Overview
All S corporations that are doing business, employing capital, owning or leasing property, or maintaining an office in New York City (“NYC”) are subject to NYC’s General Corporation Tax (“GCT”).
The GCT rate is computed by four different methods and is imposed on whichever computation produces the largest amount of tax due. The four methods are as follows:
8.85% of net income allocated to NYC;
0.15% of business and investment capital allocated to NYC (not to exceed $1m for tax years 2009 or after);
8.85% of 15% of net income plus the amount of salaries or other compensation paid to any person, including an officer, who owned more than 5% of the S corporation; or
A minimum tax based on the S corporation’s NYC gross receipts which is determined as follows:
$100,000 or less = $25 minimum tax
More than $100,000 but not more than $250,000 = $75
More than $250,000 but not more than $500,000 = $175
More than $500,000 but not more than $1,000,000 = $500
More than $1,000,000 but not more than $5,000,000 = $1,500
More than $5,000,000 but not more than $25,000,000 = $3,500
More than $25,000,000 = $5,000
However, there are cases where an S corporation is exempt from the GCT:
S corporations which did not engage in any business activity or own real property located in NYC;
S corporations subject to tax under the banking corporation tax;
S corporations subject to utility tax (does not include vendors of utility services subject to GCT);
S corporations organized to hold property under IRC 501(c)(2) or (25);
Insurance corporations;
Non-stock non-for-profit companies granted an exemption by NYC; and
Limited-profit housing and housing development fund companies organized and operating under the Private Housing Finance Law articles 1 and 11.
Member Responsibility
Members must identify whether they are required to file a NYC GCT tax return and if required, file such tax return. We suggest seeking third party advice for the preparation and filing of any required NYC tax returns.
Annual NYC GCT returns are due by March 15 and filing can be extended by 6 months by filing Form NYC-EXT by the filing deadline. Nonetheless, this is not an extension to pay and tax due will be due March 15. If you expect to owe more than $1,000 in tax, you must file and pay quarterly estimated tax payments with Form NYC-400 (see page two for estimated payment due dates):
What Collective Will Do
While we cannot provide advice, projections, or prepare/file NYC GCT tax returns, extensions, or estimated taxes, we will provide members with the necessary books to file such a return, as well as the member's S corporation New York state tax return.
Once paid, we will categorize this transaction in your books as "Taxes and Licenses." You can easily upload the tax return to your member dashboard using the "Upload Documents" feature found under the "Documents" tab.
Disclaimer: The information contained in this document is provided for informational purposes only and should not be construed as financial or tax advice. It is not intended to be a substitute for obtaining accounting or other financial advice from an appropriate financial adviser or for the purpose of avoiding U.S. Federal, state or local tax payments and penalties.