More Time for NY PTET Election

A newly-enacted law in New York State extends the time for entities that wish to elect to be subject to the New York pass-through entity tax (PTET) for the 2022 tax year.  (See New York State Senate Bill 8948, enacted on May 6, 2022.)  The normal due date for the 2022 election was March 15, 2022.  Entities that missed that due date will be permitted to make the election on or before September 15, 2022 for the 2022 tax year.

In the near future, New York State is expected to issue more guidance regarding logistics for this late election.  In the meantime, practitioners should consider whether clients who missed the original due date for the election could benefit from making the late election for the 2022 tax year.

Entities that make the late election under this new provision will be required to make catchup estimated tax payments for the 2022 tax year.  If the election is made after June 15, 2022 and before September 15, 2022, the entity is required to make an estimated tax payment with its election that represents 50% of the required annual estimated tax payment.  (The entity must then make the remaining two required estimated tax payments on September 15, 2022 and December 15, 2022.)

If an entity makes the election on September 15, 2022, the entity will be required to make an estimated tax payment of 75% of the required annual payment on September 15, 2022.  (The entity must then make the remaining required estimated tax payment on December 15, 2022.)

Our tax news has numerous other posts related to the pass-through entity tax.  Search our tax news archive for PTET to see these earlier posts.