New York corporate franchise tax is 6.5% (7.25% for large corporations). Does not conform to federal bonus depreciation. NYC adds additional business taxes.
Key Planning Insight:
New York City residents face a combined state + city income tax rate of up to 14.776% — the highest in the nation. The NY PTET election is one of the most valuable in the country. Residency planning (leaving NY) is a major strategy for high earners.
New York-Specific Tax Strategies
These strategies are especially powerful or unique in New York. Click any strategy to learn more.
New York's PTET election allows pass-through entities to pay state income tax at the entity level. Given NY's top rate of 10.9% (plus NYC's additional tax), this is one of the most valuable PTET elections in the country — potentially saving NYC business owners over $15,000/year.
New York's combined state and city tax rates (up to 14.8% in NYC) make residency planning critical. Strategies include the 183-day rule, establishing domicile in a no-tax state, the "convenience of the employer" rule for remote workers, and careful documentation of physical presence.
The Qualified Small Business Stock (QSBS) exclusion under IRC §1202 allows founders and early investors to exclude up to 100% of capital gains (up to $10M or 10x basis) when selling stock in a qualifying C-Corp held for 5+ years. This is one of the most powerful tax benefits available to startup founders and angel investors.
Section 179 allows businesses to deduct the full purchase price of qualifying equipment, vehicles, and software in the year of purchase rather than depreciating over time. The 2026 federal limit is over $1 million. Some states cap or limit Section 179 conformity — check your state rules.
Qualified Opportunity Zone (QOZ) investments allow you to defer and reduce capital gains taxes by investing in designated economically distressed areas. Gains invested in a Qualified Opportunity Fund (QOF) are deferred until 2026, and if held 10+ years, any appreciation on the QOZ investment is tax-free.
New York's START-UP NY program offers tax-free zones for qualifying new and expanding businesses affiliated with eligible universities and colleges. Approved businesses pay zero state taxes for 10 years — including income tax, business tax, sales tax, and property tax.
Choosing the right business structure is the single biggest tax decision you'll make. Here's what New York LLC and S-Corp owners need to know.
New York LLC Formation
New York LLCs are taxed as pass-through entities by default. All profits flow to your personal return and are taxed at 10.9% (+ NYC tax up to 3.876%). Electing S-Corp status can significantly reduce your self-employment tax burden.
LLC vs. S-Corp in New York
New York offers a Pass-Through Entity Tax (PTET) election — a major advantage for LLC and S-Corp owners. By paying state income tax at the entity level, you bypass the $10,000 federal SALT deduction cap and deduct the full state tax bill on your federal return.
Top LLC Write-Offs in New York
New York LLC owners can deduct: business expenses (IRC §162), home office (IRC §280A), vehicle mileage (IRC §179), Section 179 equipment expensing, retirement contributions (Solo 401k or SEP-IRA), health insurance premiums, and business meals. Note: New York does not conform to federal bonus depreciation — an add-back on your state return may be required.
New York Business Tax Note
New York corporate franchise tax is 6.5% (7.25% for large corporations). Does not conform to federal bonus depreciation. NYC adds additional business taxes.
These federal strategies apply to New York residents and business owners. Click any strategy to see full details, savings estimates, and eligibility requirements.
Common questions about New York LLC taxes, S-Corp elections, and business write-offs — answered by Uncle Kam's tax advisors.
New York's top marginal income tax rate is 10.9% (+ NYC tax up to 3.876%). Business owners and self-employed individuals pay this rate on their net business income. Strategies like the S-Corp election, pass-through entity tax (PTET) election, and maximizing deductions can significantly reduce your effective New York tax rate.
The most powerful write-offs for New York LLC owners include: the S-Corp election to reduce self-employment taxes, Section 179 and bonus depreciation for equipment and real estate, the home office deduction, vehicle and mileage deductions, Solo 401(k) or SEP-IRA contributions, and business meals and travel. New York-specific strategies like the PTET election and state-specific credits can add further savings.
Yes. New York offers a pass-through entity tax election that allows S-Corps and partnerships to pay state income tax at the entity level. This is a powerful SALT workaround that lets business owners deduct state taxes on their federal return, bypassing the $10,000 SALT cap. Uncle Kam's tax advisors can help you determine if the New York PTET election is right for your business.
New York does not fully conform to federal bonus depreciation rules. You may need to add back bonus depreciation on your New York state return and depreciate assets over a longer schedule. However, Section 179 expensing may still be available up to New York's state cap. A tax advisor can help you navigate this.
For most New York business owners earning over $60,000 in net profit, electing S-Corp status can save $5,000–$20,000 per year in self-employment taxes. The right choice depends on your income level, New York's franchise or minimum tax requirements, and your business structure. Uncle Kam's advisors specialize in New York entity structuring — book a free call to get a personalized recommendation.
Self-employed individuals in New York can reduce state taxes by: maximizing business deductions (home office, vehicle, equipment), contributing to a Solo 401(k) or SEP-IRA, electing S-Corp status to reduce self-employment tax, using the PTET election if available, and timing income and deductions strategically. A New York-based tax strategy session with Uncle Kam can identify your biggest opportunities.
Real estate investors in New York benefit most from cost segregation studies (accelerating depreciation on commercial and rental properties), the 1031 exchange (deferring capital gains on property sales), bonus depreciation (if New York conforms), the short-term rental loophole, and real estate professional status (REPS). New York's specific tax rules can significantly impact your real estate ROI — get a free strategy review from Uncle Kam.
