Since state income tax is imposed directly on the Pass-through Entity, the income tax paid is fully deductible by the entity for federal income tax purposes and not limited by the $10,000 cap, which does not apply to business entities. This new tax is enacted as a work around to the $10,000 state and local tax (“SALT”) deduction limitation, which was implemented under the Tax Cuts and Jobs Act (“TCJA”). One of the key favorable provisions of the law is a new, elective Pass-through Entity (“PTE”) Tax. The budget supports through significant tax increases, the Governor's $311 billion infrastructure plan, which is the largest and the most expansive in New York State's history. On April 19, 2021, New York Governor Andrew Cuomo signed the 2021-2022 budget bill into law. Can New York State’s Pass-Through Entity Tax Program Help Reduce your Overall Tax Burden?
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