MCTMT Changes

MCTMT Changes

The new law changes the MCTMT payment and filing due dates for self-employed individuals to conform to personal income tax due dates. These changes do not affect the payment or filing dates for employers.

INDIVIDUALS

For purposes of the MCTMT, self-employed individuals include:

• Sole proprietors
• Partners in partnerships
• Members of limited liability companies (LLCs) treated as partnerships for federal income tax purposes (hereafter, members will be referred to as partners.)
• Single-member LLCs treated as disregarded entities (sole proprietorships) for federal income tax purposes.

Estimates: Individuals with net earnings from self-employment have been required from the inception of the tax, to make estimated MCTMT payment and file annual MCTMT returns. Effective for tax years beginning on or after January 1, 2015, estimated MCTMT payments will be due at the same time as estimates for personal income tax–on April 15, June 15, September 15, and January 15. MCTMT estimated payments, starting with the payment due on April 15, 2015 (for calendar year filers), will need to be paid using a revised Form IT-2105, Estimated Tax Payment Voucher for Individuals, that will include a line for MCTMT payments.

Annual Tax: Beginning in tax year 2015, Annual MCTMT returns will be due on April 15th following the close of the tax year. In addition, beginning with tax year 2015, the separate return filing is repealed and the department will require self-employed individuals to include annual MCTMT information on their personal income tax returns.

PARTNERSHIPS WITHIN THE MCTD

For tax years beginning on or after January 1, 2015, resident and part-year resident partners must make individual estimated MCTMT payments using Form IT-2105 and report annual MCTMT information on their individual personal income tax returns. Nonresident partners must make individual estimated MCTMT payments using Form IT-2105 unless the partnership has made estimated MCTMT payments on the partners’ behalf. In addition, nonresident partners must report annual MCTMT information on their individual personal income tax returns except for partners who elect to participate in a personal income tax group return.

Partnerships doing business within the MCTD must make estimated MCTMT payments on behalf of partners who are nonresident individuals of New York State except in the following circumstances:

• The estimated MCTMT required to be paid for the tax year by the partnership on the nonresident partner’s behalf is $300 or less;
• The partnership is authorized to file a personal income tax group return and the partner has elected to be included on the group return;
• The partner submits the appropriate exemption certificate to the partnership.

In tax years beginning before January 1, 2015, a partnership could request permission to make group estimated payments and file a group return on behalf of its partners. If the partnership filed a group return, partners who elected to participate in the group return are not required to make individual filings.

For tax years beginning on or after January 1, 2015, the department requires MCTMT information to be reported on personal income tax returns. Therefore, any partnership that previously received permission to file a group MCTMT return has that permission revoked for tax years beginning on or after January 1, 2015.

However, partnerships with nonresident partners may apply for permission to file a group return for its nonresident partners only.

The tax law provides new enforcement and collection actions for the MCTMT.

When an individual makes a single payment of tax, the payment will be deemed to be made with respect to the taxes in proportion to the total amount of the combined taxes due.

ENFORCEMENT

When the department takes income tax collection actions, that collection action will be made with a joint action to collect MCTMT due. The amount collected by a joint action will be deemed to have been collected in proportion to the amounts due.

Finally, when the department takes action with respect to a deficiency of tax due, the department may accompany that action with a similar action for any deficiency of MCTMT.

NEED MORE INFORMATION?

If you have any questions about this Tax Tip, please contact your WithumSmith+Brown professional, a member of WS+B’s National Tax Services Group or email us at [email protected].

David Springsteen, CPA, MBA
Practice Leader, Tax Services Group
609.520.1188
[email protected]

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