Fill a Valid New York It 2659 Template

Guide to Using New York It 2659

Filing the New York State Department of Taxation and Finance IT-2659 form is an essential process for partnerships and New York S Corporations that underpaid or did not pay estimated taxes on behalf of their nonresident individual or corporate partners/shareholders. This requirement aims to ensure these entities comply with tax regulations, avoiding penalties associated with underpayment or nonpayment of estimated taxes. Below are the steps to meticulously complete the IT-2659 form.

1. Start by entering the calendar year or the fiscal year beginning and ending dates applicable to your entity at the top of the form.
2. Fill in the legal name, trade name (if different from the legal name), address, city, village or post office, state, ZIP code, and Employer Identification Number (EIN) in the designated sections.
3. Indicate the type of entity by marking an "X" in the applicable box: whether it's a partnership or an S corporation.
4. Proceed to Schedule A to calculate any underpayment of estimated tax. Input all required values, including the total of all nonresident individual partners' or shareholders' distributive shares of income and deductions allocated to New York.
5. Use the current and prior year sections to fill in the appropriate income, deductions, and tax rates as instructed.
6. Continue with Schedule B if you paid four equal estimated tax installments or made no payments. Enter the lesser of the amounts from lines specified in the form, the total amount of estimated tax payments made for the year, and calculate the total underpayment and the penalty.
7. If Schedule B does not apply, move to Schedule C for a more detailed penalty computation. Follow the form's instructions to input required payments and calculate underpayments or overpayments for each installment period.
8. In Schedule C, Part 2, calculate the penalty for each payment period using the specified rates and methods. Add the results to find the total penalty.
9. In Schedule D, list any partners or shareholders on whose behalf the estimated tax was not paid. Enter their names, identifying numbers, and the number of quarters during which estimated tax was not paid, then calculate the penalty.
10. Sum up the penalties from Schedules B, C, and D on the last page to determine the total penalty amount. Enter this amount in the designated section.
11. Attach a check or money order for the line 52 amount payable to the "COMMISSIONER OF TAXATION AND FINANCE" and staple it to the form where indicated.
12. Complete the paid preparer section if applicable, including the date, preparer’s signature, NYTPRIN, PTIN or SSN, firm's name or your name if self-employed, and address.
13. Sign the form in the designated "Sign your return here" section, providing the signature of the general partner, member, elected officer, or authorized person, alongside the date and daytime phone number.
14. Mail the completed IT-2659 form and payment to the "NYS TAX DEPARTMENT - IT-2659, PO BOX 397, ALBANY NY 12201-0397" before the due date, which is the later of April 15, 2013, or the due date of the entity's tax return considering any extensions.

By carefully following these steps, partnerships and New York S Corporations can accurately fulfill their obligations regarding the payment of estimated taxes on behalf of their partners and shareholders, thereby mitigating potential penalties for underpayment or nonpayment.

1. What is Form IT-2659 and who needs to file it?

Form IT-2659 is used by the New York State Department of Taxation and Finance to report and calculate estimated tax penalties due by partnerships and New York S Corporations. This requirement pertains to underpayment or nonpayment of estimated tax that must be paid on behalf of corporate partners or nonresident individual partners/shareholders. Essentially, if a partnership or S Corporation has nonresident individuals or corporate partners/shareholders, and there was insufficient estimated tax payment made for them, this form is necessary. The form is applicable for entities operating within the calendar year 2012 or the fiscal year that begins and ends in a different time frame as specified.

2. When is Form IT-2659 due?

Form IT-2659 must be filed by the later of two dates: April 15, 2013, or the due date of the partnership or S corporation tax return for the specified year, taking into account any extensions for filing. This deadline ensures that penalties are assessed and paid in a timely manner, following the tax reporting period for which they were accrued.

3. How do I calculate the penalty on Form IT-2659?

To calculate the penalty on Form IT-2659, entities must complete Schedules A through D as applicable. These schedules help calculate the estimated tax underpaid, with separate computations required for nonresident individual partners/shareholders and corporate partners. The penalty is then determined through the short method (Schedule B) or the regular method (Schedule C), depending on the payment patterns of the entity. Finally, Schedule D assesses a failure-to-pay penalty, if applicable. Entities must add all pertinent details, including income earned from New York sources and partnership deductions allocated to New York, to accurately compute the penalty.

4. Where do I mail Form IT-2659 and payment?

The completed Form IT-2659, along with any payment due, should be mailed to: NYS TAX DEPARTMENT - IT-2659, PO BOX 397, ALBANY NY 12201-0397. Checks or money orders associated with the form must be made payable to the "COMMISSIONER OF TAXATION AND FINANCE." Only the amount on line 52, which represents the total penalty calculated, should be included in the payment. This ensures that the payment is accurately processed and credited to the correct account.

5. What if I made no payments of estimated tax?

If no estimated tax payments were made during the year, Schedule B (Short Method for Computing the Penalty) or Schedule C (Regular Method for Computing Penalty) of Form IT-2659 must still be completed. This allows for the calculation of penalties that may be due because of failing to make estimated tax payments. Depending on when payments were eventually made or if they were not made at all before April 15, 2013, the computed penalty may vary.

6. Is there a fee for late filing of Form IT-2659?

The main focus of Form IT-2659 is to calculate and assess penalties for underpayment or nonpayment of estimated taxes, rather than penalizing late filing of the form itself. However, delaying the filing of IT-2659 and the corresponding payment beyond the due date may result in accruing interest or additional penalties on the amount due. Therefore, it is crucial to file the form and complete any required payment as promptly as possible to avoid further charges.

Completing New York State's IT-2659 form involves several critical steps to ensure accurate estimation and timely payment of tax penalties for partnerships and New York S corporations. However, mistakes can occur, leading to complications or unexpected penalties. Here are eight common errors to avoid when filling out this form:

1. Misunderstanding the type of entity: It is crucial to correctly identify whether the taxpayer is a partnership or an S corporation. This information determines the specific tax obligations and the calculation method to be used on the form.
2. Incorrect calculation of nonresident individuals' distributive shares: Line 1 requires precise computation of all nonresident individual partners' or shareholders' shares of income earned from New York sources. Overlooking or miscalculating deductions allocated to New York, as required on line 2, can lead to inaccuracies in the estimated tax calculated on behalf of these nonresidents.
3. Failing to correctly apply the individual and corporation tax rates: Lines 4 and 9 ask for the application of specific tax rates to the adjusted income figures. Using incorrect rates or misapplying them can significantly impact the final tax liability.
4. Omitting or incorrectly entering corporate partners' information: Just as with individual partners, all corporate partners' distributive shares of income and partnership credits must be accurately reported (lines 8 and 11) to avoid underestimating the tax owed.
5. Not completing or incorrectly calculating Schedule B or C: Depending on the payment strategy used, either Schedule B (Short Method) or Schedule C (Regular Method) must be carefully filled. Errors here can lead to wrong underpayment or overpayment estimations.
6. Underestimating total estimated tax required: Line 13 combines the estimated taxes owed on behalf of nonresident individuals and corporations. Accurate computation is essential to avoid penalties for underestimation.
7. Overlooking the need for additional sheets: For entities with more than six partners or shareholders, failing to attach additional sheets following the same format as Schedule D can result in incomplete penalty assessments.
8. Failing to sign and date the form: The form must be signed by an authorized individual to be valid. Neglecting this final step can result in the rejection of the filed form.

Avoiding these mistakes requires careful review of the IT-2659 instructions, accurate calculations of income and deductions, and attention to the specific requirements for reporting estimated tax on behalf of nonresident individuals and corporate partners. By diligently following the form's requirements, partnerships and S corporations can navigate the complexities of New York State's tax system more smoothly.

When dealing with New York State tax matters, particularly for partnerships and S corporations, the need to manage and submit various forms and documents is essential. The IT-2659 form is a pivotal document for these businesses, primarily used to compute and pay estimated tax underpayments for partners and shareholders. Alongside this form, there are several other critical documents businesses must be aware of to ensure compliance and smooth financial operations.

• Form IT-204: This is the Partnership Return form. It's used by partnerships to report their income, deductions, gains, losses, etc., for the tax year.
• Form IT-203: Nonresident and Part-Year Resident Income Tax Return. This form is for individuals who are not residents of New York State but have earned income from New York sources.
• Form CT-3: General Business Corporation Franchise Tax Return, used by corporations to file their income tax return in New York State.
• Form IT-2: Summary of W-2 Statements. This form summarizes information from an employee's W-2 form and is used when filing individual income taxes in New York.
• Form IT-2105: Estimated Tax Payment for Individuals. This form is for individuals to make estimated tax payments throughout the year.
• Form CT-400: Estimated Tax for Corporations. Similar to IT-2105, but specifically for corporations to make their tax payments quarterly.
• Form IT-204-LL: Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form, which is used to pay the filing fee required from these entities.
• Form IT-112-R: New York State Resident Credit. This form is to claim a tax credit for New York State residents who have paid income tax to another state.

Understanding and properly completing these additional forms can be crucial for partnerships and S corporations operating within New York State. They ensure that businesses meet their tax obligations and take advantage of any applicable tax credits or deductions, ultimately supporting these entities in maintaining compliance with state tax laws.

The New York IT-2659 form is closely related to the IRS Form 1040-ES, which is used for individuals to calculate and pay their estimated tax on income that isn't subject to withholding. Both forms serve a similar purpose in encouraging tax payments throughout the year to avoid underpayment penalties but are tailored to different taxpayer categories – IT-2659 for partnerships and S corporations in New York, and Form 1040-ES for individual taxpayers on a federal level.

Similarly, Form IT-204-LL, filed by certain limited liability companies (LLCs) and partnerships in New York, shares a connection with IT-2659 as both involve the reporting and payment of taxes relevant to entities operating within the state. The IT-204-LL focuses on the annual filing fee determined by the income levels of the entity whereas IT-2659 deals with estimated tax penalties, illustrating their complementary roles in ensuring compliance with New York's tax regulations for different forms of businesses.

The IT-203 Nonresident and Part-Year Resident Income Tax Return is another document related to the IT-2659, especially considering nonresident income and tax calculation. While the IT-203 form is for individuals, detailing income earned in New York by nonresidents or those who have lived in New York for only part of the year, IT-2659 extends this premise to cover entities like partnerships and S corporations, focusing on the estimated tax payments for their nonresident members.

For corporations specifically operating within New York, the CT-3 form, or the General Business Corporation Franchise Tax Return, is analogous to the IT-2659. The CT-3 form calculates the income tax liability for corporations, similar to how IT-2659 is used by partnerships and S corporations to address the calculated tax penalties for underpayment or nonpayment of estimated taxes for their corporate partners or shareholders.

On the federal level, Form 1120S, U.S. Income Tax Return for an S Corporation, bears similarity to IT-2659, as both are geared towards S corporations, although with different focuses. Form 1120S is used by S corporations to report their income, gains, losses, deductions, credits, etc., on a federal scale, whereas IT-2659 is specifically for the calculation and payment of estimated tax penalties at the state level in New York.

Form 1065, the U.S. Return of Partnership Income, is another parallel, focused on partnerships. It serves a purpose akin to IT-2659 by having partnerships report their financial details to the IRS. Just as IT-2659 requires the computation of penalties related to the underpayment of estimated taxes for partners, Form 1065 involves the overarching reporting of a partnership’s income, deductions, and gains to properly assess tax obligations federally.

Form IT-558, New York State Adjustments due to Decoupling from the IRC, reflects another aspect of New York state-specific tax considerations, akin to the adjustments an entity might need to consider when calculating their IT-2659 obligations. Decoupling can impact the calculation of nonresident income and, subsequently, the estimated taxes paid on behalf of nonresident partners or shareholders, highlighting the interconnected nature of state tax forms and requirements.

Lastly, the IT-2 form, used by individuals to report wages and withholding to New York State, parallels the IT-2659's focus on ensuring appropriate tax payments are made. While IT-2 directly concerns individual employment income and withholdings, IT-2659 indirectly addresses these concerns through the lens of partnerships and S corporations ensuring that their members' and shareholders' estimated taxes are accordingly paid, particularly for those not residing within New York.

When dealing with the New York IT-2659 form, which focuses on estimated tax penalties for partnerships and New York S corporations, attention to detail and an understanding of the requirements are crucial. Here are some advised dos and don'ts to keep in mind:

Dos:

1. Ensure that the legal name and trade name of the business are accurately filled out, as discrepancies can lead to processing delays or issues with the tax authorities.
2. Double-check the Employer Identification Number (EIN) entered on the form to prevent any misidentification or potential fraud issues.
3. Accurately calculate the estimated tax underpayment or overpayment by completing Schedules A through D as applicable, to ensure the correct penalty amount is assessed.
4. Include the exact amount shown on line 52 in your check or money order, making it payable to the Commissioner of Taxation and Finance, to avoid payment processing issues.
5. File Form IT-2659 by the later of April 15, 2013, or the due date of the partnership or S corporation tax return for the year, considering any extensions, to avoid unnecessary penalties.

Don'ts:

1. Do not leave any sections or schedules incomplete, especially when they are applicable to your filing situation, as this can result in an inaccurate computation of penalties.
2. Do not estimate figures or use approximate amounts in Schedules A through D; use exact numbers for all calculations to ensure accuracy.
3. Avoid filing Form IT-2659 alongside other tax forms; it should be mailed separately to the specified address to ensure it is processed correctly.
4. Do not ignore the payment of estimated taxes on behalf of nonresident individuals and corporations, as failing to do so can lead to significant penalties.
5. Do not delay the signing and dating of the form by an authorized person, as an unsigned form may be considered invalid and can lead to processing delays.

Understanding the New York IT-2659 form can be tricky, and there are many misconceptions about it. Let's clear up some of the most common misunderstandings:

• It's only for big businesses: Often, people believe that the IT-2659 form is exclusively for large corporations. However, this form is also applicable to partnerships and New York S corporations, regardless of their size, for underpayment or nonpayment of estimated taxes on behalf of partners and shareholders who are corporations or nonresident individuals.

• It's optional to file: This is a misconception. If due, the IT-2659 form must be filed by the later of April 15, 2013, or the due date of the partnership or S corporation tax return for the year determined with regard to any extension of time to file. It is not optional for those who meet the filing requirements.

• Filing it with other forms: People often mistakenly think that the IT-2659 can be attached to or filed with other forms. However, the instructions explicitly state not to attach or file Form IT‑2659 with any other form.

• Personal information isn't necessary: Another misconception is that personal information of partners or shareholders isn't needed. In reality, the form requires detailed information about partners/shareholders, including names and identifying numbers (EIN/SSN), to accurately assess estimated taxes or penalties.

• Penalties aren't a big deal: Some believe that penalties for underpayment or nonpayment aren't significant, but this is not true. The form outlines a detailed process for calculating penalties that can add up quickly, especially for larger entities or substantial underpayments.

• Calculating penalties is straightforward: The process for calculating penalties involves several steps and schedules within the form. It is a common misconception that this process is simple and straightforward. In reality, it may involve calculations of underpayments across multiple periods and adjustments based on prior period overpayments or underpayments.

• Estimated payments aren't considered: People often think estimated payments made during the year aren't considered in the penalty calculation. However, the form includes steps to account for any estimated tax payments made when determining the total underpayment for the year and the resulting penalty.

• Only current year data is needed: There's a belief that only current year income and deductions are relevant. Yet, the form requires both current and prior year data to accurately compute estimated tax underpayments and penalties.

• All partners must be included: A common misunderstanding is that all partners, regardless of residency status, must be included in the calculations. However, only nonresident individual partners and corporate partners are subject to the estimated payment requirements detailed on the form.

• Late payments always result in penalties: It's often assumed that any late payment will automatically result in a penalty. While late payments can result in penalties, the form includes provisions that might reduce or eliminate the penalty, depending on when payments are made and other specific circumstances.

Correcting these misconceptions is essential for partnerships and New York S corporations to understand their tax obligations, avoid unnecessary penalties, and ensure compliance with New York State taxation laws.

Fulfilling the requirements of the New York IT-2659 form is critical for partnerships and New York S corporations to avoid penalties for underpayment or nonpayment of estimated taxes on behalf of their nonresident individual partners and corporate shareholders. Here are key takeaways to ensure compliance and accurate filing:

• Ensure to identify the correct tax year or fiscal year for which the IT-2659 form is being filed, as this form pertains to specific tax periods.
• Accuracy in reporting both the legal name and any differing trade name of the business is crucial to prevent processing delays or mismatches in records.
• The form requires detailed information, including the Employer Identification Number (EIN) and the entity type, such as Partnership or S corporation, to be clearly marked.
• Schedules A through D must be completed meticulously to calculate the required estimated tax payments and any applicable penalties.
• Payment of the calculated amount on line 52 should be made promptly and only the line 52 amount should be included in the check or money order payable to the Commissioner of Taxation and Finance.
• The form mandates a strict filing deadline, which is the later of April 15, 2013, or the due date of the entity’s tax return considering any extensions.
• Form IT-2659 should not be attached or filed with any other tax forms, maintaining its separate submission requirement.
• Professional preparers completing the form on behalf of an entity must provide their details, including signature and identification numbers, ensuring accountability and the possibility of follow-up for any unclear entries.
• The form concludes with a certification by an authorized individual of the reporting entity, affirming the accuracy and completeness of the information provided, alongside contact details for possible queries.

Adhering to these guidelines not only ensures compliance with New York State’s Department of Taxation and Finance requirements but also minimizes the likelihood of incurring penalties due to oversight or errors in the estimated tax process for nonresident individuals and corporate partners or shareholders.