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New York Tax Guide
Triple tax state

New York —
three layers of income tax for NYC founders.

Federal + New York State + New York City income tax. Combined top marginal rate for NYC residents can exceed 52%. Understanding all three layers — and the PTET election that can offset them — is essential.

10.9%NY state top rate
3.876%NYC city tax
$9LLC biennial fee
9.3%PTET rate
Other state guides
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NYC founders face three layers of income tax. Federal income tax + New York State income tax (up to 10.9%) + New York City income tax (up to 3.876%). This is unique in the US — most cities don't have their own income tax. If you're outside NYC, you only pay the state layer.
10.9%
NY state top rate
On income over $25M. Standard top rate for most founders: 6.85%–10.3%
3.876%
NYC city tax
Additional city income tax for NYC residents only. Non-NYC NY residents don't pay this
4.0%
NY C-Corp rate
On NY net income. Minimum tax of just $25/yr — much lower than California's $800
0.34%
MCTMT rate
Metropolitan Commuter Transportation Mobility Tax on self-employed net earnings over $50k in Metro area
$9
LLC biennial fee
Every 2 years — missing it can result in LLC dissolution. Easy to forget
9.3%
PTET rate
Optional pass-through entity tax to bypass the $10k SALT cap
LLC biennial statement — easy to miss, expensive to forget. NY LLCs must file a biennial statement every 2 years with the NY Department of State. The fee is just $9 but missing it triggers automatic dissolution of your LLC. Set a calendar reminder from your formation date — every 2 years.
PTET election can save NYC founders thousands. By electing to pay NY's pass-through entity tax at the entity level, LLC and S-Corp owners can deduct their full state and city tax on their federal return — effectively bypassing the $10,000 SALT deduction cap. See the PTET tab for the full breakdown.

Key New York forms for small business founders

IT-201
NY Resident Income Tax ReturnFull-year NY residents. Includes all income — wages, business income from Schedule C or K-1, investment income. Required if NY income exceeds filing threshold.
Apr 15
IT-203
NY Nonresident / Part-Year ReturnFor founders who moved to/from NY during the year, or non-residents with NY-source income. NY taxes income earned in NY even if you live elsewhere.
Apr 15
IT-204
NY Partnership ReturnFiled by multi-member LLCs and partnerships. Reports income allocation to partners. Each member then includes their share on their personal IT-201.
Mar 15
CT-3
General Business Corporation Franchise TaxFiled by C-Corps doing business in NY. Reports 4% NY corporate franchise tax. Due 15th day of 4th month after fiscal year end.
Apr 15
IT-204-LL
LLC Filing Fee + PTET ElectionAnnual LLC filing fee ($25–$4,500 based on NY income). Also where you make the optional PTET election to pay entity-level tax and bypass the SALT cap.
Mar 15
NYC-202
NYC Unincorporated Business Tax4% tax on NYC-based unincorporated business income over $95,000. Applies to sole proprietors and single-member LLCs operating in NYC. Often missed completely.
Apr 15
NYS-45
Quarterly Combined Withholding ReturnFiled by all employers. Reports employee wages, NY state income tax withheld, and unemployment insurance contributions. Due last day of month following quarter.
Quarterly

New York filing calendar

Jan 31
W-2s to employees · 1099-NECs to contractors · NYS-45 Q4Busiest day of the year for NY employers — three deadlines simultaneously
Employer
Mar 15
IT-204 partnership · IT-204-LL LLC fee · S-Corp returns · PTET electionEntity returns one month before personal returns — K-1s must go to members first
Entity returns
Apr 15
IT-201 personal · CT-3 C-Corp · NYC-202 · Q1 estimated taxFour potential obligations on the same day — plan ahead
Critical
Apr 30
NYS-45 Q1 payroll returnNY employer returns are due last day of month following quarter — not the 15th like federal
Employer
Jun 16
Q2 federal + NY estimated taxPay both EFTPS (federal) and NY estimated tax simultaneously
Quarterly
Sep 15
Q3 federal + NY estimated taxUnlike California, NY DOES have a Q3 estimated payment
Quarterly
Biennial
LLC biennial statement ($9) — check your formation dateSet a recurring reminder every 2 years — missing this dissolves your LLC
Every 2 yrs
NY quarterly employer returns (NYS-45) are due the LAST DAY of the month following the quarter — not the 15th. Q1 is April 30, Q2 July 31, Q3 October 31, Q4 January 31. Different from federal Form 941 deadlines.

The PTET election — bypass the $10k SALT cap

The Pass-Through Entity Tax election is one of the most powerful tax strategies available to NY founders. Here's exactly how it works and whether you should do it.

The problem it solves: The 2017 Tax Cuts and Jobs Act capped the federal deduction for state and local taxes (SALT) at $10,000/year. For a NYC founder paying $40,000+ in state and city taxes, most of that deduction is lost. The PTET election restores it.
1
How it worksInstead of paying NY state and city taxes on your personal return (where the $10k SALT cap applies), your LLC or S-Corp pays the tax at the entity level at a flat 9.3% rate. Entity-level taxes have no federal cap — they're fully deductible as business expenses.
2
You get a NY tax credit on your personal returnTo prevent double taxation, NY gives you a credit on your personal IT-201 equal to the PTET paid by your entity. Net result: you pay the same state tax, but now it's also fully deductible federally.
3
How to make the electionElect on Form IT-204-LL by March 15. Must make quarterly estimated PTET payments — March 15, June 15, September 15, December 15. File the annual PTET return (Form IT-204-D) by March 15 of the following year.Election deadline: March 15
4
Who benefits mostNYC founders with significant pass-through income above $100k, where state + city taxes exceed $10,000. The higher your income and the more NY tax you pay, the greater the federal savings from making this election.
The PTET election is irrevocable once made for the tax year. Make sure you model the full impact with your CPA before electing — it requires additional quarterly payments and adds complexity to your filing.

Key tips for New York founders

The PTET election is the single most valuable NY tax strategy for profitable founders. At $150k in NY income, it can generate $8,000–$15,000 in additional federal deductions. Run the numbers with your CPA before March 15 every year.
If you're outside NYC, your tax burden drops dramatically. The 3.876% NYC tax applies only to city residents. A founder in Buffalo, Albany, or Long Island pays only the NY state rate — saving potentially $5,000–$15,000/yr compared to an equivalent NYC founder.
The NYC Unincorporated Business Tax catches most sole props by surprise. If your NYC-based unincorporated business income exceeds $95,000 you owe the 4% UBT. Many founders assume the city tax is only for employees and miss this entirely until an audit notice arrives.
NY taxes income sourced in NY even if you move. If you operate a business in NY, have clients in NY, or have employees in NY — NY wants its share even if you've relocated to Florida or Nevada. Don't assume leaving the state eliminates your NY tax obligations.
S-Corp election is particularly valuable in NY. Between federal SE tax savings and the ability to make the PTET election on distributions, a profitable NY S-Corp can save $10,000–$20,000/yr in combined federal and state taxes compared to operating as an LLC.