N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 7-3.3

Current through Register Vol. 46, No. 36, September 4, 2024

Section 7-3.3 - First installment of estimated tax for certain taxpayers

(Tax Law, section 213-b(a))

(a) New York S Corporations. Every New York S corporation subject to the tax imposed by article 9-A must pay with its report required for the immediately preceding taxable year, or with an application for extension of the time for filing such report, a mandatory first installment of estimated tax equal to:

(1) 25% of such preceding year's tax, if such tax exceeded $1,000 but was equal to or less than $100,000; or

(2) 40% of such preceding year's tax, if such tax exceeded $100,000.

(b) New York C corporations. Every New York C corporation subject to the tax imposed by article 9-A must file form CT-300 on or before the fifteenth day of the third month following the close of its taxable year and pay with such form a mandatory first installment of estimated tax equal to:

(1) 25% of the second preceding year's tax, if such tax exceeded $1,000 but was equal to or less than $100,000; or

(2) 40% of the second preceding year's tax, if such tax exceeded $100,000.

(c) The mandatory first installment required to be paid pursuant to this section must be paid for a taxable year of any length, including short taxable years.

(d) Examples.

Example 1: Corporation A, a New York C corporation, is a calendar-year filer.

Its tax for the 2020 taxable year is $200,000 and its tax for the 2021 taxable year is $50,000. Since the mandatory first installment of estimated tax for C corporations is based on the second preceding year's tax, Corporation A must pay a mandatory first installment of estimated tax for the 2022 taxable year equal to $80,000 (40% of $200,000). The installment must be made on form CT-300, on or before March 15, 2022.

Example 2: Corporation B, a New York S corporation, is a calendar-year filer.

Its tax for the 2021 taxable year is $3,000. Since the mandatory first installment for S corporations is based on the preceding year's tax, Corporation B must pay a mandatory first installment of estimated tax for the 2022 taxable year equal to $750 (25% of $3,000). The installment must be made with its report required for the 2021 taxable year (or with its application for extension) due on or before March 15, 2022.

Example 3: Corporation C, a New York C corporation, has two short periods for the 2021 taxable year. Its tax for the first 2021 short period, January 1, 2021, through August 31, 2021, is $710,000 and its tax for the second 2021 short period, September 1, 2021, through December 31, 2021, is $340,000. Corporation C must pay a mandatory first installment of estimated tax for the 2022 taxable year equal to $284,000 (40% of $710,000) on form CT-300, on or before March 15, 2022.

Example 4: Corporation D, a New York C corporation, is a calendar-year filer.

Its tax for the 2020 taxable year is $10,000,000 and its tax for the 2021 taxable year is $16,000,000. Corporation D knows that a short period report will be required pursuant to section 6-1.2 of this Subchapter for the period January 1, 2022, through March 31, 2022. It must still pay a mandatory first installment of estimated tax for the 2022 taxable year equal to $4,000,000 (40% of $10,000,000) on form CT-300, on or before March 15, 2022.

Example 5: Corporation E, a New York C corporation, first becomes subject to tax under article 9-A on June 1, 2021. Its first New York taxable year runs June 1, 2021, through December 31, 2021. Corporation E is not required to pay a mandatory first installment of estimated tax for the 2022 taxable year because it was not required to file a report for the second preceding taxable year of 2020.

N.Y. Comp. Codes R. & Regs. Tit. 20 §§ 7-3.3

Adopted New York State Register December 27, 2023/Volume XLV, Issue 52, eff. 12/27/2023