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Instructions for Form NYC-2TMBusiness Corporation Tax Return for fiscal years beginning in 2017 or for calendar year 2017Hi g h l i g h t sDepartment of Financeof Recent Tax Law Changes for Business CorporationsSection 21of part Q of Chapter 60 of the Laws of 2016 amended subdivision 1 of section 11-655 of the Administrative Code of the City of New York (“Administrative Code”) to provide for tax years beginning on or after January 1, 2016, calendar year taxpayers are required to file tax reports for such year on or before April 15 of thefollowing year, instead of March 15 of the following year, and the fiscal year taxpayers must file tax reports for suchfiscal year within 3 and one-half months of the close of the fiscal year instead of 2 and one-half months of the closeof the fiscal year.However, for the above tax years, calendar year taxpayers must still make the first tax payment (“Mandatory FirstInstallment or “MFI”) for the following tax year on or before March 15 of that following year and fiscal year taxpayers must still make their first tax payment for the following fiscal year within two and one-half months of theclose of the fiscal year, if these first payments are required. The MFI is now equal to 25 percent of the tax for thesecond preceding tax year for which the payment must be made and is required if the tax for such second preceding tax year exceeded 1,000. See Administrative Code section 11-658, subdivision 1, as amended by section 22of part Q of Chapter 60 of the Laws of 2016 . Taxpayers should file the new Form NYC-300 (Mandatory First Installment (MFI) By Business C Corporations) for this purpose.For taxable years beginning on or after January 1, 2015, federal or state tax base changes should be reported on anAmended Return. See Finance Memorandum 17-5, “Reporting Federal or State Changes” for more information.A new beer production credit is available to eligible taxpayers. See Administrative Code section 11-654(22) as addedby Section 3 of Chapter 333 of the Laws of 2016.GENERAL INFORMATIONA new Subchapter 3-A of Chapter 6 ofTitle 11 of the Administrative Code of theCity of New York (the “Ad. Code”) willapply to tax years starting on or after January 1, 2015. This new subchapter applies to corporations that were previouslysubject to the General Corporation Tax(“GCT”), Subchapter 2 of Chapter 6 ofTitle 11 of the Code, and the BankingCorporation Tax, Subchapter 3 of Title 11of the Code, except that it does not applyto any corporation that is an S corporation, or qualified subchapter S subsidiary,under subchapter S of the Internal Revenue Code of 1986, as amended (collectively, “S Corporations”). S Corporationscontinue to be subject to tax under theGCT and Banking Corporation Tax. Corporations subject to the new Subchapter3-A, Business Corporation Tax, must filethis form unless they are required or per-mitted to file as members of a combinedgroup (Form NYC-2A).S CORPORATIONSIf subject to GCT, an S-Corp must file aGCT return (generally Form NYC-4S,Form NYC-4S-EZ or Form NYC-3L). Ifsubject to Bank Tax, an S-Corp must filea Banking Corporation Tax return (generally Form NYC-1). Under certain limited circumstances, an S corporation maybe permitted or required to file a combined return (Form NYC-3A for GCT orForm NYC-1A for Bank Tax, whicheveris applicable). See, e.g., Finance Memorandum 99-3 for information regardingthe treatment of qualified subchapter Ssubsidiaries. For additional requirementssee the instructions to those forms. An SCorporation may not file this return.CORPORATION DEFINEDAny entity that is an association taxableas a corporation for federal income taxpurposes pursuant to IRC §7701(a)(3) istreated as a corporation for City tax purposes including an unincorporated entitythat elects to be taxable as a corporation.Unincorporated entities that are taxableunder the Business Corporation Tax arenot subject to the Unincorporated Business Tax. Eligible entities having a singleowner disregarded as a separate entityunder the “check-the-box” rules andtreated as either a sole proprietorship or abranch for federal tax purposes will besimilarly treated for City tax purposes.See Finance Memorandum 99-1 for additional information.Corporations required to file FormNYC-2.Corporations, other than S corporations,doing business, employing capital, owning or leasing property or maintaining anoffice in the City are required to file Form
Instructions for Form NYC-2 - 2017NYC-2. Pursuant to section 21 of Chapter 201 of the Laws of 2009, for tax yearsbeginning on or after January 1, 2011, theBanking Corporation Tax was amendedto provide criteria by which banking corporations, engaged in the business ofcredit card transactions and not otherwisedoing business in New York City, wouldbe subject to tax if they met certain criteria, regarding credit card customers ormerchant customer contracts in the City.Some of these criteria were carried overand incorporated into the Business Corporation Tax. Pursuant to these criteria, acorporation is doing business in the cityif (1) it has issued credit cards (bank,credit travel and entertainment) to onethousand or more customers who have amailing address in the city as of the lastday of its taxable year and (2) it has merchant customer contracts with merchantsand the total number of locations coveredby those contracts equals one thousand ormore locations in the city to whom thecorporation remitted payment for creditcard transactions during the taxable year,or (3) the sum of the number of customersdescribed in (1) plus the number of locations covered by its contracts describe in(2) equal one thousand or more.Corporate Partners If a partnership is doing business, employing capital, owning or leasingproperty, or maintaining an office, orderiving receipts from activity, inNew York City, then a corporationthat is a general partner in that partnership is subject to tax and must fileForm NYC-2. If a partnership is doing business, employing capital, owning or leasingproperty or maintaining an office inNew York City, then a corporationthat is a limited partner of that partnership may be subject to tax pursuant to the regulations promulgatedby the Commissioner of Finance. See19 RCNY §11-06.The following are NOT required to filea Business Corporation Tax Return(Form NYC-2):a) A dormant corporation that did not atany time during its taxable year en-gage in any activity or hold title to realproperty located in New York Cityb) A nonstock corporation, organizedand operated exclusively for nonprofitpurposes and not engaged in substantial commercial activities, that hasbeen granted an exemption by the Department of Financec) Corporations subject to taxation underChapter 11, Title 11 (Utility Corporations) of the NYC AdministrativeCode are not required to file BusinessCorporation Tax returns. However,corporations that are subject to taxunder Chapter 11 as vendors of utilityservices are subject to the BusinessCorporation Tax in accordance withsection 11-653.4 of the Code andmust file a return.WIRELESS TELECOMMUNICATIONS SERVICE PROVIDERS. Entities who receive eighty percent ormore of their gross receipts fromcharges for the provision of mobiletelecommunications services to customers will be taxed as if they wereregulated utilities for purposes of theNew York City Utility Tax, GeneralCorporation Tax and Business Corporation Tax. Thus, such entities will besubject to only the New York CityUtility Tax. The amount of gross income subject to tax has been redefined to conform to the FederalMobile Telecommunications Sourcing Act of 2000. In addition, partnersin any such entity will not be subjectto General Corporation Tax or Business Corporation Tax on their distributive share of the income of any suchentity.d) A limited profit housing corporationorganized and operating pursuant tothe provisions of Article Two of thePrivate Housing Finance Lawe) Insurance corporationsf) A Housing Development Fund Company (HDFC) organized and operating pursuant to the provisions ofArticle 11 of the Private Housing Finance LawPage 2g) Organizations organized exclusivelyfor the purpose of holding title toproperty as described in Sections501(c)(2) or (25) of the Internal Revenue Codeh) An entity treated as a Real EstateMortgage Investment Conduit(REMIC) for federal income tax purposes. (Holders of interests in aREMIC remain taxable on such interests or on the income thereon.)i) Corporations principally engaged inthe conduct of a ferry business andoperating between any of the boroughs of the City under a leasegranted by the Cityj) A corporation principally engaged inthe conduct of an aviation, steamboat,ferry or navigation business, or twoor more such businesses, providedthat all of the capital stock of the corporation is owned by a municipal corporation of New Yorkk) Corporations principally engaged inthe operation of marine vessels whoseactivities in the City are limited exclusively to the use of property in interstate or foreign commercel) Foreign corporations that are exemptunder the provisions of Public Law86- 272. See 19 RCNY Section 11-04(b)(11).m) Alien Corporations—An alien corporation (a corporation organized underthe laws of a country, or any politicalsubdivision thereof, other than theUnited States, or organized under thelaws of a possession, territory orcommonwealth of the United States)is not deemed to be doing business,employing capital, owning or leasingproperty, maintaining an office, or deriving receipts from activity, in thecity if the activities in the city are limited to: investing or trading in stocks andsecurities for its own accountwithin the meaning of IRC§864(b)(2)(A)(ii);
Instructions for Form NYC-2 - 2017 investing or trading in commoditiesfor its own account within the meaning of IRC §864(b)(2)(B)(ii); orany combination of these activities. See Ad. Code §11-653(2-a).An alien corporation that under anyprovision of the IRC is not treated asa domestic corporation as definedunder IRC section 7701 and has noeffectively connected income for thetax year is not subject to tax pursuantto clause three of the opening paragraph of Ad. Code §11-652(8).n) An entity that would otherwise meetthe definition of a corporation butthat was subject to the Unincorporated Business Tax (“UBT”) for itstaxable year beginning in 1995 andthat made an election not to be characterized as a corporation under theGeneral Corporation Tax, will alsonot be a corporation under the Business Corporation Tax (Subchapter 3A) unless and until it revokes itselection.NOTE: A corporation that has an officer, employee, agent or representative inthe City and that is not subject to theBusiness Corporation Tax is not requiredto file a Form NYC-2 but must file aForm NYC-245 C-Corp (Section 11-655of the NYC Administrative Code).A corporation shall not be deemed to bedoing business, employing capital, owning or leasing property, or maintaining anoffice, in the city by reason of: The maintenance of cash balanceswith banks or trust companies in thecity; The ownership of shares of stock orsecurities kept in the city if kept in asafe deposit box, safe, vault, or otherreceptacle rented for the purpose, ofif pledged as collateral security, or ifdeposited with one or more banks ortrust companies, or with brokers whoare members of a recognized securityexchange, in safekeeping or custodyaccounts; The taking of any action by any suchbank or trust company or broker,which is incidental to the rendering ofsafekeeping or custodian service tothe corporation; The maintenance of an office in thiscity by one or more officers or directors of the corporation who are notemployees of the corporation if thecorporation otherwise is not doingbusiness in the city, and does not employ capital or own or lease propertyin the city; The keeping of books or records of acorporation in the city if such booksand records are not kept by employees of the corporation and the corporation does not otherwise do business,employ capital, own or lease property,or maintain an office in the city; or Any combination of the activitieslisted above.WHEN AND WHERE TO FILEThe due date for filing is on or before April17, 2018 or, for fiscal year taxpayers, on orbefore the 15th day of the 4th month following the close of the fiscal year.Special short-period returns: If this isNOT a final return and your federal return covered a period of less than 12months as a result of your joining or leaving a federal consolidated group or as aresult of a federal IRC §338 election, thisreturn generally will be due on the duedate for the federal return and not on thedate noted above.Mail all returns, except refund returns:NYC Department of FinanceP.O. Box 5564Binghamton, NY 13902-5564Remittances – Pay online with FormNYC- 200V at nyc.gov/eservices, orMail payment and Form NYC-200V only to:NYC Department of FinanceP.O. Box 3933New York, NY 10008-3933Mail returns claiming refunds:Page 3NYC Department of FinanceP.O. Box 5563Binghamton, NY 13902-5563AUTOMATIC EXTENSIONSAn automatic extension of six months forfiling this return will be allowed if, by theoriginal due date, the taxpayer files with theDepartment of Finance an application forautomatic extension on Form NYC-EXTand pays the amount properly estimated asits tax. See the instructions for Form NYCEXT for information regarding what constitutes a proper estimated tax for thispurpose. Failure to pay a proper estimatedamount will result in a denial of the extension. A taxpayer with a valid six-month automatic extension filed on Form NYC-EXTmay request up to two additional threemonth extensions by filing Form NYCEXT.1. A separate Form NYC-EXT.1 mustbe filed for each additional three-month extension. Forms NYC-EXT and EXT.1 maybe submitted electronically via the Department’s Website or mailed to the address indicated on those forms.FINAL RETURNSIf a corporation ceases to do business inNew York City, the due date for filing afinal Business Corporation Tax Return isthe 15th day after the date of the cessation (Ad. Code Section 11- 655). Corporations may apply for an automaticsix-month extension for filing a final return by filing Form NYC-EXT, Application for Automatic 6- Month Extensionof Time to File Business Income Tax Return. Any tax due must be paid with thefinal return or the extension, whicheveris filed earlier.AMENDED RETURNSIf you are filing an amended return forany purpose, mark an X in the Amendedreturn box on page 1 of the return.If you file an amended federal or state return, you must file an amended New YorkCity return within 90 days (or 120 daysif filing an amended combined returnthereafter).You must file using the correct year’s return for the tax year being amended. Do
Instructions for Form NYC-2 - 2017not use the most current year’s return ifthe current year is not the year beingamended. If you file on the wrong year’sreturn, it may cause the amended returnto be rejected, or may cause a delay in receiving any tax benefits being claimed.The Business Corporation Tax is effective January 1, 2015 and does not applyto any tax return filed for a tax year commencing prior to January 1, 2015.FOR AMENDED RETURNS BASEDON CHANGES TO FEDERAL ORSTATE TAXABLE INCOME OROTHER TAX BASEFor taxable years beginning on or afterJanuary 1, 2015, changes in taxable income or other tax base made by the Internal Revenue Service (“IRS”) and /orNew York State Department of Taxationand Finance (“DTF”) will no longer bereported on form NYC-3360. Instead,taxpayers must report these federal orstate changes to taxable income or othertax base by filing an amended return.This amended return must include an explanatory schedule that identifies eachchange to the tax base (“Tax BaseChange”) and shows how each such TaxBase Change affects the taxpayer’s calculation of its New York City tax. Amandatory template for the explanatoryschedule (Schedule Template) will beavailable on the DOF website atnyc.gov/finance, and taxpayers reportingchanges prior to the publication of theSchedule Template should submit a manually created schedule or schedules thatprovide the information required above.This amended return must also include acopy of the IRS and/or DTF final determination, waiver, or notice of carrybackallowance. Taxpayers that have federaland state Tax Base Changes for the sametax period may report these changes onthe same amended return that includesseparate explanatory schedules for theIRS Tax Base Changes and the DTF TaxBase Changes. Note that for taxableyears beginning on or after January 1,2015, DTF Tax Base Changes may include changes that affect income or capital allocation.The Amended Return checkbox on thereturn is to be used for reporting an IRSor DTF Tax Base Changes, with the appropriate box for the agency making theTax Base Changes also checked. Taxpayers must file an amended return forTax Base Changes within 90 days (120days for taxpayers filing a combined report) after (i) a final determination on thepart of the IRS or DTF, (ii) the signing ofa waiver under IRC §6312(d) or NY TaxLaw §1081(f), or (iii) the IRS has allowed a tentative adjustment based on aan NOL carryback or a net capital losscarryback.If the taxpayer believes that any Tax BaseChange is erroneous or should not applyto its City tax calculation, it should notincorporate that Tax Base Change into itsCity tax calculation on its amended return. However, the taxpayer must attach:(i) a statement to its report that explainswhy it believes the adjustment is erroneous or inapplicable; (ii) the explanatoryschedule that identifies each Tax BaseChange and shows how each would affect its City tax calculation; and (iii) acopy of the IRS and/or DTF final determination, waiver, or notice of carrybackallowance.For more information on federal or stateTax Base Changes, including a more expansive explanation of how taxpayersmust report these changes as well as asample of the explanatory schedule to beincluded within the amended return, seeFinance Memorandum 17-5, 10/13/2017.ACCESSING NYC TAX FORMSBy Computer - Download forms from theFinance website at nyc.gov/financeBy Phone - Order forms by calling 311. Ifcalling from outside of the five NYC boroughs, please call 212-NEW-YORK(212- 639-9675).OTHER FORMS YOU MAY BE REQUIRED TO FILEFORM NYC-2.1—Investment andOther Exempt Income and InvestmentCapital, must be filed by a corporation thathas investment capital (Ad. Code section11-651(4)), investment income (Ad. Codesection 11-651(5)), or other exempt income(Ad. Code section 11-651(5-a).Page 4NYC-2.2—Subtraction Modificationfor Qualified Banks and Other Qualified Lenders, must be filed to utilize thesubtraction modification for qualified residential loan portfolios (Ad. Code section11-652(8)(s)), the subtraction modification for community banks and smallthrifts (Ad. Code section 11-652(8)(q)),the subtraction modification for community banks and small thrifts with a captivereal estate investment trust (REIT) (Ad.Code section 11-652(8)(r)) or the subtraction modification for qualified affordable housing and low income communityloans (Ad. Code section 11-652(8)(t)).NYC-2.3—Prior Net Operating LossConversion (PNOLC Subtraction),must be filed to calculate and utilize thePNOLC subtraction and carryforward(Ad. Code section 11-654.1(2)). Thisform must be filed for every tax year thatyou carry a balance of a PNOLC subtraction, even if you are unable to utilizethe subtraction in a given year.NYC-2.4—Net Operating Loss Deduction (NOLD). Must be filed to calculateand utilize the NOLD and carryforward(Ad. Code section 11-654.1(3)). Thisform must be filed with the amended return when the carryback of a post corporate tax reform net operating loss (NOL)is claimed. NOLs from tax years thatbegin on or after January 1, 2015, cannot be carried back to tax years thatbegan before January 1, 2015.NYC-2.5—Computation of ReceiptsFactor—must be filed by any corporation claiming less than a 100% businessallocation percentage to NYC.FORM NYC-EX
credit card transactions and not otherwise doing business in New York City, would be subject to tax if they met certain crite - ria, regarding credit card customers or merchant customer contracts in the City. Some of these criteria were carried over and incorporated into the B
