For tax years beginning on or after January 1, 1997, a New York City resident individual, estate or trust, or a New York City part-year resident individual or trust may be eligible for a credit on their personal income tax return for New York City unincorporated business tax (UBT) imposed. The credit is also available to partners in partnerships and beneficiaries of estates or trusts that are subject to the New York City UBT.
The credit is only allowed against the following New York City taxes:
- The tax computed on taxable income;
- The separate tax on lump-sum distributions; and
- The tax on capital gain portion of a lump-sum distribution.
If you are a part-year resident and a member of a partnership, you are only eligible to claim a credit for your allocated share of the UBT imposed on your partnership. For more information about claiming this credit as a partner, see the line instructions for Part 1 below.
All references in these instructions to partners in partnerships also include members of limited liability partnerships (LLP), and members of limited liability companies (LLC), limited liability investment companies (LLIC), and limited liability trust companies (LLTC) treated as partnerships.
The amount of credit allowed to a New York City resident or part-year resident with city taxable income of $42,000 or less is 100% of the UBT imposed. The credit decreases gradually from 100% to 23% for taxpayers with city taxable incomes more than $42,000 but less than $142,000. For taxpayers with city taxable incomes of $142,000 or more, the credit is 23% of the UBT imposed. However, the credit allowed cannot exceed the New York City personal income tax (the credit can only reduce your New York City tax liability to zero). Any unused credit cannot be refunded or carried over.
These instructions apply to the New York City personal income tax credit for UBT paid to New York City. They do not apply to the New York City UB return, which is administered by the New York City Department of Finance,
66 John Street, 3rd Floor
New York NY 10038-3735.
To claim this credit, you must be a resident individual, estate or trust, or a part-year resident individual or trust of New York City, and you must be:
- The owner of a business,
- A beneficiary of an estate or trust, or
- A partner in a partnership; whose business, estate or trust, or partnership is subject to the New York City UBT.