Free CT-6-I (Instructions) - New York

New York State Department of Taxation and Finance

Instructions for Form CT-6
Election by a Federal S Corporation to be Treated As a New York S Corporation General information
A federal S corporation may elect to be taxed as a New York S corporation (Tax Law section 660(a)) by filing Form CT6. Once the New York State (NYS) Tax Department has approved the filing of Form CT6: ­ The corporation will be treated as a New York S corporation under Article 9A, section 208.1A or Article 32, section 1450(f), of the Tax Law and file its New York S corporation franchise tax return on Form CT3S or Form CT32S.

CT-6-I
(7/08)

A federal S corporation that is not taxable in New York may make a New 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 corporation. If the parent does not make a New York S election, the QSSS will be taxed as a New York C corporation. See TSBM97(6)C, Important Notice: Attention Shareholders of S Corps, for details regarding the treatment of QSSS's in New York State.

When to make the election
To be effective for the tax year, file Form CT6 at any time during the preceding tax year, or on or before the fifteenth day of the third month of the tax year to which the election will apply. An election made no later than the fifteenth day of the third month after the beginning of a tax year that is less than two and a half months long will be considered timely filed for that tax year. However, an election made on or before the fifteenth day of the third month of the tax year to which the election will apply, will not be effective until the following tax year if: a) The corporation did not qualify as a federal S corporation, under section 1361(b) of the Internal Revenue Code (IRC) on one or more days of the tax year prior to the date the election was made; or b) One or more of the shareholders who held stock before the date of election did not consent to the corporation being a New York S corporation. If the corporation is organized within New York State and anticipates being a New York State S corporation for its first tax year, it must file Form CT6 on or before the fifteenth day of the third month following the effective date of its certificate of incorporation. If the corporation is organized outside New York State, begins to do business in New York State, and anticipates being a New York S corporation for its first tax year, it must file CT6 on or before the fifteenth day of the third month following the date it began doing business in New York State. Examples: A corporation was a New York C corporation for the tax year 1/1/07 - 12/31/07. The corporation anticipates being a New York S corporation for the tax year 1/1/08 - 12/31/08. The corporation must file Form CT-6 on or before March 17, 2008, to be a New York S corporation for the tax year 1/1/08 - 12/31/08. A corporation's effective date of incorporation in New York State is 6/13/08. The corporation anticipates being a New York S corporation for its first tax year 6/13/08 - 12/31/08. The corporation must file Form CT-6 on or before August 28, 2008, to be a New York S corporation for the tax year 6/13/08 - 12/31/08. A corporation's date of incorporation outside New York State is 2/6/08. The corporation anticipates being a New York S corporation for its first tax year 2/6/08 - 12/31/08. The corporation began doing business in New York State on 3/25/08. The corporation must file Form CT-6 on or before June 9, 2008, to be a New York S corporation for the New York tax year 3/25/08 - 12/31/08. It is your responsibility to mail the election on time. The date of the U.S. postmark will be considered the date of delivery. The date recorded or marked by certain private delivery services, as designated by the U.S. Secretary of the Treasury, shall be treated as a postmark (Tax Law section 1091). If sent by registered or certified mail, the date of registration or certification will be considered the date of delivery.

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Each individual shareholder of the New York S corporation will include his or her share of the New York S corporation's items of income, loss and deductions under Article 22, section 660, of the Tax Law and file an individual income tax return on Form IT201, Resident Income Tax Return, or Form IT203, Nonresident and Part-Year Resident Income Tax Return. A shareholder that is a 501(c)(3) organization will include its share of the New York S corporation's items of income, loss, and deductions under Article 13, section 292(a)(5) of the Tax Law and file its tax return on Form CT13, Unrelated Business Income Tax Return.

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For additional information, see sections 660 and 292(a)(5) of the New York State Tax Law and Publication 35, New York Tax Treatment of S Corporations and Their Shareholders.

Corporate franchise tax
A federal S corporation that elects to be a New York S corporation must file Form CT3S or CT32S within 2½ months after the end of each tax year.

Penalty for late filing
If the New York S corporation fails to file Form CT3S or CT32S, or fails to include the required shareholder information, it must pay 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 Article 13 taxpayer who was a shareholder during any part of the year shall be included in the shareholder information.

Who may elect
To elect to treat a corporation as a New York S corporation, you must meet the following requirements:

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The corporation must be a federal S corporation. If your federal election is pending, file your New York election and indicate that your federal election is pending. When you receive federal approval, forward a copy to the Tax Department at the address listed under Where to file. The corporation must be a general business corporation taxable under Article 9A or a banking corporation taxable under Article 32 of the New York State Tax Law. If a corporation is taxable under Article 9 or 33 of the Tax Law, it cannot elect to be a New York S corporation. It is considered an excluded corporation. All of the corporation's shareholders must consent to the New York S election. A qualified subchapter S subsidiary (QSSS) may not make the New York S election. Only the parent corporation of the QSSS can make the New York S election.

Page 2 of 2 CT-6-I (7/08)

Approval of election
You will be notified whether your election is approved, and if approved, the date the election will take effect. Until then, do not file Form CT3S or CT32S. If you are now required to file Form CT3, CT4, or CT32, continue filing it until your election takes effect. If you do not receive confirmation of your election before your return is due, you should write to: NYS Tax Department, Corporation Tax Registration, W A Harriman Campus, Albany NY 12227. Note: All information in this election form is subject to review by the Audit Division in determining whether the corporation meets the legal requirements for filing as a New York S corporation.

If a husband and wife have a community interest in the stock or the income from it, both must consent. Likewise, each tenant in common, joint tenant, or tenant by the entirety must also consent. A minor's consent is made by the minor or the legal guardian. If no legal guardian has been appointed, the natural guardian makes the consent (even if a custodian holds the minor's stock under a law patterned after the Uniform Gifts to Minors Act). An Article 13 taxpayer's consent is made by an elected officer or other authorized person.

Where to file
Mail Form CT6 to: NYS TAX DEPARTMENT
CORPORATION TAX REGISTRATION W A HARRIMAN CAMPUS ALBANY NY 12227

Years for which election is effective
The election will be effective for the entire corporate tax year for which it is made and for all succeeding tax years until terminated.

Termination or revocation of election
Shareholders of a New York S corporation should refer to Form CT6.1, Termination of Election to be Treated As a New York S Corporation, for information and instructions regarding the termination or revocation of a New York S election.

Need help?
Internet access: www.nystax.gov (for information, forms, and publications) Fax-on-demand forms: Forms are available 24 hours a day, 7 days a week. 1 800 7483676 Telephone assistance is available from 8:00 A.M. to 5:00 P.M. (eastern time), Monday through Friday. To order forms and publications: 1 800 4628100 Corporation Tax Information Center: 1 888 6982908 From areas outside the U.S. and outside Canada: (518) 4856800 Text Telephone (TTY) Hotline (for persons with hearing and speech disabilities using a TTY): If you have access to a TTY, contact us at 1 800 6342110. If you do not own a TTY, check with independent living centers or community action programs to find out where machines are available for public use. Persons with disabilities: In compliance with the Americans with Disabilities Act, we will ensure that our lobbies, offices, meeting rooms, and other facilities are accessible to persons with disabilities. If you have questions about special accommodations for persons with disabilities, please call 1 800 9721233.

Specific instructions
Entering dates -- Unless you are specifically directed to use a different format, enter dates in the mm-dd-yy format (using dashes and not slashes). Enter the legal name of the corporation exactly as it appears in the records of the New York State Department of State. Enter the DBA or trade name that appears on the Certificate of Assumed Name filed with the New York State Department of State, if different from the legal name. Enter the number of shares of stock issued and outstanding -- The number of shares of stock entered in this box should be the number of shares of stock that have been issued to shareholders and have not been reacquired by the corporation. It should equal the total shares of stock owned by all shareholders, as reported in column C. Continuation sheet or separate consent statement -- If you need a continuation sheet or use a separate consent statement, attach it to Form CT6. The separate consent statement must contain the name, address, and employer identification number of the corporation and the shareholder information requested in columns A through D. Column A -- Enter the name and address of each shareholder. Column B -- Enter the social security number of each shareholder who is an individual. Enter the employer identification number (EIN) of each shareholder that is an estate, a qualified trust, or an exempt organization. Column C -- Enter the number of shares of stock each shareholder owns and the dates the stock was acquired. Do not list the shares of stock for those shareholders who sold or transferred all of their stock before the election was made but who still must consent to the election for it to be effective for the tax year. For more information, see the instructions for column D. Column D -- Each shareholder at the time the election is made must consent to the election by signing in column D or by signing a separate consent statement, described in Continuation sheet or separate consent statement. If the election is made during the corporation's first tax year for which it is to be effective, any former shareholder who held stock at any time on or before the fifteenth day of the third month of the electing year must also consent to the election. If the former shareholder does not consent, the election will not be effective until the following tax year.

Privacy notification The Commissioner of Taxation and Finance may collect and maintain personal information pursuant to the New York State Tax Law, including but not limited to, sections 5a, 171, 171a, 287, 308, 429, 475, 505, 697, 1096, 1142, and 1415 of that Law; and may require disclosure of social security numbers pursuant to 42 USC 405(c)(2)(C)(i). This information will be used to determine and administer tax liabilities and, when authorized by law, for certain tax offset and exchange of tax information programs as well as for any other lawful purpose. Information concerning quarterly wages paid to employees is provided to certain state agencies for purposes of fraud prevention, support enforcement, evaluation of the effectiveness of certain employment and training programs and other purposes authorized by law. Failure to provide the required information may subject you to civil or criminal penalties, or both, under the Tax Law. This information is maintained by the Director of Records Management and Data Entry, NYS Tax Department, W A Harriman Campus, Albany NY 12227; telephone 1 800 2255829. From areas outside the United States and outside Canada, call (518) 4856800.