Businesses who operate in particular parts of New York City and are charged the New York State business corporation tax or the New York City general corporation tax are liable to the Metropolitan Transportation Authority (MTA) surcharge. The surcharge is intended to assist in financing the MTA’s transportation network, which consists of commuter rail lines, buses, and subways. Businesses that satisfy the MTA surcharge requirements must pay 0.34% of the portion of their New York State taxable income designated for the MTA region. The five boroughs of New York City and seven neighboring counties are all part of the MTA region. The MTA surcharge still applies to S corporations, pass-through organizations that do not pay federal income tax. S corporations do not, however, have to pay quarterly taxes like C businesses do because they do not have to pay federal income taxes. An S corporation’s earnings are instead passed through to its owners, who are then in charge of paying taxes on their own personal tax returns. The option to be taxed as a S corporation is available to individuals who incorporate their businesses. By doing this, they can enjoy the advantages of incorporation, such as limited liability, while continuing to be taxed as pass-through entities. All firms in New York State that owe the state’s franchise tax are required to submit a New York State corporate tax return. All C corporations and S corporations with revenue coming from New York State are included in this. S corporations are exempt from filing a New York State corporate tax return if their income is not sourced in the state.
You can consult a tax expert or utilize the online resources provided by the New York State Department of Taxation and Finance to assess your tax obligations if you are unsure whether your company must pay corporation tax or file a corporate tax return in New York State.
In conclusion, the MTA surcharge must be paid by companies that operate in the MTA region and are subject to the New York State business corporation tax or the New York City general corporation tax. This includes pass-through businesses like S corporations, which are nevertheless charged the premium. An S corporation tax treatment option is available to individuals who incorporate their businesses. All businesses subject to the state’s franchise tax, including S corporations with New York State-sourced income, are required to file a New York State corporate tax return. If you’re unsure about your tax requirements, get advice from a tax expert or consult the New York State Department of Taxation and Finance’s online tools.
