CLIENT ALERT

For additional information contact:
Lorna E. Smith
Marketing Coordinator
lsmith@untracht.com

July 10, 2007

New York City -- Personal Income Tax: Credit for Unincorporated Business Tax Increased

New York City legislation recently enacted an increase to the personal income tax credit available to owners of businesses subject to the unincorporated business tax. Under prior law, owners with incomes of up to $42,000 were eligible for a 65% credit against their personal income tax for their unincorporated business tax payments. The credit decreased on a sliding scale to 15% for owners with taxable incomes exceeding $142,000.

Under the new legislation, for taxable years beginning on or after January 1, 2007, the credit amount is increased to 100% for owners with incomes of up to $42,000. The credit still decreases on a sliding scale, but the minimum credit is now 23% for owners with incomes of $142,000 or more.