NY - State City Taxes

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New York taxes business income at both the state and city level. If a business is located in New York City then an additional city tax is figured on the appropriate city forms. The city tax is different than the state tax and they are not dependent on each other.

For an individual return, an unincorporated New York City business would report its income on Form NYC-202 and the city tax is calculated on this form based on business allocation percentages from Form NYC-202, Schedule C, Part 3. The same business income is also taxed on the New York form IT-201 which does not include the tax from New York City. The state tax does not include a factor method while the city method does for individual returns.

For a corporate return, the New York City corporation would report its income on NYC-3L or NYC-4S and the city tax would be calculated on that form based on business allocation percentages calculated on Form NYC-3L, Schedule H. The same corporate income is also taxed on Form CT-3 or CT-4 and the tax for the state does not include the tax from New York City. For corporations, a factor method is used to allocate business income at both the state and city levels.

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