Corporate Tax Forms for NYC, NYS Missing in Action; Snarls Filing Process

By:
Chris Gaetano
Published Date:
Feb 2, 2016

nysimageDelays in corporate filings for both New York City and New York state persist as the required forms and guidelines remain incomplete and unavailable only weeks away from the March 15 deadline.   

NYSSCPA member Michael Williams, chair of the Closely Held and S Corporations Committee and a partner at his firm, said that these delays will be the source of major headaches in the days to come.

"We'll have to put clients on extensions that normally would not be, and that's always a difficult thing for clients to understand that normally don't file for one,” said Williams. “So it will cause some confusion, I think, because while people can get their federal returns timely and properly, New York City will be delayed."

Changes to the city's corporate tax structure last
April mandated the use of the new Form NYC-2 and NYC-2A for all federal C-corporations -- forms which, as of today, are somehow not available. The NYC-2 form is still in draft stage, while the instructions for the NYC-2A form are in development as well. The city's Department of Finance has advised "that these business taxpayers file for an extension using the NYC-EXT before March 15, 2016."  

This advice may also apply on the state level. As of today, the updated forms IT-204, IT-204.1 and IT-204-CP, which pertain to partnership taxes, have not been released. Consequently, Albany has advised that people “not file Form IT-204” if a corporation is a member of the partnership “until these forms are available.”   

The lack of forms may not be the only problem. Williams predicted that another source of delays will be dealing with the new rules Albany recently created in its corporate tax reform. In particular, New York adopted economic nexus rules, meaning nexus is established on the basis of receipts within the state. Since most businesses are used to nexus being established by physical presence, he was concerned these changes could catch clients unaware. 

"There's always that question if New York says economic nexus and state A says physical presence. It will cause some confusion because there are different ways of allocating income,”  said Williams. 

The NYSSCPA Tax Division Oversight Committee's Rapid Response Subcommittee plans to meet tomorrow to discuss the problem.

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