New York City Taxes

[MMM]

Sorry if this question is too specific but would be so appreciative if anyone knows the answer. My husband is self -employed (Project Manager in Retail Strategy and Operations) and we live in NYC. He made approximately $216,000 after expenses in 2022. Does anyone know if he has to pay the UBT (Unincorporated Business Tax) and MCTMT (Metropolitan Commuter Transportation Mobility Tax)?

[Larry Ragman]

Bump. Looks like yes to the former, though there are offsets and no to the latter.

[White.Beard.Doc]

Here is your answer on MCTMT:


Who has to pay MCTMT?


Employers, not employees, are required to pay MCTMT. Employers pay MCTMT only when their payroll expense per quarter is in excess of $312,500. Please refer to the New York State Department of Taxation and Finance for more information.

[MarkNYC]

NYC Unincorporated Business Tax (UBT) - Yes, he would be subject to UBT since his gross self-employment income exceeded $95K. It gets reported and paid on a separate tax return Form NYC-202S.

Metropolitan Commuter Transportation Mobility Tax (MCTMT) - Yes, he would be subject to the MCTMT since his net earnings from self-employment within the relevant district exceeded $50K. See the instructions to line 54a of NY Resident Income Tax Return Form IT-201.

[MMM]

NYC Unincorporated Business Tax (UBT) - Yes, he would be subject to UBT since his gross self-employment income exceeded $95K. It gets reported and paid on a separate tax return Form NYC-202S.

Metropolitan Commuter Transportation Mobility Tax (MCTMT) - Yes, he would be subject to the MCTMT since his net earnings from self-employment within the relevant district exceeded $50K. See the instructions to line 54a of NY Resident Income Tax Return Form IT-201.

Thanks Mark.....my husband has been self-employed since July 2019. We were unaware of this tax. We used accountants in 2019 and 2020 and I guess even they were unaware since they didn't have him pay it. I did TurboTax for 2021 and asked the live help and their opinion was that he did not need to pay UBT or MCTMT.

Since we are aware now, we will pay it for 2022. What should we do about the last few years? I looked back at the returns and it looks like he had to pay MCTMT for 2019, 2020, and 2021 and that he had to pay UBT for 2020 and 2021.

Thanks for your expertise

[MarkNYC]

Thanks Mark.....my husband has been self-employed since July 2019. We were unaware of this tax. We used accountants in 2019 and 2020 and I guess even they were unaware since they didn't have him pay it. I did TurboTax for 2021 and asked the live help and their opinion was that he did not need to pay UBT or MCTMT.

Since we are aware now, we will pay it for 2022. What should we do about the last few years? I looked back at the returns and it looks like he had to pay MCTMT for 2019, 2020, and 2021 and that he had to pay UBT for 2020 and 2021.

Thanks for your expertise

You can either (1) wait until NY detects the omissions and contacts you, which may or may not happen, or (2) voluntarily file amended NY income tax returns and delinquent original UBT returns to report and pay the additional tax.

Any additional tax due will also result in interest, and perhaps penalties.

[MMM]

You can either (1) wait until NY detects the omissions and contacts you, which may or may not happen, or (2) voluntarily file amended NY income tax returns and delinquent original UBT returns to report and pay the additional tax.

Any additional tax due will also result in interest, and perhaps penalties.

Thanks Mark! You seem to know a lot about NYC Taxes! Are you an accountant in NYC? Also, how likely is it that NYC would detect this error? Do you know if they audit a lot or plan to start auditing a lot?

[jfoxcpacfp]

Fwiw, yes, NYC is likely to catch this, NY as a whole is pretty aggressive, but it might not be for a couple of years (although, even in the pandemic, govt’s seemed to be right on top of penalties). You may be able to get the penalties abated by self-reporting, but you’ll need to write a mea culpa letter and explain that your CPAs didn’t catch this when you filed during those years.

[MMM]

Fwiw, yes, NYC is likely to catch this, NY as a whole is pretty aggressive, but it might not be for a couple of years (although, even in the pandemic, govt’s seemed to be right on top of penalties). You may be able to get the penalties abated by self-reporting, but you’ll need to write a mea culpa letter and explain that your CPAs didn’t catch this when you filed during those years.

Ha Ha.....thanks jfoxcpacfp