Instructions For Form Nyc-204 -Partnership Return

NEW YORK CITY DEPARTMENT OF FINANCE

Instructions for Form NYC-204

Finance

2010

Partnership Return

i g h l i g h t s

of Recent Tax Law Changes for Partnerships (including Limited Liability Companies)

Local Law 67 of 2009 added section 11-503(o) to the Ad. Code, which provides a new biotechnol-

ogy credit for tax years 2010 through 2012 to certain qualified emerging technology companies for cer-

tain costs and expenses incurred.

Chapter 201 of the Laws of 2009 provides for a 10 year phase-in of single factor allocation beginning

in 2009. For taxable years beginning in 2010, for taxpayers using the three factor formula, the busi-

ness allocation percentage will be composed of 27% of the New York City property percentage, 27%

of the New York City wages percentage and 46% of the New York City gross income percentage.

Starting with taxable years beginning in 2009, taxpayers with unincorporated business gross income,

determined without any deduction for the cost of goods sold or services performed, of $95,000 or less

are not required to file an Unincorporated Business Tax Return. See Chapter 183 of the Laws of

2009.

Starting with taxable years beginning in 2009, if the tax is $3,400 or less, a tax credit is allowed for

the entire amount of the tax. If the tax is $5,400 or more, no credit is allowed. The credit is gradually

phased out where the tax is over $3,400 but less than $5,400. See Chapter 183 of the Laws of 2009.

For taxable years beginning after 2008, taxpayers are not required to file a declaration of estimated

tax if the estimated tax can reasonably be expected to be $3,400 or less. See Chapter 183 of the Laws

of 2009.

Beginning in 2009, certain receipts for services performed by registered securities or commodities

brokers will be sourced based on the customer mailing addresses. See section 108 of Chapter 201 of

the Laws of 2009 and the instructions to Schedule E.

For purposes of the New York City Unincorporated Business Tax, General Corporation Tax and Bank-

ing Corporation Tax, the City has “decoupled” from the Federal bonus depreciation allowed under the

Economic Stimulus Act of 2008 and the American Recovery and Reinvestment Act of 2009, except

with respect to the depreciation deductions allowed with respect to “qualified New York liberty zone

property” and “qualified property” placed in service in the Resurgence Zone (generally the area in the

borough of Manhattan south of Houston Street and north of Canal Street.) For City tax purposes, de-

preciation deductions for all other “qualified property” must be calculated as if the property was

placed in service prior to September 11, 2001. Local Law 17 of 2002. See Form NYC-399Z and Fi-

nance Memorandum 09-5, “Application of IRC Section §280F to Sports Utility Vehicles” for more in-

formation.

For tax years beginning on or after January 1, 2007, the maximum amount that may be deducted for

compensation for personal services rendered by partners has been raised to $10,000.

For tax years beginning on or after January 1, 2006, qualifying taxpayers that relocate to an indus-

trial business zone where they engage in industrial and manufacturing activities may be eligible for

a one-time refundable credit equal to $1,000 for each full-time employee at eligible premises in the

IBZ, with certain limits. Use Form NYC-114.6 to claim the credit against the Unincorporated Busi-

ness Tax.

Instructions For Form Nyc-204 -Partnership Return - 2010 Page 2