If your business operates in New York State, or especially in New York City, Q4 is a crucial time to revisit your tax strategy. Several updates passed this year change how businesses are taxed, who qualifies, and what deductions or credits might now be in play.

Some changes offer savings opportunities. Others expand the scope of compliance. Either way, getting a handle on them before December could mean fewer surprises and a better position heading into next year.

Let’s break it down.

1. NYC Corporate Nexus Thresholds Are Changing

One of the most impactful updates affects when a business is considered subject to NYC corporate taxes, even if you don’t have a physical presence in the city.

Here’s what’s new: Starting in 2024 (with filings due in 2025), if your business brings in $1.128 million or more in revenue from NYC sources, you may be subject to NYC’s Business Corporation Tax (BCT). That threshold increases to $11.28 million for companies that are part of a unitary group (i.e. affiliated businesses with shared operations).

This means:

• You don’t need an office in NYC to owe city tax
  
  
• Doing enough business with NYC clients could trigger BCT obligations
  
  
• This aligns NYC’s rules more closely with New York State’s economic nexus standards
  
  

If you’re unsure whether your receipts qualify as “NYC-sourced,” now’s the time to check. This shift could catch some out-of-state businesses off guard.

2. New York State’s PTET Deadline Is Approaching

For pass-through entities like S corps or partnerships, New York’s Pass-Through Entity Tax (PTET) election continues to be a valuable workaround for the federal SALT deduction cap.

But the clock is ticking.

• To elect into PTET for 2024, businesses must file by March 15, 2025
  
  
• Payments for 2024 liability must be made by December 31, 2024 to claim the deduction on 2024 returns
  
  

Why this matters: Missing the deadline could mean losing out on a sizable deduction, especially for businesses with high net income. And if you operate in NYC, don’t forget that there’s a separate PTET election for the city, which requires its own paperwork and payments.

If you’ve elected PTET in the past but haven’t reviewed this year’s income or timing, Q4 is the moment to do it.

3. NYS Expands Key Credits

Several business tax credits have been expanded or clarified this year, especially for smaller employers.

A few to note:

• Small Business Subtraction Modification: The eligibility threshold for the subtraction has increased, which may allow more businesses to reduce their NYS income.
  
  
• Employment Incentive Credit: Businesses that hired in designated areas or met certain criteria in 2024 may qualify. It’s worth reviewing wage and headcount data now to prepare documentation.
  
  
• New York Youth Jobs Program: Still active and offering credits for hiring eligible youth employees. You must apply and be certified in advance. Don’t wait until tax season!
  
  

Credits like these often get overlooked but can meaningfully reduce what you owe. Check with your accountant to see what applies based on headcount, industry, or capital investment.

4. Compliance Rules Continue to Tighten

Beyond revenue thresholds, recordkeeping and reporting expectations are rising, especially for entities operating in multiple jurisdictions.

A few trends to be aware of:

• New York continues to audit apportionment aggressively, particularly for service businesses using market-based sourcing.
  
  
• NYC’s BCT rules are increasingly harmonized with state rules, which helps with consistency, but means any misunderstanding at the state level can now cause double trouble.
  
  
• Combined reporting (for related corporations) is still required in many cases. If your business structure includes multiple entities, it’s worth reviewing whether your filings reflect that properly.
  
  

The short version? If you’ve had minor issues in past years, expect them to get more scrutiny going forward.

What to Do Before Year-End

Here’s a quick checklist for New York businesses to wrap up Q4 with confidence:

• Check your NYC receipts: If your total crosses $1.1M, you may need to file NYC BCT—even without an NYC address.
  
  
• Review PTET status: Are your elections and payments in order for both state and city?
  
  
• Explore tax credits: Revisit payroll, hiring, and capital expenses to see if you qualify for available incentives.
  
  
• Audit your apportionment methods: Especially important for service-based or remote businesses billing NYC clients.
  
  
• Work with a pro: This year’s changes aren’t just technical, they could impact your liability in real dollars. A tax advisor familiar with NY and NYC compliance can help you navigate it cleanly.
  
  

Final Thought

New York’s tax code is always evolving, but this year’s changes in nexus thresholds and deduction rules have real implications for businesses, especially those operating across city and state lines.

If your Q4 is already packed with planning, hiring, or expansion, don’t let these updates slip by. A quick review now could save you time, stress, and money come filing season.

And if you need help making sense of it all, The Holtz Group is here. We work with businesses throughout New York to stay compliant and strategic, not just reactive.

Let’s make sure your year-end plan is built on solid ground.