New York PTET Calculator 2026 — IT-204-IP Partner Credit + NYC Layer
Calculate New York pass-through entity tax (PTET) at tiered rates (6.85%–10.90%), NYC PTET 3.876% layer, partner credit on IT-204-IP, and federal SALT cap bypass savings.
$
Entity's NY-source qualified taxable income %
Your share for IT-204-IP credit NYC PTET adds 3.876% layer for NYC-source income
Entity income:
$0
Federal Tax Savings
$0
NY PTET Paid
$0
NYC PTET Paid
$0
Your Owner Credit
PTET Calculation Summary
NY PTET Rate Breakdown by Tier
| Income Tier | Rate | Income in Tier | PTET |
|---|
How New York PTET Works
The NY PTET election allows the business entity to pay state tax on qualified owners' income, making it a federally deductible business expense. Each owner then claims an equal credit on their personal NY return. This sidesteps the federal $40,000 SALT deduction cap.
PTET Rate Tiers 2026
$0 – $2,000,000: 6.85%
$2,000,001 – $5,000,000: 9.65%
$5,000,001 – $25,000,000: 10.30%
Above $25,000,000: 10.90%
NYC PTET: additional 3.876% (if NYC presence)
Owner Credit = Entity PTET × Ownership %
Federal Savings = PTET Paid × Federal Marginal Rate
$2,000,001 – $5,000,000: 9.65%
$5,000,001 – $25,000,000: 10.30%
Above $25,000,000: 10.90%
NYC PTET: additional 3.876% (if NYC presence)
Owner Credit = Entity PTET × Ownership %
Federal Savings = PTET Paid × Federal Marginal Rate
Example: $1M entity, 100% owner, 35% federal
NY income: $1,000,000 | Ownership: 100%
PTET: $2,000,000 cap → $1M × 6.85% = $68,500
Federal deduction: $68,500 federally deductible
Federal savings: $68,500 × 35% = $23,975
NY owner credit: $68,500 (full offset)
Net benefit: $23,975 at zero NY cost
PTET: $2,000,000 cap → $1M × 6.85% = $68,500
Federal deduction: $68,500 federally deductible
Federal savings: $68,500 × 35% = $23,975
NY owner credit: $68,500 (full offset)
Net benefit: $23,975 at zero NY cost
Extended
NY vs NJ vs CT PTET Comparison + Entity Election Timing
Multi-state PTE comparison and deadline optimization
Estimated PTET tax and federal savings for equivalent income in NY, NJ, and CT.
| State | Rate / System | PTET on Your Income | Owner Credit % | Federal Savings | Net Benefit |
|---|
Key deadlines and election requirements for the NY PTET election.
| Event | Deadline / Rule | Notes |
|---|---|---|
| Annual election | March 15, 2026 | For 2026 tax year (calendar-year entities) |
| Minimum prepayment | $1 or 50% of prior year PTET | Required to lock in election; no payment = no election |
| Q1 estimated payment | March 15, 2026 | 25% of estimated annual PTET |
| Q2 estimated payment | June 15, 2026 | 25% |
| Q3 estimated payment | September 15, 2026 | 25% |
| Q4 estimated payment | December 15, 2026 | 25% |
| PTET return due | March 15, 2027 | Entity return; partners claim credit on IT-204-IP |
| Owner credit claim | April 15, 2027 | Personal IT-201 or IT-203 return |
Key warning: If the election is not made by March 15, 2026 AND a prepayment is not made, the entity cannot make the PTET election for the 2026 tax year. The election is annual and irrevocable. Plan ahead with your CPA.
Frequently Asked Questions
What are the New York PTET rates for 2026?
The New York Pass-Through Entity Tax (PTET) uses tiered rates based on the entity's taxable income allocated to NY: 6.85% on income up to $2 million; 9.65% on $2M–$5M; 10.30% on $5M–$25M; and 10.90% on income above $25M. For entities with income up to $25,000 the rate is 6.85%. An additional NYC PTET layer applies for entities with NYC presence at 3.876%, matching the NYC resident individual rate.
How does the NY PTET credit work for partners and shareholders?
Each qualified owner (partner, S-corp shareholder) receives a credit on their NY personal income tax return equal to their pro-rata share of the PTET paid by the entity. This is claimed on Form IT-204-IP (for partnerships) or IT-2658-MET equivalent for S-corps. The credit can reduce NY personal income tax to zero, with any excess refundable in some cases. The election bypasses the federal $40,000 SALT deduction cap because the PTET is paid at the entity level as a deductible business expense.
Who is eligible to make the NY PTET election?
Eligible entities are partnerships, LLCs taxed as partnerships, and S-corporations with at least one qualified owner. A qualified owner is a full-year or part-year New York State resident individual, or a trust or estate. The election is annual, must be made by March 15 for the current tax year, and all qualified owners must consent. Non-qualified owners (C-corps, exempt organizations) are excluded from the calculation.
What is the NYC PTET and who pays it?
The New York City Pass-Through Entity Tax (NYC PTET) is an additional layer at 3.876% — matching the NYC individual income tax rate for single filers. It applies to entities with NYC-source income (unincorporated businesses or those with NYC allocated income). Owners who are NYC residents receive a credit on their NYC personal income tax return, similarly bypassing the individual $40K SALT cap. Both NY PTET and NYC PTET can be elected simultaneously.
How does NY PTET compare to NJ and CT PTE taxes?
New Jersey BAIT (Business Alternative Income Tax) rates are 5.675%–10.9%, similar to NY PTET tiers, with a full credit to owners. Connecticut PTET is 6.99% flat on CT-source income with a 93% credit (not 100%), meaning a small net cost remains in CT. New York's PTET generally offers the highest absolute dollar savings for high-income earners due to NY's high income tax rates. For multi-state entities, a CPA should analyze each state's PTET and whether the combined entity-level deduction maximizes the federal savings.