STATE OF NEW YORK ________________________________________________________________________ 625 2025-2026 Regular Sessions IN SENATE (Prefiled) January 8, 2025 ___________ Introduced by Sens. SKOUFIS, FERNANDEZ -- read twice and ordered print- ed, and when printed to be committed to the Committee on Investi- gations and Government Operations AN ACT to amend the tax law, in relation to the timing of annual tax elections The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (c) of section 861 of the tax law, as amended by 2 section 2 of subpart C of part J of chapter 59 of the laws of 2023, is 3 amended to read as follows: 4 (c) [The] For taxable years beginning before January first, two thou- 5 sand twenty-five, the annual election must be made on or before the due 6 date of the first estimated payment under section eight hundred sixty- 7 four of this article and will take effect for the current taxable year, 8 and for taxable years beginning on or after January first, two thousand 9 twenty-five, such election must be made by September fifteenth of the 10 taxable year for which such election is being made. Only one election 11 may be made during each calendar year. An election made under this 12 section is irrevocable after the due date. 13 § 2. Subsection (b) of section 864 of the tax law, as added by section 14 1 of part C of chapter 59 of the laws of 2021, paragraph 3 as amended by 15 chapter 555 of the laws of 2022, is amended to read as follows: 16 (b) General. The estimated tax shall be paid as follows for an elect- 17 ing partnership and an electing S corporation: 18 (1) The estimated tax shall be paid in four [equal] installments on 19 March fifteenth, June fifteenth, September fifteenth and December 20 fifteenth in the calendar year prior to the year in which the due date 21 of the return required by this article falls. 22 (2) Amount of required installment. (A) The amount of any required 23 installment shall be twenty-five percent of the required annual payment. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02020-01-5
S. 625 2 1 (B) In the case of any required installment, if the electing partner- 2 ship or the electing S corporation establishes that the annualized 3 income installment determined under subparagraph (B) of paragraph four 4 of subsection (c) of section six hundred eighty-five of this chapter is 5 less than the amount determined under subparagraph (A) of this para- 6 graph, the annualized income installment shall be the required install- 7 ment. Any reduction in a required installment resulting from the appli- 8 cation of this subparagraph shall be recaptured by increasing the amount 9 of the next required installment determined under this paragraph by the 10 amount of such reduction, and by increasing successive required install- 11 ments as necessary to effect full recapture. 12 (3) [Notwithstanding paragraph four of subsection (c) of section six 13 hundred eighty-five of this chapter, the] The required annual payment is 14 the lesser of: (A) ninety percent of the tax shown on the return for the 15 taxable year; or (B) one hundred percent of the tax shown on the return 16 of the electing partnership or electing S corporation for the preceding 17 taxable year. 18 (4) Without regard to paragraphs one and two of this subsection, if an 19 election is made on or after March fifteenth and before June fifteenth 20 of the taxable year for which such election is made, the electing part- 21 nership or electing S corporation is required to make an estimated tax 22 payment with such election in an amount equal to the first required 23 installment and if an election is made on or after June fifteenth and 24 before September fifteenth of the taxable year for which such election 25 is made, the electing partnership or electing S corporation is required 26 to make an estimated tax payment with such election in an amount equal 27 to the sum of the first and second required installments. 28 § 3. Subsection (c) of section 868 of the tax law, as amended by 29 section 7 of subpart C of part J of chapter 59 of the laws of 2023, is 30 amended to read as follows: 31 (c) [The annual election to be taxed pursuant to this article must be 32 made on or before the due date of the first estimated payment under 33 section eight hundred sixty-four of this chapter and will take effect 34 for the current taxable year.] Only one election to be taxed pursuant to 35 this article may be made during each calendar year. An election made 36 under this section is irrevocable after such due date. To the extent an 37 election made under section eight hundred sixty-one of this chapter is 38 revoked or otherwise invalidated an election made under this section is 39 automatically invalidated. 40 § 4. Subsection (b) of section 871 of the tax law, as added by section 41 1 of subpart B of part MM of chapter 59 of the laws of 2022, paragraph 3 42 as amended by chapter 555 of the laws of 2022, is amended to read as 43 follows: 44 (b) General. Except as provided in subsection (c) of this section, the 45 estimated tax shall be paid as follows for an electing city partnership 46 and an electing city resident S corporation: 47 (1) The estimated tax shall be paid in four [equal] installments on 48 March fifteenth, June fifteenth, September fifteenth and December 49 fifteenth in the calendar year prior to the year in which the due date 50 of the return required by this article falls. 51 (2) Amount of required installment. (A) The amount of any required 52 installment shall be twenty-five percent of the required annual payment. 53 (B) In the case of any required installment, if the electing city 54 partnership or the electing city resident S corporation establishes that 55 the annualized income installment determined under subparagraph (B) of 56 paragraph four of subsection (c) of section six hundred eighty-five of
S. 625 3 1 this chapter is less than the amount determined under subparagraph (A) 2 of this paragraph, the annualized income installment shall be the 3 required installment. Any reduction in a required installment resulting 4 from the application of this subparagraph shall be recaptured by 5 increasing the amount of the next required installment determined under 6 this paragraph by the amount of such reduction, and by increasing 7 successive required installments as necessary to effect full recapture. 8 (3) [Without regard to paragraph four of subsection (c) of section six 9 hundred eighty-five of this chapter, the] The required annual payment is 10 the lesser of: (A) ninety percent of the tax shown on the return for the 11 taxable year; or (B) one hundred percent of the tax shown on the return 12 of the electing city partnership or electing city resident S corporation 13 for the preceding taxable year. 14 (4) Without regard to paragraphs one and two of this subsection, if an 15 election is made on or after March fifteenth and before June fifteenth 16 of the taxable year for which such election is made, the electing part- 17 nership or electing S corporation is required to make an estimated tax 18 payment with such election in an amount equal to the first required 19 installment, and if an election is made on or after June fifteenth and 20 before September fifteenth of the taxable year for which such election 21 is made, the electing partnership or electing S corporation is required 22 to make an estimated tax payment with such election in an amount equal 23 to the sum of the first and second required installments. 24 § 5. This act shall take effect immediately and shall apply to taxable 25 years beginning on or after January 1, 2025.