Finally some great news for the taxpayers!!!
New York State has passed a law and the IRS has issued regulations that allow for the deduction of SALT taxes at the entity level. This will allow taxpayers to pay the tax due on income from Pass Through Entities (Partnerships, LLC’s and S Corporations) and thus reduce their federal income tax liability. At a time where expected federal tax hikes are coming this is an excellent opportunity to mitigate some of that projected increase in taxes.
This election MUST be made annually by the taxpayer. Your tax professional is not and can not be authorized to make the election on your behalf. However, please notify your WZ accountant if you make the election.
This is a new law and the guidelines have only recently been provided by NYS. The election due dates and important items of note are as follows:
For the calendar tax year beginning January 1, 2021 and ending December 31, 2021 the election MUST be made by October 15, 2021 (no extensions are available)
For the calendar tax year beginning January 1, 2022 and ending December 31, 2022 the election MUST be made by March 15, 2022 (no extensions are available)
Once the election is made it is irrevocable for that tax year.
Any estimated tax payments for the current tax year ending December 31, 2021 must be paid by December 31, to be deducted if you are a cash basis taxpayer.
For tax year ended 2022 quarterly estimates will be required and due on March 15, June 15, September 15 and December 15.