 2021 and will cover the period between award date and March 31, 2022.

States have been sent a draft letter regarding the change by the Treasury which can be used to notify their NEUs. As an NEU you should continue working with your state or territory to take action on your allocated distribution and provide the necessary contact information to set up your account in Treasury’s Portal. In the event you decide to decline and request the transfer of funds, you will need to submit the Treasury form provided by your state or territory. Further instructions will be provided at a later date, including updates to existing guidance as well as a user guide to assist recipients to gather and submit the information through Treasury’s Portal. Please visit Treasury’s website at www.Treasury.gov/SLFRPReporting for the latest information. As always, if you have specific questions and would like to consult with one of our specialized RBT Government team members, contact us today.

Sources: U.S. Department of Treasury, NYGFOA

New York State individual owners of partnerships and S corporations have an opportunity to benefit from valuable tax deductions.

The NYS Pass-Through Entity Tax (PTET) is effective for tax years beginning on or after January 1, 2021. Given the high real property taxes and high personal income tax rates in New York State, many individual taxpayers have felt the effects of the state and local tax deduction limitation that was part of the Tax Cuts and Jobs Act (TCJA) of 2017. NY’s PTET was put into place to hopefully provide some NY business owners with a new opportunity for federal tax savings around this current limitation.

The PTET works by shifting the burden of state income tax payments related to income passed through from partnerships and/or S corporations.

Rather than the individual shareholders/partners being responsible for paying the tax, the pass-through entities (PTEs) will pay the tax. Partnerships and S corporations that pay the PTET are allowed a tax deduction against their ordinary business income without regard to the $10,000 SALT limitation. And if you haven’t been itemizing your deductions on your personal tax return because the standard deduction has been greater than your otherwise deductible expenses, the PTET provides for additional deductions that weren’t available to you previously.

Each year, NY partnerships and/or S corporations must make an annual election to participate in this program. The election is made online with the New York Department of Taxation and Finance through a business’ online services account. Once made, the entity is responsible for filing and paying all required tax returns and payments for that year. The election may be revoked up until March 15 of the year it is made; then, it is irrevocable.

Elections cannot be made by tax professionals, only by authorized individuals (partner, shareholder, etc.) of the business. The election must be made by March 15th.

The calculations differ slightly based on entity type and residency status. S Corporations with all NY resident shareholders will pay the PTET on 100% of the entity’s NY taxable income while S Corporations with any nonresident shareholders will pay the PTET based only on the entity’s NY sourced taxable income. Partnerships will pay the PTET based on all allocable taxable income for residents and only NY sourced taxable income for non-residents. The tax rate ranges from 6.85%, for PTE taxable income up to $2 million, up to the highest NYS marginal tax rate of 10.90%.

The annual return will report the PTE taxable income, total tax liability, and the direct share of PTET that is available to each owner as a tax credit. This PTET credit, equal to 100% of the tax paid, will be claimed by the owner on their personal New York tax return. Certain trust owners may also be eligible to claim the PTET credit. Corporation and partnership owners are not eligible for PTET credits and therefore, PTET won’t be paid on their shares of the income.

Resident owners of a PTE may claim a resident tax credit on Form IT-112-R for the payment of another state’s PTET by their partnership or S corporation.

The PTET has brought challenges and complexities with it. The silver lining is an opportunity for significant Federal tax savings for NY business owners. Please contact our team of dedicated professionals if you’d like to discuss if and how this program can benefit you and your business.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.