N.Y. Tax Law 863 – Pass-through entity tax credit
§ 863. Pass-through entity tax credit. (a) Personal income tax credit. (1) A taxpayer subject to tax under article twenty-two of this chapter that is a direct partner or member in an electing partnership or a direct shareholder of an electing S corporation subject to tax under this article shall be allowed a credit against the tax imposed pursuant to article twenty-two of this chapter, computed pursuant to the provisions of subsection (kkk) of section six hundred six of this chapter. An entity that is disregarded for tax purposes will be disregarded for purposes of determining if a taxpayer is a direct partner or member of an electing partnership or direct shareholder of an electing S corporation.
Terms Used In N.Y. Tax Law 863
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
(2) Limitation on credit. No credit shall be allowed to a taxpayer under paragraph one of this subsection unless the electing partnership or electing S corporation paid the tax imposed under this article and provided sufficient information on the pass-through entity tax return as prescribed by the commissioner to identify that taxpayer. Such information shall include, but not be limited to, the social security number or taxpayer identification number of the article twenty-two taxpayer who will claim the credit (even in the case of a disregarded entity owned by such taxpayer).
(b) Limitation on credit. The aggregate amount of credits claimed by all partners, members or shareholders of an electing partnership or electing S corporation pursuant to subsection (a) of this section shall not exceed the tax due under subsection (a) of section eight hundred sixty-two of this article from such electing partnership or electing S corporation for the taxable year.