New York Companies Have Less Than Two Weeks To Take Advantage Of SALT Deduction
As Connecting the Dots has reported, the New York legislature adopted a bill this past April that preserved the federal State and Local Tax (SALT) deduction for small businesses organized as pass-through entities.
The deadline to elect into New York’s entity-level tax workaround to the federal SALT cap is coming up, however.
Companies must act by October 15, 2021 to alleviate losses related to federal SALT cap, which limits the ability to deduct state and local taxes in excess of $10,000 for U.S. federal income tax purposes. New York’s provision allows individuals with income from pass-through entities to mitigate the loss of their SALT deduction by having these entities opt to pay a federally deductible Pass-Through Entity Tax (PTET), which is then creditable against their New York personal income tax liabilities.
New guidance regarding the PTET was released on August 25, 2021. Interested in learning more about this program and what your company must do by October 15, 2021? Click here.