“Of Interest” Proposed Legislation In New York: What’s Pending and What It Could Mean

This blog post will cover several noteworthy, recently-introduced pieces of New York tax legislation. While these bills are set to expire today at the end of the current legislative session, these bills may be reintroduced when the new legislative session begins in January 2021. If ultimately passed, these new pieces of legislation could have a significant impact on New York taxpayers, so we plan to keep these bills on our radar and track their progression through the legislative process when the new session begins.

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NY Tax Talk: 2020 in the Rearview

The end of 2020 is here. A time to reflect and appreciate the memories and blessings of the past...oh, never mind. I can't even fake it. 2020 is finally coming to a close. So long. Farewell. Good riddance.

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Clarity at Last – IRS Indicates Forthcoming Approval of SALT Cap Pass-Through Entity Workarounds

On November 9, 2020, the IRS issued Notice 2020-75 (the “Notice”) informing taxpayers that forthcoming proposed regulations would clarify that state and local income taxes imposed on and paid by a partnership or S corporation (a “pass-through entity” or “PTE”) on its income are allowed as a deduction by the PTE in computing its non-separately stated taxable income or loss for the year of the payment, meaning that such payments are not taken into account in applying the State and local tax (“SALT”) cap limitation to any individual who is a partner of shareholder in the PTE.

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New Trend in Residency Audits?

Over the past few weeks, several of our clients have received letters from the New York Tax Department’s desk audit unit inquiring about their 2018 tax return. These have all been form letters, all asking the same questions, and looking something like this letter. From what we can tell, all of these letters have been issued to taxpayers who fall generally in the same circumstances: they either changed their residency during 2018 and thus filed a part-year resident return, or they filed as New York residents in 2017 and then as full-year nonresidents in 2018.

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New York Tax Department Finally Issues Guidance on COVID-19 Telecommuting

As we have chronicled in blog posts over the past several months, many states have issued guidance related to how state personal income taxes will be handled during the COVID-19 pandemic, with a specific focus on telecommuting employees. Last month we also published an article in Tax Notes State on the issue. The primary question has been whether an employee telecommuting from outside a state due to the pandemic owes personal income tax in their home state or in their employer’s state (or both!).

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NY Tax Talk: Trump Tax Returns, Revenue Rebound, Reform

After a brief hiatus, NY Tax Minutes is back this month under the new moniker, NY Tax Talk. New name. Same approach. To give readers a one stop shop for recent New York state and city tax news.

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State Guidance related to COVID-19: Telecommuting Issues

UPDATED OCTOBER 25, 2021

Due to the COVID-19 pandemic, millions of people have been telecommuting for over a year, either from their home state or elsewhere.  Even as some states open their economies back up, it does not change the fact that companies have been allowing employees to telecommute for a significant amount of time. And many companies are allowing employees to telecommute on a more indefinite basis.  Allowing employees to telecommute from states in which they do not normally work can create a host of issues for employers, but the two big tax issues relate to nexus and income tax.

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Another (!) Note on Cell Phone Records

Last year we published a full-length article in State Tax Notes that discussed the importance of cell phone records in residency audits and did a deeper dive on some of the issues we’ve seen come up in reviewing various cell phone records in these audits. Here is a link to that article:  https://www.hodgsonruss.com/assets/htmldocuments/2019stn16-4.pdf   

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New York Confirms Estimated Tax Payment Due June 15

Last week we published an alert regarding the upcoming June 15 New York estimated tax deadline, noting that taxpayers still needed to pay their New York State and City second quarter estimated payments for 2020 because the New York State Tax Department had made no pronouncements extending the due date to July 15, as the IRS had done. The Department’s silence on the issue left many tax practitioners and taxpayers confused about what to pay and when to pay it.

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Shining a Light on Covid-19 Telecommuting and NYC’s UBT: A Windfall for Hedge Funds and Other Professional Services Firms?

The current pandemic has changed the working landscape for commuters everywhere and their employers. This is especially true in New York City, which became the epicenter for the crisis and poster child for the telecommuting work force. Now more than ever, individuals who used to travel into the City for work are logging in remotely from home, delivering their services miles away from their Manhattan offices. This has created interesting personal income tax questions, and as we will discuss below, potential saving opportunities for professional service companies subject to the NYC Unincorporated Business Tax (UBT). 

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