New York City does NOT recognize federal (IRS Form 2553) or New York State (Form CT-6 under NY Tax Law § 660) S-corporation pass-through status for city entity-level taxation. Any corporation or LLC electing S-corp status that does business, employs capital, owns or leases property, or maintains an office in the five boroughs (Manhattan, Brooklyn, Queens, the Bronx, or Staten Island) is taxed as a corporation at the city level under the NYC General Corporation Tax (GCT, NYC Admin. Code Title 11, Chapter 6, Subchapter 2). Under the GCT, an S-corp pays the highest of four tax bases: (1) 8.85% on allocated NYC entire net income; (2) the alternative income-plus-compensation base—8.85% on 15% of net income plus compensation paid to officers and >5% shareholders (after a $40,000 statutory deduction); (3) 0.15% on allocated business and investment capital (capped at $1,000,000); or (4) a fixed dollar minimum tax of $25 to $5,000 based on NYC gross receipts. By contrast, a New York LLC taxed as a partnership or sole proprietorship in NYC is subject to the 4% NYC Unincorporated Business Tax (UBT, NYC Admin. Code Title 11, Chapter 5), which requires a filing only when gross income exceeds $95,000 and provides a full credit at or below $3,400 of tax (~$100,000 net income after the $5,000 exemption and up to $10,000 per-partner deduction) and a partial credit up to $5,400 of tax (~$150,000 net income).
Official sourceOfficial sourceOctober 2026 · statutory schedule supplied for this site; confirm current official instructions
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Why Federal Form 2553 + NYS Form CT-6 Do Not Stop NYC GCT
Even after filing IRS Form 2553 and NYS Form CT-6 (NY Tax Law § 660), NYC Admin. Code Title 11, Ch. 6, Subch. 2 taxes federal/NYS S-corporations under the General Corporation Tax (GCT) using Forms NYC-3L, NYC-4S, or NYC-4S-EZ (unlike C-corps, which moved to the Business Corporation Tax in 2015 under Subch. 3-A).
Official sourceWatch the Officer & >5% Shareholder Salary Add-Back Trap
Paying out all S-corp profit as W-2 officer salary does not eliminate NYC GCT: the alternative income-plus-compensation base adds back 100% of officer and >5% shareholder compensation to net income (minus $40,000), multiplies by 15%, and taxes that base at 8.85% (an effective ~1.3275% floor on owner W-2 pay above the exemption).
Official sourceCompare NYC S-Corp (8.85% GCT) vs. Default LLC (4% UBT + IT-204-LL)
Inside the five boroughs, the 15.3% federal self-employment tax savings on S-corp distributions can be outweighed by the 8.85% NYC GCT and loss of the $100k–$150k UBT credit zone—model both paths and review the March 15 NYS PTET (Art. 24-A) and NYC PTET (Art. 24-B) elections with a CPA.
Official sourceYour preparation checklist
- Determine whether your business has NYC nexus inside Manhattan, Brooklyn, Queens, the Bronx, or Staten Island (office, employees, property, or receipts).
- Compare total tax under a default NY LLC (4% NYC UBT with $100k–$150k credit zone + NYS Form IT-204-LL due March 15) against an S-Corp (8.85% NYC GCT + NYS Form CT-3-S fixed dollar minimum).
- If electing S-corp status for New York State, ensure all shareholders sign and file NYS Form CT-6 within 2 months and 15 days of the start of the tax year (March 15 for calendar-year entities).
- Model the NYC GCT alternative income-plus-compensation base (15% × [Net Income + Officer/>5% Shareholder Compensation − $40,000] × 8.85%) before setting W-2 officer salary.
- Calendar March 15 for calendar-year NYC GCT returns (Form NYC-3L, NYC-4S, or NYC-4S-EZ), NYS Form CT-3-S, and annual NYS/NYC PTET elections.
- Maintain separate corporate minutes, stock ledger, or LLC Operating Agreement (NY LLCL § 417) and complete NY LLCL § 206 newspaper publication within 120 days if formed as an LLC.
NYC General Corporation Tax (8.85% GCT) vs. 4% UBT Comparison
NY IT-204-LL, CT-6 & NYC Tax Comparison
$25 Flat Annual Fee — Single-Member Disregarded LLCs Are Capped at $25 Regardless of Gross Income Under NY Tax Law § 658(c)(3)
March 15 IT-204-LL fee: $25.00
Optional $99 filing service: $124.00 total. No extension of time to file IT-204-LL.
Calendar-year reminder: March 15 election / return deadlines. NY CT-6 within two months and 15 days of effective tax-year start. NY PTET Article 24-A and NYC PTET Article 24-B are annual elections; check current federal SALT limits and eligibility, not an assumed universal $10,000 cap.
Corp USA is not a law firm and does not provide legal advice.
Supplied 2026 schedule; estimates, not a quote or tax advice. NY DOS · NY DTF
Keep the requirements separate.
| Requirement | Verified detail / confirmation needed | Official authority |
|---|---|---|
| NYC General Corporation Tax (GCT) — S-Corps | NYC Admin. Code Title 11, Ch. 6, Subch. 2 · Applies to federal/NYS S-corporations (and LLCs taxed as S-corps) operating in the five boroughs · Pays highest of 4 bases via Form NYC-3L, NYC-4S, or NYC-4S-EZ by March 15. | Official source |
| GCT Base 1 & Base 2 (8.85% Net Income vs. Officer Salary Add-Back) | Base 1: 8.85% of allocated NYC entire net income · Base 2: 8.85% of 15% × (Net Income + 100% of officer & >5% shareholder compensation − $40,000 statutory exemption). | Official source |
| GCT Base 3 & Base 4 (Capital Base & Fixed Dollar Minimum) | Base 3: 0.15% of allocated business and investment capital (capped at $1,000,000) · Base 4: Fixed Dollar Minimum of $25 to $5,000 based on NYC gross receipts ($25 under $100k; $75 for $100k–$250k; $175 for $250k–$500k; $500 for $500k–$1M; $1,500 for $1M–$5M; $3,500 for $5M–$25M; $5,000 over $25M) · Small business credit phases out between $300k and $500k allocated net income. | Official source |
| NYC Unincorporated Business Tax (UBT) — Default LLCs | NYC Admin. Code Title 11, Ch. 5 · 4% tax on NYC unincorporated net income (Forms NYC-202 / NYC-204) · $95,000 gross income filing threshold · $5,000 specific exemption + up to $10,000 per active member/partner reasonable compensation deduction · 100% credit at ≤$3,400 tax (~$100k net income) phasing out at $5,400 tax (~$150k net income). | Official source |
| Separate New York State Form CT-6 Election | NY Tax Law § 660(a) — $0 state + $199 dual election service ($149 standalone CT-6) · Required so NYS recognizes S status under Article 9-A (Form CT-3-S fixed dollar minimum) instead of taxing the entity as a NYS C-corp. | Official source |
| NYS & NYC Pass-Through Entity Tax (PTET) | NY Tax Law Art. 24-A (NYS PTET) & Art. 24-B (NYC PTET) · Annual online election due March 15 on NY DTF Business Online Services · NYC PTET is separate from and does not eliminate NYC GCT for S-corporations. | Official source |
Carry the decision forward.
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Before your next step
No. While the IRS (Form 2553) and New York State (Form CT-6 under NY Tax Law § 660) recognize S-corporation pass-through status, New York City treats S-corporations—including LLCs that elect S-corp tax treatment—as taxable corporations subject to the 8.85% NYC General Corporation Tax (GCT) under NYC Admin. Code Title 11, Chapter 6, Subchapter 2.
Official sourceNo. Under the NYC GCT alternative income-plus-compensation base, the city adds back 100% of compensation paid to officers and shareholders owning more than 5% of stock to entire net income, subtracts a $40,000 exemption, takes 15% of the result, and taxes it at 8.85%—producing an effective ~1.3275% tax on owner compensation above the exemption if that exceeds the other bases.
Official sourceIt depends on net income, owner W-2 compensation, and receipts allocation inside vs. outside the five boroughs. A default LLC in NYC pays the 4% Unincorporated Business Tax (UBT)—which is $0 up to roughly $100,000 of net income thanks to the $3,400 UBT credit and $5,000/$10,000 deductions—whereas an NYC S-Corp faces the 8.85% GCT from dollar one (unless the small-business credit or non-NYC receipts allocation applies). Always model both with a NYC CPA before filing Form 2553 and Form CT-6.
Official sourceIn 2015, NYC enacted the Business Corporation Tax (BCT, Subchapter 3-A) for C-corporations, aligning city rules with New York State's corporate tax reform. However, federal and NYS S-corporations were left under the older NYC General Corporation Tax (GCT, Subchapter 2), which uses Forms NYC-3L, NYC-4S, or NYC-4S-EZ.
Official sourceFor calendar-year S-corporations, the annual NYC General Corporation Tax return (Form NYC-3L, NYC-4S, or NYC-4S-EZ) and the NYS S-Corporation Franchise Tax return (Form CT-3-S) are due March 15. To elect New York S-corp status for a calendar year, Form CT-6 must also be filed by March 15 (within 2 months and 15 days of the beginning of the tax year).
Official sourceGenerally no. The NYC General Corporation Tax applies only to corporations doing business, employing capital, owning or leasing property, or maintaining an office in New York City's five boroughs. A New York S-Corp operating solely outside NYC files NYS Form CT-6 and annual NYS Form CT-3-S without owing NYC GCT.
Official source