NASSAUSUFFOLK

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

no

the Schedule C owner with no employees DOES NOT QUALIFY

the S corp sole shareholder does qualify if he/she/they are the only employee

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

Is a self employed individual considered an employee for this deduction (no other

employees) because he/she is self EMPLOYED?

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

Is a self employed individual considered an employee for this deduction (no other

employees) because he/she is self EMPLOYED?

NY Small Business Subtraction Modification:

This is something that was only available to Sole Proprietors with at least one employee prior to 2022.  If one's Sch C had less than $250,000 net ioncome, NY allowed a 5% reduction to net income. See https://www.tax.ny.gov/pdf/memos/multitax/m14_3c_5i.pdf

 Beginning in 2022, the 5% was increased to 15% and is now available to sole proprietors, S-Corps, and Partnerships, if qualifications are met. 
Read this paragraph from a Hodgson Russ 4/12/22 Publication:

Part C of the Budget increases the small business subtraction modification percentage in both the State and City personal income taxes, and expands the modification-previously available only to proprietorships with at least one employee and net business income or farm income of less than $250,000-to include members of certain flow-through entities that are small businesses or farm businesses.  Beginning in 2022, the subtraction modification will be increased from 5% to 15%, and it will be available to:  (a) sole proprietors with one or more employees and less than $250,000 of net business income or net farm income; (b) owners of New York S corporations and tax-partnerships with one or more employees and net farm income of less than $250,000; and (c) owners of New York S corporations and tax-partnerships with one or more employees and less than $1.5 million of "New  York gross business income" attributable to a non-farm business.  For tax-partnerships, "New York gross business income" is defined by reference to Tax Law § 658(c)(3)(B)'s definition of "New York source gross income."  And for New York S corporations, "New York gross business income" is defined by reference to the receipts included in the numerator of the corporation's apportionment factor.   Non-farm flow-through entity owners otherwise entitled to the small business subtraction modification will be disqualified if the sum of their income from such entities exceeds $250,000.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

We are also using UltraTax and haven't seen any diagnostics to indicate this should be calculated.  Looks like it may need to be an override until they update.  Does anyone know where/how this is reported? Ultimately it will end up on the personal form but where do we indicate the subtraction modification to be reported on the corp or partnership K-1?  The IT-225 directly or is there an additional source form?

 

Kim Perlman, CPA

Breiter & Raines, LLP

20 Squadron Blvd Suite 210B

New City, NY 10956

 

845-708-0200 Phone

845-570-5011 Fax

 

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

Hello everyone ... I have a situation where the partnership qualifies for this deduction and is a NY LLC, with also having operations in NJ... i would say approx. 35% of their receipts are NJ sourced.... in this situation, once we get clarity on calculation of the deduction, do you include only NY sourced income OR entire Federal income?... i know it maybe a tough question to answer but i am hoping someone else is also running into this issue... thank you.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

Hello everyone ... I have a situation where the partnership qualifies for this deduction and is a NY LLC, with also having operations in NJ... i would say approx. 35% of their receipts are NJ sourced.... in this situation, once we get clarity on calculation of the deduction, do you include only NY sourced income OR entire Federal income?... i know it maybe a tough question to answer but i am hoping someone else is also running into this issue... thank you.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

------------------------------
Gabriel Bentovim
HOFFMAN & BENTOVIM, CPAs PC
Commack NY
631-499-1500
------------------------------

In computing the 15% adjustment, assuming all sourced income are from NY and meet the criteria, are we simply using 15% of the federal net income or is it net of NYS adjustments such as NYS Franchise Tax addbacks, depreciation adjustments, etc.. I want to make the adjustment on the S Corp return using CT-225 line S-201 but there is no calculations with my program, just a manual input. 

On the Individual instructions, it states "then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income"  

So my assumption is on the corporate return on form CT-225, simply take 15% of the ordinary income without taking into account any state adjustments already made and input that # on Line S-201; but that doesn't seem right. What do you guys think?

------------------------------
MATTHEW SAVELLO CPA
FUENTES & ANGEL CPAs LLC
Commack NY
------------------------------

Original Message:
Sent: 02-07-2023 12:31 PM
From: Gabriel Bentovim
Subject: NYS SMALL BUSINESS ADJUSTMENT

A  CPA in our building received this from another CPA. Does anyone know if this is a legitimate adjustment. The instructions still indicate that it is only viable for farms. Our software, Ultra tax and his software Lacerte make no adjustments for this or give any diagnostics that this even exists.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

------------------------------
Gabriel Bentovim
HOFFMAN & BENTOVIM, CPAs PC
Commack NY
631-499-1500
------------------------------

In computing the 15% adjustment, assuming all sourced income are from NY and meet the criteria, are we simply using 15% of the federal net income or is it net of NYS adjustments such as NYS Franchise Tax addbacks, depreciation adjustments, etc.. I want to make the adjustment on the S Corp return using CT-225 line S-201 but there is no calculations with my program, just a manual input. 

On the Individual instructions, it states "then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income"  

So my assumption is on the corporate return on form CT-225, simply take 15% of the ordinary income without taking into account any state adjustments already made and input that # on Line S-201; but that doesn't seem right. What do you guys think?

------------------------------
MATTHEW SAVELLO CPA
FUENTES & ANGEL CPAs LLC
Commack NY

Original Message:
Sent: 02-07-2023 12:31 PM
From: Gabriel Bentovim
Subject: NYS SMALL BUSINESS ADJUSTMENT

A  CPA in our building received this from another CPA. Does anyone know if this is a legitimate adjustment. The instructions still indicate that it is only viable for farms. Our software, Ultra tax and his software Lacerte make no adjustments for this or give any diagnostics that this even exists.

S-201: Small business modification If you meet the definition of a small business (see below) or are a member, partner, or shareholder of an LLC, partnership, or New York S corporation that meets the definition of a small business (see below), then you may deduct an amount equal to 15% of the net items of income, gain, loss, and deduction attributable to that business that are included in your federal adjusted gross income. Do not enter an amount less than zero. For purposes of this subtraction modification, a small business means: • a sole proprietor who employs one or more persons during the tax year, and has net business income or net farm income of greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has net farm income attributable to a farm business that is greater than zero but less than $250,000; or • an LLC, partnership, or New York S corporation that employs one or more persons during the tax year, and has New York gross business* income attributable to a non-farm business that is greater than zero but less than $1,500,000. In addition, in order to qualify for this subtraction modification, a taxpayer who is a member, partner, or shareholder of an LLC, partnership, or New York S corporation, that is a non-farm small business, must have income attributable to the net business income from its ownership interests that is less than $250,000. Note: For purposes of this modification, New York gross business income, for an LLC or a partnership, means New York source gross income as defined in Tax Law § 658(c)(3)(B). For a New York S corporation, New York gross business income means the New York receipts included in the numerator of the apportionment factor determined under Tax Law § 210-A. For more information, see New for 2022 (search: 2022).

 I could not find this paragraph in any of my research.

------------------------------
Gabriel Bentovim
HOFFMAN & BENTOVIM, CPAs PC
Commack NY
631-499-1500
------------------------------