We’re back with another update on recently-introduced tax legislation. As discussed last week, we continue to see bills reintroduced that expired at the end of the last session. Two of the more interesting proposals include repealing New York’s estate tax and another so-called “millionaire’s tax.” We’ve also been following the proposed tax changes in the Governor’s Budget proposal that came out earlier this week (see here, here, and here), and next week we’ll dedicate our update to an overall summary of the Budget proposals.
On January 19, 2021, New York Governor Andrew Cuomo published his Fiscal Year 2022 Executive Budget and related legislation (the “Budget Proposal”). While the Budget Proposal contains a variety of important provisions, this post will cover one of the most notable: the proposed pass-through entity (“PTE”) workaround to the $10,000 limitation on Federal state and local tax deductions (the “SALT cap”).
The day many expected has finally come: Governor Cuomo has officially proposed his 2021 Budget and, as expected, it includes higher personal income tax rates for high-income taxpayers.
In the blog I posted below, more than a year ago, we tried to answer what has been a pressing question about how far New York’s resident credit rules go, and specifically whether NY resident who pays the Connecticut pass-through entity tax (or really any other state’s PTE tax) could claim a resident tax credit in New York for such taxes. Sixteen months later, there still is no direct answer to this question, though I continue to believe there’s some authority under existing law to claim such a credit. But earlier this week, as part of the Governor’s 2021 Budget Proposal and buried in provisions around a new PTS tax for New York (which we will cover in a separate blog post, don’t worry), there’s this amendment to Tax Law § 620:
We’re back with another update on recently-introduced tax legislation. As discussed last week, we continue to see bills reintroduced that expired at the end of the last session. Two of the more interesting proposals include a bill addressing the taxability of carried interest for investment management services and another proposing a new personal income surcharge on high-income residents of New York City.
With the start of New York’s new Legislative Session for the 2021-22 term, we are eagerly anticipating the introduction of new tax legislation and we plan to cover those developments here. We’ll be tracking all noteworthy legislative developments on a weekly or bi-weekly basis, and this is our first installment of 2021.
As expected, we are already seeing bills reintroduced that expired at the end of the last session. Given the uptick in working remotely due to COVID-19, one of the more interesting proposals addresses the tax treatment of telecommuting employees. While some of these efforts may fail, New York is experiencing multibillion-dollar revenue shortfalls and will be increasingly looking to businesses and high earners to ease the revenue shortfalls being faced due to the COVID-19 pandemic.