S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1989
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 14, 2025
                                ___________
 
 Introduced by M. of A. PAULIN -- read once and referred to the Committee
   on Ways and Means
 
 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:

   Section 1. Subsection (c) of section 861 of the tax law, as amended by
 section  2  of subpart C of part J of chapter 59 of the laws of 2023, is
 amended to read as follows:
   (c) [The] FOR TAXABLE YEARS BEGINNING BEFORE JANUARY FIRST, TWO  THOU-
 SAND  TWENTY-FIVE, THE annual election must be made on or before the due
 date of the first estimated payment under section eight  hundred  sixty-
 four  of this article and will take effect for the current taxable year,
 AND FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND
 TWENTY-FIVE,  SUCH  ELECTION  MUST BE MADE BY SEPTEMBER FIFTEENTH OF THE
 TAXABLE YEAR FOR WHICH SUCH ELECTION IS BEING MADE.  Only  one  election
 may  be  made  during  each  calendar  year. An election made under this
 section is irrevocable after the due date.
   § 2. Subsection (b) of section 864 of the tax law, as added by section
 1 of part C of chapter 59 of the laws of 2021, paragraph 3 as amended by
 chapter 555 of the laws of 2022, is amended to read as follows:
   (b) General. The estimated tax shall be paid as follows for an  elect-
 ing partnership and an electing S corporation:
   (1)  The  estimated  tax shall be paid in four [equal] installments on
 March  fifteenth,  June  fifteenth,  September  fifteenth  and  December
 fifteenth  in  the calendar year prior to the year in which the due date
 of the return required by this article falls.
   (2) AMOUNT OF REQUIRED INSTALLMENT. (A) The  amount  of  any  required
 installment shall be twenty-five percent of the required annual payment.
   (B)  IN THE CASE OF ANY REQUIRED INSTALLMENT, IF THE ELECTING PARTNER-
 SHIP OR THE ELECTING  S  CORPORATION  ESTABLISHES  THAT  THE  ANNUALIZED
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02020-01-5
              

 A. 1989                             2
 
 INCOME  INSTALLMENT  DETERMINED UNDER SUBPARAGRAPH (B) OF PARAGRAPH FOUR
 OF SUBSECTION (C) OF SECTION SIX HUNDRED EIGHTY-FIVE OF THIS CHAPTER  IS
 LESS  THAN  THE  AMOUNT  DETERMINED UNDER SUBPARAGRAPH (A) OF THIS PARA-
 GRAPH,  THE ANNUALIZED INCOME INSTALLMENT SHALL BE THE REQUIRED INSTALL-
 MENT. ANY REDUCTION IN A REQUIRED INSTALLMENT RESULTING FROM THE  APPLI-
 CATION OF THIS SUBPARAGRAPH SHALL BE RECAPTURED BY INCREASING THE AMOUNT
 OF  THE NEXT REQUIRED INSTALLMENT DETERMINED UNDER THIS PARAGRAPH BY THE
 AMOUNT OF SUCH REDUCTION, AND BY INCREASING SUCCESSIVE REQUIRED INSTALL-
 MENTS AS NECESSARY TO EFFECT FULL RECAPTURE.
   (3) [Notwithstanding paragraph four of subsection (c) of  section  six
 hundred eighty-five of this chapter, the] THE required annual payment is
 the lesser of: (A) ninety percent of the tax shown on the return for the
 taxable  year; or (B) one hundred percent of the tax shown on the return
 of the electing partnership or electing S corporation for the  preceding
 taxable year.
   (4) WITHOUT REGARD TO PARAGRAPHS ONE AND TWO OF THIS SUBSECTION, IF AN
 ELECTION  IS  MADE ON OR AFTER MARCH FIFTEENTH AND BEFORE JUNE FIFTEENTH
 OF THE TAXABLE YEAR FOR WHICH SUCH ELECTION IS MADE, THE ELECTING  PART-
 NERSHIP  OR  ELECTING S CORPORATION IS REQUIRED TO MAKE AN ESTIMATED TAX
 PAYMENT WITH SUCH ELECTION IN AN AMOUNT  EQUAL  TO  THE  FIRST  REQUIRED
 INSTALLMENT  AND  IF  AN ELECTION IS MADE ON OR AFTER JUNE FIFTEENTH AND
 BEFORE SEPTEMBER FIFTEENTH OF THE TAXABLE YEAR FOR WHICH  SUCH  ELECTION
 IS  MADE, THE ELECTING PARTNERSHIP OR ELECTING S CORPORATION IS REQUIRED
 TO MAKE AN ESTIMATED TAX PAYMENT WITH SUCH ELECTION IN AN  AMOUNT  EQUAL
 TO THE SUM OF THE FIRST AND SECOND REQUIRED INSTALLMENTS.
   §  3.  Subsection  (c)  of  section  868 of the tax law, as amended by
 section 7 of subpart C of part J of chapter 59 of the laws of  2023,  is
 amended to read as follows:
   (c)  [The annual election to be taxed pursuant to this article must be
 made on or before the due date of  the  first  estimated  payment  under
 section  eight  hundred  sixty-four of this chapter and will take effect
 for the current taxable year.] Only one election to be taxed pursuant to
 this article may be made during each calendar  year.  An  election  made
 under  this section is irrevocable after such due date. To the extent an
 election made under section eight hundred sixty-one of this  chapter  is
 revoked  or otherwise invalidated an election made under this section is
 automatically invalidated.
   § 4. Subsection (b) of section 871 of the tax law, as added by section
 1 of subpart B of part MM of chapter 59 of the laws of 2022, paragraph 3
 as amended by chapter 555 of the laws of 2022, is  amended  to  read  as
 follows:
   (b) General. Except as provided in subsection (c) of this section, the
 estimated  tax shall be paid as follows for an electing city partnership
 and an electing city resident S corporation:
   (1) The estimated tax shall be paid in four  [equal]  installments  on
 March  fifteenth,  June  fifteenth,  September  fifteenth  and  December
 fifteenth in the calendar year prior to the year in which the  due  date
 of the return required by this article falls.
   (2)  AMOUNT  OF  REQUIRED  INSTALLMENT. (A) The amount of any required
 installment shall be twenty-five percent of the required annual payment.
   (B) IN THE CASE OF ANY REQUIRED  INSTALLMENT,  IF  THE  ELECTING  CITY
 PARTNERSHIP OR THE ELECTING CITY RESIDENT S CORPORATION ESTABLISHES THAT
 THE  ANNUALIZED  INCOME INSTALLMENT DETERMINED UNDER SUBPARAGRAPH (B) OF
 PARAGRAPH FOUR OF SUBSECTION (C) OF SECTION SIX HUNDRED  EIGHTY-FIVE  OF
 THIS  CHAPTER  IS LESS THAN THE AMOUNT DETERMINED UNDER SUBPARAGRAPH (A)
 OF THIS PARAGRAPH,  THE  ANNUALIZED  INCOME  INSTALLMENT  SHALL  BE  THE
 A. 1989                             3
 
 REQUIRED  INSTALLMENT. ANY REDUCTION IN A REQUIRED INSTALLMENT RESULTING
 FROM THE  APPLICATION  OF  THIS  SUBPARAGRAPH  SHALL  BE  RECAPTURED  BY
 INCREASING  THE AMOUNT OF THE NEXT REQUIRED INSTALLMENT DETERMINED UNDER
 THIS  PARAGRAPH  BY  THE  AMOUNT  OF  SUCH  REDUCTION, AND BY INCREASING
 SUCCESSIVE REQUIRED INSTALLMENTS AS NECESSARY TO EFFECT FULL RECAPTURE.
   (3) [Without regard to paragraph four of subsection (c) of section six
 hundred eighty-five of this chapter, the] THE required annual payment is
 the lesser of: (A) ninety percent of the tax shown on the return for the
 taxable year; or (B) one hundred percent of the tax shown on the  return
 of the electing city partnership or electing city resident S corporation
 for the preceding taxable year.
   (4) WITHOUT REGARD TO PARAGRAPHS ONE AND TWO OF THIS SUBSECTION, IF AN
 ELECTION  IS  MADE ON OR AFTER MARCH FIFTEENTH AND BEFORE JUNE FIFTEENTH
 OF THE TAXABLE YEAR FOR WHICH SUCH ELECTION IS MADE, THE ELECTING  PART-
 NERSHIP  OR  ELECTING S CORPORATION IS REQUIRED TO MAKE AN ESTIMATED TAX
 PAYMENT WITH SUCH ELECTION IN AN AMOUNT  EQUAL  TO  THE  FIRST  REQUIRED
 INSTALLMENT,  AND  IF AN ELECTION IS MADE ON OR AFTER JUNE FIFTEENTH AND
 BEFORE SEPTEMBER FIFTEENTH OF THE TAXABLE YEAR FOR WHICH  SUCH  ELECTION
 IS  MADE, THE ELECTING PARTNERSHIP OR ELECTING S CORPORATION IS REQUIRED
 TO MAKE AN ESTIMATED TAX PAYMENT WITH SUCH ELECTION IN AN  AMOUNT  EQUAL
 TO THE SUM OF THE FIRST AND SECOND REQUIRED INSTALLMENTS.
   § 5. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2025.