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New York City Mobility Tax Group Estimated Tax Payments and Group Returns for Partners

The New York State Department of Taxation and Finance has released TSB-M-09(2) MCTMT that provides guidance for resident and nonresident partners and members of partnerships and limited liability companies. The TSB-M explains that a partnership that is doing business within the Metropolitan Commuter Transportation District may be granted approval to make group estimated metropolitan commuter transportation mobility tax (MCTMT) payments and file a group MCTMT return on behalf of its qualified New York State resident and nonresident partners or members. Note the SEPTEMBER 15TH deadline below. 

To view the entire document please click on the link below: http://www.tax.state.ny.us/pdf/memos/mta_mobility/m09_2mctmt.pdf 

If a partnership (including an LLC treated as a partnership) is doing business within the MCTD, each partner will be subject to the MCTMT based on his or her share of the partnership's net earnings from self-employment allocated to the MCTD if his or her net earnings from self-employment allocated to the MCTD is more than $10,000 for the tax year. The partnership must provide either the actual amount of net earnings from self-employment allocated to the MCTD or the allocation percentage to each partner so that the partner can determine the amount of the MCTMT due. To determine the amount of net earnings from self-employment allocated to the MCTD or the allocation percentage, see the methods described in Allocation of net earnings from self-employment on page 6 of this document: http://www.tax.state.ny.us/pdf/memos/mta_mobility/m09_1mctmt.pdf 

For convenience, we prepared the following summary of TSB-M-09(2) MCTMT 

Partnerships and LLC's may elect to file group MCTMT returns and estimated payments on behalf of their NYS resident and non-resident partners/members.

  • The application to elect to file a group return is required to be filed 45 days prior to the return due date.
  • For the initial filing this means the application to elect group filing is September 15, 2009.
  • For subsequent years the election must be filed no later than March 15thof the applicable tax year.
  • The application for permission to file the group MCTMT return is Form MTA-599.
  • An approval to file on a group basis will remain in effect unless it is revoked. Annual approval is not required.
  • The group estimated MCTMT payments are filed using Form MTA-5, Estimated Metropolitan Commuter Transportation Mobility Tax Payment Voucher.
  • Special rule for tax year 2009 – The initial estimated MCTMT payment is due by November 2, 2009, (due to October 31, 2009, falling on a Saturday) and must include each partner's total estimated tax due for the period January 1, 2009, through September 30, 2009.
  • The group return must be filed on Form MTA-505, Metropolitan Commuter Transportation Mobility Tax Group Return for Partners, no later than April 30 following the close of the tax year.
  • An extension of time to file the group MCTMT return may be requested using Form MTA-7, Application for Automatic Six-Month Extension of Time to File a Metropolitan Commuter Transportation Mobility Tax Return.

Initial Year Penalties 

For the partner to avoid a penalty for underpayment of the MCTMT for the tax year, the partner's total amount of MCTMT payment(s) must be:

  • at least 90% (66 2/3% for farmers and fisherman) of the amount of the partner's MCTMT due for the tax year; or
  • 100% of the MCTMT reported for the partner for the prior tax year (110% of that amount if the partner is not a farmer or a fisherman and the partner's net earnings from self-employment allocated to the MCTD for the prior year is more than $150,000). However, this rule does not apply for tax year 2009.

There will be no penalty for the underpayment of estimated tax for periods prior to October 31, 2009, provided the partner's total estimated tax due for the period January 1, 2009, through September 30, 2009, is included in the October 31 payment.

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