PTET Estimated Tax Reminder

Estimated taxes for the New York pass-through entity tax (PTET) are next due on Monday, June 17, 2024.

New York online services accounts (https://www.tax.ny.gov/online/) allow taxpayers to schedule all quarterly estimated tax payments for the current tax year in advance. Practitioners should recommend or assist clients with scheduling the payments in advance, so that it is not a task that will need to be repeated during the rest of the year.

Generally, scheduling the payments so that each one is at least a quarter of 100% of the prior-year PTET liability is the preferred approach. However, to be eligible to meet this prior-year safe harbor, the taxpayer must have elected to be subject to the PTET in the previous tax year. Also, if a client’s income is expected to be significantly less than in the prior tax year, using the safe harbor may not be practical or desirable.

For taxpayers who are not eligible to meet the prior-year safe harbor or where doing so would be impractical, estimated taxes should be at least a quarter of 90% of the PTET liability that results for the current tax year. Of course, this amount is not known until the PTET liability is computed on the current-year PTET return.