Last week we reported on the fast-paced legislative efforts to extend New York’s 2022 pass-through entity tax (PTET) election deadline. To read that article, click here. In record time, the bill we reported on was signed into law by Governor Hochul on May 6, 2022. 

Under normal circumstances the deadline to elect to pay PTET would have passed on March 15, 2022. But the new law extends the 2022 PTET election deadline to September 15, 2022, provided the required estimated tax payments are made with the election.

The bill makes the following adjustments to the 2022 estimated payment requirements:

• Electing partnerships or S corporations that make the PTET election after March 15 and before June 15, 2022, must make an estimated tax payment with the election that represents 25% of the required annual payment, or the election is not valid.
• Electing partnerships or S corporations that make the PTET election after June 15 and before September 15, 2022, must make an estimated tax payment with the election that represents 50% of the required annual payment, or the election is not valid.
• An “electing resident S corporation” that made its PTET election on or before March 15, 2022 is required to make estimated tax payments on March 15 and June 15, 2022 representing 25% of the required annual payment as if such electing resident S corporation was an “electing standard S corporation.” For more detail on these two classes of electing S corporations click here.
• All electing resident S corporations are required as of September 15, 2022 to have paid 75% of the required annual payment.

Note that since the last date that the 2022 PTET election can be made is now September 15, 2022 and since estimated tax payments are required with the late election – there is some room to time the election based on cash availability.  A partnership that makes the late election on June 14 will have to make 25% of the required annual payment on that day.  A partnership that waits and does not make the late election until September 14 will have to make its first payment, totaling 50% of the required annual payment, on that day.