First, the due date for 2021 PTET returns is Tuesday, March 15—that’s less than a week away. It’s important to get your PTET returns in on time, along with payment of any remaining taxes for 2021 that were not paid already.
While it’s customary for entities to request an extension to file tax returns, it’s possible that many entities will want to file on time, since New York State is essentially holding double the amount of tax for 2021 (if we assume pass-through entity owners already properly paid for 2021 in estimated taxes ). If that’s the case, these partners/shareholders are going to want K-1s as soon as possible so they can file their own personal tax returns on time and get their money out of New York’s pocket and back in their own. Count Hodgson Russ partners among this group!
The other date to be careful about is the 2022 election date. New York’s PTET requires taxpayers to elect in annually—the election to participate in the PTET for 2021 does NOT extend into 2022. More importantly, unlike the October due date for the 2021 election, taxpayers must elect into the PTET next week, by March 15, 2022, in order to qualify for the tax in 2022. Furthermore, estimated payments must also be made starting next week for the 2022 tax year.
But that’s not all! Also keep in mind that for qualifying entities in 2022, partners and shareholders do not need to continue to make individual estimated tax payments for their share of income flowing from the pass-through entity. This, of course, is a change from 2021, when the tax department essentially required double payments of estimated taxes by both the entity and the individual owners.
Learn more about the Pass-Through Entity Tax in our article in Tax Notes State with our review of the rules. You can also reference the Tax Department’s Technical Services Bureau memo on the tax, and as always, stay tuned to Noonan’s Notes for more updates.
