The New York State budget bill is on the governor's desk.
Our state and local tax group provides the most important
Highlights for you and your company.
- Higher tax rates for the rich, lower tax rates for the rich
- Businesses will see higher tax rates and reinvested capital
- Elective pass-through corporate income tax waived
- Several tax credits have been created, renewed, or expanded
Constitutional on April 7th, just a few days after April 1st
Imposed deadline for the adoption of the state budget, the budget account
(S.2509-C / A.3009-C) was handed over to Governor Andrew Cuomo for his
Signature. From a tax point of view, the invoice offers a mixed bag:
Tax increases for some and tax cuts for others. The bill too
expands existing tax credits and creates tax credits with the aim of
Helping companies hardest hit by COVID-19
Personal Income Tax (PIT) rates, which are currently the highest
8.82%, increases to 9.65% for individual filers with income
over $ 1,077,550 and joint applicants income over $ 2,155,350. Two
New tax brackets are set: 10.3% for taxpayers with
Income over $ 5 million and 10.9% for taxpayers income over $ 25
Million. The increase in the PIT rate for wealthy individuals is expected
Raise $ 2.75 billion in fiscal 2022 and $ 3.3 billion in fiscal year 203
FY 2023. The governor had tried to impose surcharges that were limited to
From 2021 to 2023, but as enacted, the rate increases will apply
Middle class PIT rate cuts that the governor had
tried to delay for a year, will go into effect as planned. The
The phase-in-phase of the rate cut started in 2018 and is currently planned for
be fully implemented by 2025.
The invoice provides a PIT credit for income taxpayers
less than $ 250,000 and who pay property tax greater than 6%
Income; The credit is capped at $ 350 per year and lasts for years
Starts on or after January 1, 2021.
The invoice authorizes the tax department to waive interest
Underpayment of taxes due to insufficient withholding tax
Unemployment benefit for 2020.
Business franchise rates will increase from 6.5% to 7.25%
Companies with a business income base greater than $ 5
For years beginning and ending on or after January 1, 2021
before December 31, 2023, the capital base at a will be restored
0.1875% for businesses that are not classified as small
Corporations (net income less than $ 390,000 and less than $ 100
Employees); skilled manufacturers, skilled emerging technology
Companies and cooperative housing associations continue to be
exempted from the capital base.
These corporate tax changes are expected to net $ 750
Million in fiscal 2022 and $ 1 billion in fiscal 2023.
New election pass-through corporate tax
A new PTE (Elective Pass-Through Entity) tax has been issued for
Years beginning on or after January 1, 2021 with a tax rate of 6.85%
for taxable income up to $ 2 million with tax rates increasing to 9.65%
for companies with taxable income between $ 2 million and $ 5 million
10.3% for companies with incomes between $ 5 million and $ 25 million,
and 10.9% for companies with income greater than $ 25 million. Partner,
Members and shareholders of the election of PTEs would be eligible
a tax credit on their pro-rata or pro-rata portion of
taxes paid by the company. The election PTE tax acts as a
Workaround for the SALT cap imposed by the 2017 tax cuts and jobs
The legislature rejected the governor's proposal
have introduced the PTE tax for years from 2022 and would
have a credit of 92% of the partner, member or
Share of shareholders in the company's PTE tax.
value added tax
The invoice contains a technical correction of the sales volume
Threshold for the requirement to register remote service providers in tax law
Section 1134 (a) (1) (i) to reflect that is the correct threshold
The invoice extends the excelsior investment tax credit for
Participants in the Great Jobs program to include expenses
for childcare services by providing an additional credit of 5% and
creates a new tax credit of 6% excelsior for childcare services for new ones
Expenses for childcare services for the company, sponsorship or
direct financial support for childcare
The Empire State Film Production Credit and Empire State Film
The post production credit has been extended for an additional year
2026, and the tax credit can be used additionally by the recipients
The musical and theatrical production credit was extended
Regions outside of New York City for an additional four years
Jan. 1, 2026. The bill also increased the annual tax credit cap
from $ 4 million to $ 8 million.
A new restaurant return to work tax credit program offers one
Credit for $ 5,000 per full-time equivalent net employee
Increase total credit per business unit by up to $ 50,000. The
Bill provides for the expense of up to $ 35 million in this tax
Credits until 2021.
A tax credit for New York music and theater productions
was issued. The tax credit is 25% of qualified production
Spending cannot exceed $ 3 million and is available
qualifying music and theater productions, their first
The benefit is paid in the first year in which the tax credit is issued
Applications are accepted. The maximum amount will be lowered to $ 1.5
Millions for productions that premiered during the
second year in which tax credit requests are made
accepted. The tax credit is available for 2021 through 2023.
The bill fully increases the penalties for non-compliance
and accurate payroll and source reports from $ 50 per person
Employees to $ 100 per employee and increases the maximum fine
This can be imposed on employers from $ 10,000 to $ 20,000. The
Penalty increases are expected to increase revenue by $ 2 million
annually and apply to NYS-45 forms filed on or after June
1, 2021. The governor's proposal should increase the maximum
Penalty per employer of $ 50,000.
The bill authorized mobile sports betting. It requires the
State exhibition applications for applications for award this year
Licenses to operate the betting platform. Legalization of sport
Betting is expected to increase sales by $ 500 million annually
As soon as the infrastructure is in place.
Because the middle class rate cut was part of a planned one
Phase-in before the COVID-19 pandemic put into effect the rate reduction
should not violate the mandate in the American Rescue Plan Act
by 2021, which forbids every state to accept federal finance
Assistance if direct or indirect the tax burden for his
Citizens for the next four years. We'll have to wait to learn how
The American rescue plan affects the continuation of the bill
Lowering the middle class. Treasury Secretary Janet Yellen
recently announced that further guidance on the scope of the
The American rescue plan is issued.
While the bill contained an extensive list of tax items, some were made up of
The governor's fiscal budget proposals were not passed.
In particular, the governor's proposal to demand "leave"
Rental market providers "like Airbnb and VRBO
Collection and transfer of sales tax on vacation rentals that they allow was
eliminated. In addition, the proposal is to extend the interest-free
Period of three months to six months for the tax department up to
Litigation revenue refunds over $ 100,000 have been eliminated. In the end,
the proposal that would give the tax department the right to appeal
negative decisions of the State Tax Tribunal were removed from the final
While the bill increases taxes on certain wealthier taxpayers,
It also offers benefits in the form of lower taxes and taxes
Lending to taxpayers and low- and middle-income businesses hit the
hardest during the pandemic. Only time will tell whether it will increase
in tax revenue from the resurgence of the capital tax and
increases to both the corporate tax rate and the individual tax rate
Wealthy individuals will make up for a possible exodus from the rich
Individuals and businesses to more tax-friendly climates.
The content of this article is intended to provide a general overview
Guide to the subject. Expert advice should be sought
about your particular circumstances.