Sources: NYC Department of Finance — UBT forms & instructions (2025/2026); NY State Department of Taxation and Finance — Form IT-219-I (current); NYC Admin Code §11-501 through §11-541
Last verified: August 2026
Official NYC Department of Finance – UBT | NY State Form IT-219-I (current)
Credit 1 — Business Tax Credit (Form NYC-202, Line 18): Computed on your UBT return itself, based on your dollar amount of UBT liability. This directly reduces what you owe on your NYC-202. Threshold: full credit if UBT ≤ $3,400; partial credit if UBT is $3,400–$5,400; no credit if UBT ≥ $5,400.
Credit 2 — IT-219 Personal Income Tax Credit (NY State Form IT-201): A separate credit NYC residents claim on their New York State personal income tax return against NYC personal income tax. This uses the $42,000–$142,000 income phase-out and the 23% minimum. It does not reduce your NYC-202 UBT liability directly.
The calculator below computes both credits and shows them separately.
Enter your details below to see your Business Tax Credit (Form NYC-202), your IT-219 personal income tax credit, net UBT owed, and filing requirements. Updated for 2026 tax year.
This calculator provides informational estimates based on published NYC Department of Finance and NY State Department of Taxation and Finance rules as of August 2026. It does not constitute tax, legal, or financial advice. Individual circumstances — including personal exemptions, deductions, apportionment, NYC personal income tax caps on the IT-219 credit, and special situations — may produce different results. For decisions involving tax obligations or financial planning, consult a qualified professional licensed in your jurisdiction.
Pre-calculated for full-year NYC residents using the official formulas. Credit 1 = Business Tax Credit on NYC-202 (based on UBT liability amount). Credit 2 = IT-219 personal income tax credit (based on NYC taxable income phase-out, shown as % of UBT paid).
| NYC Taxable Income | UBT Liability (4%) | Credit 1: BTC (NYC-202) | Net UBT Owed | Credit 2: IT-219 % | Credit 2: IT-219 Amount |
|---|---|---|---|---|---|
| $25,000 | $1,000 | $1,000 (100%) | $0 | 100% | $1,000 |
| $50,000 | $2,000 | $2,000 (100%) | $0 | 93.8% | $1,876 |
| $75,000 | $3,000 | $3,000 (100%) | $0 | 74.6% | $2,238 |
| $85,000 | $3,400 | $3,400 (100%) | $0 | 66.9% | $2,275 |
| $100,000 | $4,000 | $2,800 (partial) | $1,200 | 55.3% | $2,212 |
| $115,000 | $4,600 | $1,840 (partial) | $2,760 | 43.8% | $2,015 |
| $135,000 | $5,400 | $0 (no credit) | $5,400 | 28.4% | $1,534 |
| $142,000+ | $5,680+ | $0 (no credit) | Full liability | 23% (min) | 23% of UBT paid |
Credit 1 formula (NYC-202 Line 18): If UBT ≤ $3,400 → full credit. If
$3,400 < UBT < $5,400 → Tax × ($5,400 − Tax) / $2,000. If UBT ≥ $5,400 → $0 credit.
Credit 2 formula (IT-219): If NYC taxable income ≤ $42,000 → 100%. If $42,000 < income
< $142,000 → percentage = 1 − (0.770 × (income − $42,000) / $100,000), rounded to 3 decimals (per IT-219
Worksheet B). If income ≥ $142,000 → 23% minimum. Part-year residents: multiply IT-219 credit by (days in
NYC / 365). The IT-219 credit cannot exceed NYC personal income tax otherwise owed.
NYC UBT involves two completely separate credits that work differently, are claimed on different forms, and are administered by different agencies. Confusing them is the most common UBT mistake. This page is part of our New York tax and payroll tax calculators collection.
This credit is calculated and claimed directly on your NYC UBT return. It is based entirely on the dollar amount of your UBT liability — not on your taxable income level. The official thresholds from the Form NYC-202 Business Tax Credit Computation schedule are:
At a 4% rate, this means: taxable income up to $85,000 results in full credit (UBT ≤ $3,400). Taxable income above $135,000 results in no Business Tax Credit (UBT ≥ $5,400). Between $85,001 and $134,999, a partial credit applies.
This is a separate credit filed on your New York State personal income tax return (Form IT-201) to claim a credit against your NYC personal income tax for UBT you have already paid. It is administered by the NY State Department of Taxation and Finance (not NYC DOF). The credit percentage is based on your NYC personal income taxable income. To estimate that NYC personal income tax — the liability this credit offsets — see our NYC local income tax calculator.
The IT-219 credit cannot exceed your NYC personal income tax otherwise payable. Any unused credit cannot be refunded or carried over.
You qualify for the Business Tax Credit (NYC-202) and/or the IT-219 personal income tax credit if you meet these conditions:
Do freelancers qualify? Yes — sole proprietors, independent contractors, and freelancers with NYC-sourced business income file Form NYC-202 and can claim the Business Tax Credit. NYC resident freelancers may also claim the IT-219 credit. If you earn self-employment income in New York City, you may also owe the Metropolitan Commuter Transportation Mobility Tax (MCTMT) — estimate it with our New York MCTMT calculator.
Do partnerships qualify? Yes — partnerships file Form NYC-204. The Business Tax Credit is calculated at the entity level. NYC resident partners then claim the IT-219 credit on their personal NY State return based on their share of UBT paid by the partnership.
Do LLCs qualify? Yes — single-member LLCs file NYC-202; multi-member LLCs file NYC-204. Both credits apply as for sole proprietors and partnerships respectively.
| UBT Liability (Line 17) | Equiv. Taxable Income (at 4%) | Business Tax Credit | Net UBT Owed |
|---|---|---|---|
| $3,400 or less | $85,000 or less | 100% — full credit | $0 |
| $3,401 – $5,399 | $85,001 – $134,999 | Partial: Tax × ($5,400 − Tax) / $2,000 | Tax minus credit |
| $5,400 or more | $135,000 or more | $0 — no credit | Full liability |
| NYC Personal Taxable Income | IT-219 Credit % | What This Means |
|---|---|---|
| $0 – $42,000 | 100% | Full credit against NYC personal income tax |
| $42,001 – $141,999 | 100% → 23% (linear) | Sliding scale — credit decreases as income rises |
| $142,000+ | 23% (minimum) | Minimum credit — you still receive 23% of UBT paid |
Example (income $75,000): UBT liability = $75,000 × 4% = $3,000. Credit 1 (Business Tax Credit on NYC-202): $3,000 ≤ $3,400 → full credit, net UBT = $0. Credit 2 (IT-219): income phase-out = 1 − (0.770 × ($75,000 − $42,000) / $100,000) = 1 − 0.254 = 74.6%. IT-219 credit = $3,000 × 74.6% = $2,238 applied against NYC personal income tax on Form IT-201.
Example (income $100,000): UBT liability = $4,000. Credit 1 (Business Tax Credit on NYC-202): $4,000 × ($5,400 − $4,000) / $2,000 = $4,000 × $1,400 / $2,000 = $2,800. Net UBT = $1,200. Credit 2 (IT-219): income phase-out = 1 − (0.770 × ($100,000 − $42,000) / $100,000) = 1 − 0.447 = 55.3%. IT-219 credit = $4,000 × 55.3% = $2,212 applied against NYC personal income tax.
Step 1: Determine your NYC taxable income. Start with your net income from NYC business activities after allowable deductions, the allowance for taxpayer's services (up to $10,000), and the $5,000 exemption. This is NYC-202 Line 16.
Step 2: Calculate your UBT liability. Multiply your NYC taxable income (Line 16) by 4%. This is Line 17. Example: $100,000 × 0.04 = $4,000.
Step 3: Apply the Business Tax Credit formula (Line 18).
Step 4: Net UBT (Line 19) = Line 17 − Line 18. This is what you owe on your NYC-202 return.
Step 1: Determine total UBT paid. Use the amount from your NYC-202 Line 19 (or your partnership's Form NYC-204 multiplied by your distributive share percentage).
Step 2: Determine your NYC personal income taxable income. This comes from your NYC personal income tax computation — it may differ from your UBT taxable income.
Step 3: Find your credit percentage.
Step 4: IT-219 credit = UBT paid × credit percentage. This credit cannot exceed your NYC personal income tax otherwise owed. Claim it on Form IT-201-ATT.
Part-year residents: Multiply the IT-219 credit by your days in NYC divided by 365 (or 366 in a leap year).
Source: Form NYC-202 Business Tax Credit Computation Schedule (NYC Admin Code §11-503)
If UBT liability ≤ $3,400:
Credit = entire UBT liability (net tax = $0)
If $3,400 < UBT liability < $5,400:
Credit = UBT Liability × ($5,400 − UBT Liability) / $2,000
If UBT liability ≥ $5,400:
Credit = $0 (no Business Tax Credit)
Source: IT-219-I Instructions, NY State Department of Taxation and Finance
If NYC personal taxable income ≤ $42,000:
Credit = UBT Paid × 1.000 (100% of UBT imposed)
If $42,000 < NYC personal taxable income < $142,000:
Credit = UBT Paid × [1 − (0.770 × ((Income − $42,000) / $100,000))]
(Per IT-219 Worksheet B, the 0.770 factor brings the credit to exactly the 23% minimum at $142,000. Round the percentage to 3 decimal places.)
If NYC personal taxable income ≥ $142,000:
Credit = UBT Paid × 0.230 (23% minimum)
Part-year resident proration:
IT-219 Credit = Credit (above) × (Days in NYC / 365)
Cap: IT-219 Credit cannot exceed NYC personal income tax otherwise owed.
| Business Structure | Form to File | Credit 1 (BTC) | Credit 2 (IT-219) |
|---|---|---|---|
| Sole Proprietor | NYC-202 | Calculated on Line 18 of NYC-202 | Claimed by owner on IT-219 / IT-201 |
| Single-Member LLC | NYC-202 | Same as sole proprietor | Claimed by member on IT-219 / IT-201 |
| Partnership | NYC-204 | Calculated at entity level on NYC-204 | Each NYC resident partner claims their share on IT-219 |
| Multi-Member LLC | NYC-204 | Same as partnership | Each NYC resident member claims their share on IT-219 |
| Estate or Trust | NYC-202EIN | Calculated on NYC-202EIN | Fiduciary and/or beneficiaries claim on IT-219 per Schedule A allocation |
| S-Corp | No UBT return — subject to NYC General Corporation Tax (GCT) instead | N/A — not subject to UBT | N/A — not subject to UBT |
| C-Corp | NYC Business Corporation Tax return | N/A — not subject to UBT | N/A — not subject to UBT |
Key point about S-Corps: While S-Corps are not subject to UBT, NYC does not recognize the federal S-Corp election for city income tax purposes. S-Corps in NYC are subject to the NYC General Corporation Tax (GCT) at 8.85% of allocated net income — a significantly higher rate than the 4% UBT. The S-Corp election may reduce federal self-employment tax, but it does not necessarily lower your total NYC tax burden. Always consult a CPA before changing entity structure.
The filing threshold and payment threshold are different. Understanding both prevents penalties.
You must file Form NYC-202 if either of the following applies:
Partnerships must file Form NYC-204 if either of the following applies:
Note: The partnership filing threshold ($25,000 gross) is much lower than the individual threshold ($95,000 gross). Many small partnerships must file even with modest revenues.
Estimated quarterly payments (Form NYC-5UBTI for individuals; NYC-5UB for partnerships) are required when your UBT liability — before any credits are applied — is reasonably expected to exceed $3,400 for the year. Payments are due April 15, June 15, September 15, and January 15 of the following year.
| Scenario (Individual) | File NYC-202? | Estimated Payments? |
|---|---|---|
| Gross income < $95K and taxable income < $35K | No | No |
| Gross income > $95K, UBT liability ≤ $3,400 | Yes | No — UBT under $3,400 |
| Gross income > $95K, UBT liability $3,401–$5,399 | Yes | Yes — pre-credit UBT exceeds $3,400 |
| Gross income > $95K, UBT liability ≥ $5,400 | Yes | Yes — no Business Tax Credit applies |
If you lived in NYC for only part of the tax year, the IT-219 personal income tax credit is prorated based on your days in the city. The Business Tax Credit on your NYC-202 is not prorated — it applies to whatever UBT you owe as a part-year filer.
IT-219 proration formula:
IT-219 Credit = Full-Year IT-219 Credit × (Days in NYC / 365)
Example: You moved to NYC on July 1 and lived there for 184 days. Your full-year IT-219 credit based on $75,000 income would be $3,000 × 67% = $2,010. Your prorated IT-219 credit = $2,010 × (184 / 365) = $1,013.
Note for partners: If you are a part-year resident partner, use the Part-Year Resident UBT Allocation Worksheet on the back of Form IT-219 to compute your allocated share.
The chart below shows the IT-219 personal income tax credit percentage as NYC personal taxable income rises. Note: this chart depicts the IT-219 credit only, not the Business Tax Credit on NYC-202.
IT-219 Credit % vs. NYC Personal Taxable Income (2026) — 100% up to $42,000; slides linearly to 23% at $142,000; stays at 23% minimum above $142,000. This credit is claimed on NY State Form IT-219 / IT-201 and applied against NYC personal income tax.
| Structure | NYC Tax | Rate | Credit 1 (BTC) | Credit 2 (IT-219) | Form |
|---|---|---|---|---|---|
| Sole Proprietor | UBT | 4% | ✅ Yes | ✅ Yes (residents) | NYC-202 |
| Single-Member LLC | UBT | 4% | ✅ Yes | ✅ Yes (residents) | NYC-202 |
| Partnership / Multi-Member LLC | UBT | 4% | ✅ Yes (entity level) | ✅ Yes (partners, residents) | NYC-204 |
| S-Corp | NYC GCT (not UBT) | 8.85% | ❌ No UBT credits | ❌ No UBT credits | NYC-4S |
| C-Corp | NYC Business Corp Tax | 8.85% | ❌ No UBT credits | ❌ No UBT credits | NYC-2 / NYC-2A |
S-Corp caution: NYC does not recognize the federal S-Corp election for city income tax purposes. S-Corps pay the NYC General Corporation Tax at 8.85% — more than double the 4% UBT rate. The S-Corp election can help reduce federal self-employment tax, but on the NYC side it typically increases the city tax burden. Model the full picture with a CPA before electing S-Corp status solely for tax reasons.
What if my business has a loss? If your business has a net loss, you generally do not owe UBT and cannot claim either credit. Losses may be carried forward to offset future NYC taxable income under NYC net operating loss rules (Form NYC-NOLD-UBTI).
What if I have multiple businesses in NYC? All NYC business activities are treated as one for UBT purposes. Combine income and expenses from all businesses on a single UBT return. Both credits are calculated on the combined taxable income.
What if I live in New Jersey but work in NYC? Non-residents may still owe UBT on NYC-sourced income and can claim the Business Tax Credit (Credit 1) on NYC-202. However, the IT-219 personal income tax credit (Credit 2) is available only to NYC residents or part-year residents. You may be eligible for a credit on your NJ return for NYC taxes paid.
What if my NYC personal income tax is less than my IT-219 credit? The IT-219 credit is capped at your NYC personal income tax otherwise owed. It cannot generate a refund or be carried over.
What if the Business Tax Credit (Credit 1) reduces my net UBT to $0, and I also have an IT-219 credit? The IT-219 credit on your state return is based on UBT imposed, not on UBT you ultimately paid after the Business Tax Credit. You may still have an IT-219 credit even if your net NYC-202 tax is $0, as long as UBT was imposed and the Business Tax Credit reduced it.
There are two separate NYC UBT credits. The Business Tax Credit (Form NYC-202, Line 18) is computed directly on your UBT return based on your UBT liability: if your UBT is $3,400 or less, you get a full credit (net = $0); if UBT is between $3,400 and $5,400, a partial credit applies using the formula Tax × ($5,400 − Tax) / $2,000; if UBT is $5,400 or more, no Business Tax Credit is allowed.
The IT-219 personal income tax credit is a separate NY State form (IT-219, filed with Form IT-201) that lets NYC residents claim a credit against their NYC personal income tax for UBT paid. This credit uses the $42,000–$142,000 income phase-out (100% down to 23% minimum).
You are eligible if you pay NYC Unincorporated Business Tax. This includes sole proprietors, partnerships, LLCs (treated as sole props or partnerships), estates, and trusts. For the Business Tax Credit (NYC-202), any entity filing a UBT return may qualify. For the IT-219 personal income tax credit, you must be a NYC resident (or part-year resident) individual, estate, trust, or partner receiving a distributive share of partnership UBT.
S-Corps are not subject to UBT — they pay NYC General Corporation Tax instead — so they cannot claim either UBT credit. Neither credit is refundable.
The Business Tax Credit (NYC-202 Line 18) is calculated from your UBT liability (Line 17 = taxable income × 4%):
• If UBT liability ≤ $3,400: credit = full amount of tax (net = $0).
• If $3,400 < UBT < $5,400: credit = UBT × ($5,400 − UBT) / $2,000.
• If UBT ≥ $5,400: credit = $0.
Example: taxable income $100,000 → UBT = $4,000. Credit = $4,000 × ($5,400 − $4,000) / $2,000 = $4,000 × $1,400 / $2,000 = $2,800. Net UBT = $1,200.
The IT-219 personal income tax credit phases out based on your NYC personal income taxable income:
• $42,000 or less: 100% credit.
• More than $42,000 but less than $142,000: linear phase-out. Percentage = 1 − (0.770 × ((income −
$42,000) / $100,000)), rounded to 3 decimal places per IT-219 instructions.
• $142,000 or more: 23% minimum credit.
These thresholds apply to the IT-219 only. The Business Tax Credit on NYC-202 uses different thresholds ($3,400 and $5,400 of UBT liability).
Yes — if you are a freelancer, independent contractor, or sole proprietor, you must file a UBT return (Form NYC-202) if your gross income from NYC business activities exceeds $95,000, OR if your UBT taxable income exceeds $35,000 (even if gross income is under $95,000). You may not owe any tax after the Business Tax Credit, but filing is required if you meet either threshold.
Partnerships (and multi-member LLCs taxed as partnerships) must file Form NYC-204 if gross income exceeds $25,000 or if taxable income exceeds $15,000. These thresholds are much lower than the individual thresholds ($95,000 gross / $35,000 taxable). Many small partnerships with even modest revenues must file.
They are entirely separate credits administered by different agencies. The Business Tax Credit is on Form NYC-202 Line 18, administered by NYC DOF, based on your UBT liability amount ($3,400/$5,400 thresholds), and directly reduces your UBT owed on the NYC return. The IT-219 credit is a NY State form (filed with Form IT-201), administered by NY State DTF, based on your NYC personal taxable income ($42,000–$142,000 phase-out), and reduces your NYC personal income tax on your state return. Both credits are non-refundable and each has its own cap.
Yes, but differently for each credit. The Business Tax Credit (NYC-202) is not prorated — it applies to whatever UBT is owed on your part-year return. The IT-219 personal income tax credit is prorated for part-year residents: multiply the credit by the number of days you lived in NYC divided by 365 (366 in a leap year). The calculator above handles the IT-219 proration when you select "Part-year NYC resident."
Estimated quarterly payments (Form NYC-5UBTI for individuals; NYC-5UB for partnerships) are required when your UBT liability — before any credits are applied — is reasonably expected to exceed $3,400 for the year. The payments are due April 15, June 15, September 15, and January 15 of the following year. Note: the $3,400 trigger is the pre-credit UBT liability, not the amount you expect to owe after the Business Tax Credit.
Yes. Single-member LLCs are treated as sole proprietors and file Form NYC-202 — the Business Tax Credit applies on that return, and the member may claim the IT-219 credit on their state return. Multi-member LLCs are treated as partnerships and file Form NYC-204 — the Business Tax Credit is calculated at the entity level, and each NYC resident member may claim their share of the IT-219 credit on their state return.
For the Business Tax Credit: sole proprietors and single-member LLCs file Form NYC-202 (or NYC-202S for simple returns); partnerships and multi-member LLCs file Form NYC-204; estates and trusts file Form NYC-202EIN. The Business Tax Credit is calculated on the face of these returns (Line 18 of NYC-202).
For the IT-219 personal income tax credit: complete NY State Form IT-219 using information from your NYC-202 or NYC-204, and attach it to Form IT-201. Transfer the credit to Form IT-201-ATT.
Neither credit is refundable. The Business Tax Credit (NYC-202) can reduce your UBT liability to zero but cannot generate a refund. The IT-219 personal income tax credit cannot exceed your NYC personal income tax otherwise owed, and any unused credit cannot be refunded or carried over to future years.
Form IT-219 is a New York State personal income tax form administered by the NY State Department of Taxation and Finance (not NYC DOF). NYC resident individuals, estates, trusts, and partners in partnerships subject to UBT use it to claim a credit against NYC personal income tax for UBT paid. It is filed as an attachment to Form IT-201 (Resident Income Tax Return) or Form IT-360.1 (part-year residents). It is a completely separate filing from the NYC-202 or NYC-204 UBT return.
S-Corps are not subject to NYC UBT. However, NYC does not recognize the federal S-Corp election for city income tax purposes. S-Corps are subject to the NYC General Corporation Tax (GCT) at 8.85% of allocated net income — significantly higher than the 4% UBT rate. While an S-Corp election can reduce federal self-employment tax, it typically increases your NYC tax burden. Model the complete tax picture with a CPA before making this election.
If you are required to file and do not, penalties can include 5% of the tax due per month (up to 25%) plus interest. Failure to make required estimated payments may result in an underpayment penalty (Form NYC-221). Filing late but paying on time reduces the late-filing penalty. File on time even if you expect to owe $0 after the Business Tax Credit.
Individuals must file Form NYC-202 if their gross income from all business activities (before any deduction for cost of goods sold or services performed) exceeds $95,000. This is a filing requirement even if net taxable income is low and the Business Tax Credit would eliminate all tax. There is also a secondary trigger: if gross income is $95,000 or less but UBT taxable income exceeds $35,000, filing is still required. The $95,000 threshold has applied since 2009.
The IT-219 credit is applied on your NY State personal income tax return against the NYC personal income tax computed on your taxable income. It cannot exceed the NYC personal income tax otherwise payable (the credit can only reduce your NYC personal tax liability to zero). Any unused portion cannot be refunded or carried forward. The credit is claimed on Form IT-201-ATT and transferred to your Form IT-201.
This calculator implements two separate official NYC UBT credit formulas as described in the source documents below.
Credit 1 — Business Tax Credit (Form NYC-202, Line 18): The calculator applies the exact formula from the Business Tax Credit Computation schedule on Form NYC-202 (NYC Admin Code §11-503): full credit for UBT ≤ $3,400; partial credit formula Tax × ($5,400 − Tax) / $2,000 for UBT between $3,400 and $5,400; no credit for UBT ≥ $5,400.
Credit 2 — IT-219 Personal Income Tax Credit: The calculator applies the formula from IT-219-I Instructions (current, NY State DTF): 100% for NYC taxable income ≤ $42,000; linear phase-out from 100% to 23% for income between $42,000 and $142,000; 23% minimum for income ≥ $142,000. Part-year residents receive a prorated credit based on days in NYC divided by 365.
Data sources:
Limitations: The IT-219 credit shown is an estimate. The actual IT-219 credit may differ because it is capped by your NYC personal income tax otherwise owed (which depends on your total NYC taxable income, not just business income). The calculator uses UBT taxable income as a proxy for NYC personal income taxable income, which may differ in practice. Always complete the actual Form IT-219 for your final return. Consult the official NYC forms or a licensed CPA for your final filing.
Last updated: August 2026
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