Form Ct-6-I July 2006, Instructions printable pdf download

CT-6-I

New York State Department of Taxation and Finance

Instructions for Form CT-6

(7/06)

Election by a Federal S Corporation to be Treated

As a New York S Corporation

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Changes for 2006

A qualified subchapter S subsidiary (QSSS) may not make the

New York S election. Only the parent corporation of the QSSS

Entering dates — Unless you are specifically directed to use a

can make the New York S election.

different format, enter dates in the mm-dd-yy format (using dashes

and not slashes).

A federal S corporation that is not taxable in New York may make a New

General information

York S election if it is the parent of a QSSS which is taxable in

New York, if neither the parent nor the QSSS is an excluded

A federal S corporation may elect to be taxed as a New York

corporation. If the parent does not make a New York S election,

S corporation (Tax Law section 660(a)) by filing Form CT‑6.

the QSSS will be taxed as a New York C corporation. See

TSB‑M‑97(6)C, Important Notice: Attention Shareholders of S Corps,

Once the NYS Tax Department has approved the filing of

for details regarding the treatment of QSSS’s in New York State.

Form CT‑6:

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The corporation will be treated as a New York S corporation

When to make the election

under Article 9‑A, section 208.1‑A or Article 32, section 1450(f),

of the Tax Law and file its New York S corporation franchise tax

To be effective for the tax year, file Form CT‑6 at any time during

return on Form CT‑3‑S or Form CT‑32‑S.

the preceding tax year, or on or before the fifteenth day of the third

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month of the tax year to which the election will apply. An election

Each individual shareholder of the New York S corporation

made no later than the fifteenth day of the third month after the

will include his or her share of the New York S corporation’s

beginning of a tax year that is less than two and a half months long

items of income, loss and deductions under Article 22,

will be considered timely filed for that tax year. However, an election

section 660, of the Tax Law and file an individual income

made on or before the fifteenth day of the third month of the tax

tax return on Form IT‑201, Resident Income Tax Return, or

year to which the election will apply, will not be effective until the

Form IT‑203, Nonresident and Part-Year Resident Income Tax

following tax year if:

Return.

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A shareholder that is a 501(c)(3) organization will include its

a) The corporation did not qualify as a federal S corporation,

share of the New York S corporation’s items of income, loss,

under section 1361(b) of the Internal Revenue Code (IRC) on

and deductions under Article 13, section 292(a)(5) of the Tax

one or more days of the tax year prior to the date the election

Law and file its tax return on Form CT‑13, Unrelated Business

was made; or

Income Tax Return.

b) One or more of the shareholders who held stock before the

For additional information, see sections 660 and 292(a)(5) of

date of election did not consent to the corporation being a

the New York State Tax Law and Publication 35, New York Tax

New York S corporation.

Treatment of S Corporations and Their Shareholders.

If the corporation is organized within New York State and anticipates

Corporate franchise tax

being a New York State S corporation for its first tax year, it must file

A federal S corporation that elects to be a New York S corporation

Form CT‑6 on or before the fifteenth day of the third month following

must file Form CT‑3‑S or CT‑32‑S within 2½ months after the end of

the effective date of its certificate of incorporation.

each tax year.

If the corporation is organized outside New York State, begins to

Penalty for late filing

do business in New York State, and anticipates being a New York

S corporation for its first tax year, it must file CT‑6 on or before the

If the New York S corporation fails to file Form CT‑3‑S or CT‑32‑S,

fifteenth day of the third month following the date it began doing

or fails to include the required shareholder information, it must pay

business in New York State.

a penalty of $50 per shareholder per month or fraction of a month

that the failure continues, for up to five months. Any individual or

Examples:

Article 13 taxpayer who was a shareholder during any part of the

year shall be included in the shareholder information.

A corporation was a New York C corporation for the tax year

1/1/05 - 12/31/05. The corporation anticipates being a New York

Who may elect

S corporation for the tax year 1/1/06 - 12/31/06. The corporation

To elect to treat a corporation as a New York S corporation, you

must file Form CT-6 on or before March 15, 2006, to be a New York

must meet the following requirements:

S corporation for the tax year 1/1/06 - 12/31/06.

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The corporation must be a federal S corporation. If your federal

A corporation’s effective date of incorporation in New York

election is pending, file your New York election and indicate

State is 6/13/06. The corporation anticipates being a New

that your federal election is pending. When you receive federal

York S corporation for its first tax year 6/13/06 - 12/31/06. The

approval, forward a copy to the Tax Department at the address

corporation must file Form CT-6 on or before August 28, 2006, to be

listed under Where to file on page 2 of these instructions.

a New York S corporation for the tax year 6/13/06 - 12/31/06.

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The corporation must be a general business corporation

taxable under Article 9‑A or a banking corporation taxable

A corporation’s date of incorporation outside New York State is

under Article 32 of the New York State Tax Law. If a corporation

2/6/06. The corporation anticipates being a New York S corporation

is taxable under Article 9 or 33 of the Tax Law, it cannot elect

for its first tax year 2/6/06 - 12/31/06. The corporation began

to be a New York S corporation. It is considered an excluded

doing business in New York State on 3/23/06. The corporation

corporation.

must file Form CT-6 on or before June 8, 2006, to be a New York

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S corporation for the New York tax year 3/23/06 - 12/31/06.

All of the corporation’s shareholders must consent to the

New York S election.

Form Ct-6-I July 2006, Instructions

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