New York LLC Taxes

New York LLC Tax Basics

Navigating your New York LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain New York’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• New York LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• New York State Taxes
• Local Tax Considerations
• Tax Calendar and Filing Tips
• Tax Strategies for New York LLCs
• Forms and Resources

New York LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
New York State Income Tax	4%–10.9%	April 15, 2025	Form IT-201
New York Pass-Through Entity Tax	6.85%–10.9%	March 15, 2025	Filed online
New York Corporate Franchise Tax	4.8%-6.5% or $25–$200K	April 15, 2025	Form CT-3
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
New York Unemployment Tax (If Employees)	2.1%–9.9% (new employers: 4.1%)	Quarterly	Filed online
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
New York Sales & Use Tax	4%	Monthly, quarterly, or annually based on sales volume	Form ST-100
NYC Unincorporated Business Tax	4%	March 15, 2025	Form NYC-202
Annual Fee	$25–$4,500	March 15, 2025	Form IT-204-LL
Biennial Statement	$9	Every 2 years (by the end of your LLC’s formation month)	File online

Understanding LLC Taxation Basics

How New York LLCs Are Taxed By Default

Your New York LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your New York LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

New York Pass-Through Entity Tax Option:

• Optional tax that allows LLCs taxed as partnerships or S Corps to pay tax at the entity level
• Can help overcome the $10,000 SALT deduction limitation
• Must be elected by March 15 each year

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a New York LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

New York State Taxes

New York Income Tax

New York has a progressive personal income tax rate ranging from 4% to 10.9% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use New York Form IT-201
• Due April 15, 2025
• Based on federal adjusted gross income, with NY-specific additions and subtractions

Bottom Line: For every $1,000 your LLC earns, you can expect to pay somewhere between $40 and $109 in New York state income tax (in addition to federal taxes).

New York Pass-Through Entity Tax (PTET)

This optional tax can benefit many New York LLC owners:

• Tax rate: 6.85% to 10.9% (based on total income)
• Paid by your LLC instead of individual members
• Members receive a tax credit on their personal returns
• Helps bypass the $10,000 SALT deduction limitation
• Must elect by March 15 of each year through the NYS Online Services portal
• Applies only for the current year and does not carry over automatically

Real Savings Example: For an LLC with $200,000 in profits, the PTET could save owners up to $9,000 in federal taxes by working around the SALT deduction cap.

New York Corporate Franchise Tax

If your LLC is taxed as a C corp, it must pay New York’s Corporate Franchise Tax.

• Calculated on 6.5% income, 0.1875% capital, or $25–$200K fixed fee (whichever is higher)
• Filed using Form CT-3
• Due April 15, 2025
• Lower rates apply for certain business types (e.g. emerging tech, manufacturing, etc.)  

Sales and Use Tax

If your New York LLC sells physical products or certain services:

• Collect 4% sales tax (plus any applicable local surcharges)
• Register for a Sales Tax Certificate of Authority through the NYS Department of Taxation and Finance
• File and pay collected taxes monthly, quarterly, or annually based on sales volume (assigned by the state) 
• Use New York Form ST-100 

60-Second Check: Do I Need to Collect Sales Tax?

• Do you sell physical products in New York? → If yes, collect tax
• Do you sell digital products? → Generally not taxable
• Do you provide services? → Most services are exempt 
• Do you sell online to New York customers? → If yes, collect tax

Services typically exempt from sales tax include:

• Professional services (legal, accounting)
• Personal services (haircuts, fitness training)
• Medical services

Products typically subject to sales tax include:

• Tangible personal property
• Prepared food
• Software as a Service (SaaS) products 

Payroll Taxes 

If you have employees in New York, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register through the New York State Department of Labor
• Rate is 4.1% for new employers (2.1% to 9.9% afterwards) 
• Due quarterly 

Withholding Tax 

• Register through the New York Business Express portal
• Use NYS withholding tax tables to determine rate
• File using New York Form NYS-45 
• Due monthly, quarterly, or annually (filing frequency assigned by the state)

Annual Filing Fee

LLCs based in the State of New York are required to submit an annual filing fee in order to keep themselves in good standing with the state.

• Due March 15 each year
• Fee ranges from $25 to $4,500 (based on New York-source gross income)
• Filed using Form IT-204-LL
• Not applicable to LLCs taxed as C corps or S corps 

Biennial Statement Filing

While not a tax, your New York LLC must file a biennial statement:

• Due every two years by the end of your LLC’s formation month
• $9 filing fee
• File online with the New York Department of State
• Failure to file may lead to administrative dissolution of your LLC

Calendar Alert: Set a reminder to ensure you don’t miss this easy but required filing.

Local Tax Considerations

NYC Unincorporated Business Tax

If your LLC operates or earns income from clients and/or projects in New York City and is not taxed as a corporation, it may be subject to the Unincorporated Business Tax (UBT).

• Tax rate: 4% on net income from business activities in NYC
• Filed using Form NYC-202
• Due March 15, 2025
• LLCs taxed as S Corps or C Corps are exempt from UBT

Property Taxes

If your LLC owns real property in New York:

• Rates are set locally and vary by municipality
• Assessed annually based on the property’s estimated market value
• May qualify for exemptions depending on property use and local programs
• New York does not impose a personal property tax on business equipment

Tax Calendar and Filing Tips

Key Deadlines for New York LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Fourth quarter New York UI tax due 
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter federal payroll tax payment due 

March:

• March 15: New York Pass-through entity tax returns or election due
• March 15: NYC Unincorporated Business Tax return due
• March 15: New York annual filing fee due

April:

• April 15: Personal tax returns due
• April 15: Federal income and self-employment tax returns due

• April 15: First quarter estimated tax payment due 
• April 30: First quarter New York UI tax due 
• April 30: First quarter federal payroll tax payment due

June: 

• June 16: Second quarter estimated tax due 

July: 

• July 31: Second quarter New York UI tax due 
• July 31: Second quarter federal payroll tax payment due 

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Third quarter New York UI tax due
• October 31: Third quarter federal payroll tax payment due

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for New York LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Pass-Through Entity Tax Election

Consider electing New York’s Pass-Through Entity Tax if:

• You’re affected by the $10,000 SALT deduction cap
• Your LLC earns significant income 
• All members agree to the election

Business Expense Deductions

Common deductions New York LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

New York Tax Forms

• Form IT-201: New York State Income Tax Return
• Form CT-3: New York Corporate Franchise TaxReturn
• Form ST-100: New York Sales and Use Tax Return

Helpful Resources

• New York Department of State
• New York Business Express
• New York State Department of Taxation and Finance
• Internal Revenue Service