The change would be retroactively effective and is consistent with guidance issued by New York State previously. That provision has caused taxpayer and tax professional confusion in arriving at a proper calculation of the tax. First, the bill corrects a calculation error that results from existing language, which requires the PTET itself to be deducted in calculating the taxable income of the pass-through entity. The budget bill makes several necessary changes to the existing state and city PTET regime. Pass-through entity tax regime technical corrections and revisions The fiscal year 2023-2024 budget extends both the corporate rate increase and the capital base tax rate until 2027. 1875% for the same duration as the temporary corporate rate increase. The prior budget bill also froze the capital base tax rate at. That increase was scheduled effective for tax years beginning or after Jan. Recall that as part of the state fiscal year 2021-2022 budget, New York increased the state corporate income tax rate to 7.25% for taxpayers with business income over $5 million. New York enacts 2023-2024 budget with tax changes Corporate tax rate extension Included in the changes is an extension of the temporary corporate income tax rate, corrections to the states pass-through entity tax (PTET) and a change to administrative appeals granting the New York Department of Tax and Finance a right to appeal from administrative decisions, among other changes. Kathy Hochul signed fiscal year 2023-2024 budget legislation, S04009C/A03009-C, providing for a number of state and local tax changes. Executive summary: New York enacts state fiscal year 2023-2024 budget
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