N.Y. Tax Law 861 – Pass-through entity tax election
§ 861. Pass-through entity tax election. (a) Any eligible partnership or eligible S corporation shall be allowed to make an annual election to be taxed pursuant to this article.
Terms Used In N.Y. Tax Law 861
- 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.
(b) In order to be effective, the annual election must be made (1) if the entity is an S corporation, by any officer, manager or shareholder of the S corporation who is authorized under the law of the state where the corporation is incorporated or under the S corporation's organizational documents to make the election and who represents to having such authorization under penalty of perjury; or (2) if the entity is not an S corporation, by any member, partner, owner, or other individual with authority to bind the entity or sign returns pursuant to section six hundred fifty-three of this chapter.
(c) The annual election must be made on or before the due date of the first estimated payment under section eight hundred sixty-four of this article and will take effect for the current taxable year. Only one election may be made during each calendar year. An election made under this section is irrevocable after the due date.
(d) Special rules for electing S corporations. (1) An electing S corporation must certify at the time of its election that all shareholders are residents of New York for purposes of article twenty-two of this chapter to be considered an electing resident S corporation.
(2) If an electing S corporation does not make a certification under paragraph one of this subsection at the time of its election, the electing S corporation is automatically treated as an electing standard S corporation.
(3) If an electing S corporation makes a certification under paragraph one of this subsection to be an electing resident S corporation, this certification is irrevocable as of the due date of the election.