After a month long delay, New York State has passed the State’s fiscal year 2023-2024 budget bill into law. Below is the summary of a notable income and tax provisions of the new budget.
Treatment of limited partners under MCTMT. The budget amends a Metropolitan Commuter Transportation Mobility Tax (MCTMT) provision to clarify that only true limited partners are not subject to the tax. Partners who take part in the management or operations of the partnership remain subject to the provisions of the MCTMT.
MCTMT Payroll Tax. For employers in the counties of Bronx, Kings, New York, Queens, and Richmond, the top rate is increased from 0.34% to 0.6%, applicable to tax quarters beginning on or after July 1, 2023. The top rate is for an employer that paid over $437,500 in a calendar quarter.
MCTMT Self Employment Tax. For individuals subject to the tax with net earnings from self-employment attributable to the Metropolitan Commuter Transportation District in the counties of Bronx, Kings, New York, Queens, and Richmond, the rate is increased from 0.34% to 0.47% for tax year 2023 and to 0.6% for taxable years beginning on or after January 1, 2024.
Minimum Wage Increases. Beginning January 1, 2024 minimum wage will be $16.00 in New York City and Westchester, Nassau and Suffolk Counties, and $15.00 elsewhere.
Empire State Child Credit. Expands eligibility for the empire state child credit, applicable to taxable years beginning after 2022. Specifically, the credit is amended so that a child is no longer required to be at least four years of age in order to qualify.
Corporate franchise tax rates. The budget extends the current 7.25% business income tax rate for three years, through tax year 2026, for taxpayers with a business income base over $5 million. In addition, the current 0.1875% capital base tax rate is also extended for three years, through tax year 2026.
Metropolitan transportation business tax surcharge. A permanent rate of 30% is set for the Article 9-A metropolitan transportation business tax surcharge, for taxable years beginning after 2023.
Film credits. The budget extends and enhances the empire state film production and post-production credits, generally applicable to initial applications received on or after April 1, 2023. Among other changes, the yearly funding cap is increased from $420 million to $700 million, beginning in 2024, and the credits are extended through 2034.
Pass-through entity taxes. The budget makes certain technical corrections to the state and New York City pass-through entity tax provisions, for example requiring entities to include any pass-through entity taxes, which were deducted in the taxable year for federal income tax purposes, in the computation of their pass-through entity taxable income and city pass-through entity taxable income.
For those that are so inclined, or need help falling asleep, the budget can be found by clicking here.
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