Client Alerts

September 15, 2022, Deadline For The New York State Pass-Through Entity Tax Election for 2022 AND New York City Pass-Through Entity Tax Can Now Apply to 2022

Client Alerts | September 1, 2022 | Hedge Funds | Private Equity Funds

2022 New York State Pass-Through Entity Election Deadline

The original deadline to make the New York State pass-through entity tax (“NYS PTET”) election for 2022 was March 15, 2022, but in May was extended to September 15, 2022. (Please click here for our May 2022 alert on the extension of the NYS PTET deadline.)

An NYS PTET election may be made annually on or before the applicable deadline. With the 2022 deadline approaching, taxpayers who would like to make, but have not yet made, a 2022 NYS PTET election with respect to one or more of their pass-through entities should do so as soon as possible. Since the election may only be made online, a taxpayer who waits until the last minute may encounter difficulties if the New York State website for making the election becomes overwhelmed. Taxpayers who do not have a pass-through entity structure in place should consider taking steps to form entities eligible to make the election as soon as possible since the process requires lead time.

If an election is made, estimated NYS PTET payments need to be paid at the time the election is made. If an election is made by September 15, 2022, 75% of the estimated NYS PTET for 2022 will need to be paid.

For 2023, the NYS PTET election deadline is March 15, 2023.

New York City Pass-Through Entity Tax (“NYC PTET”) 

On August 31, 2022, Governor Hochul signed legislation that retroactively applies the NYC PTET to years beginning on or after January 1, 2022. Initially, the NYC PTET was only available for years beginning on or after January 1, 2023. This significant development was pushed for in our May 2022 alert (please click here for our May 2022 alert and here for our April 2022 alert on the enactment of the NYC PTET).

The NYC PTET election for 2022 must be made by March 15, 2023. However, according to the NYS PTET website, an entity must also have made the 2022 NYS PTET election by September 15, 2022, to qualify to elect into the NYC PTET for 2022. There may be additional guidance issued on the election process.