The city tax for each kind of business
| Your business | City tax | Rate | City return | Due for a calendar year |
|---|---|---|---|---|
| Sole proprietor or single-member LLC | Unincorporated business tax | 4% | NYC-202 | April 15 |
| Partnership or LLC taxed as a partnership | Unincorporated business tax | 4% | NYC-204 (or NYC-204EZ) | March 15 |
| S corporation, or LLC taxed as one | General corporation tax | 8.85% of net income, or a larger alternative | NYC-4S, NYC-4S-EZ or NYC-3L | March 15 |
| C corporation | Business corporation tax | 6.5% to 8.85% | NYC-2, NYC-2S or NYC-2A | April 15 |
Figures in this guide are from the 2025 instructions, the latest published. Sources: NYC-202 instructions, NYC-204 instructions, NYC-4S instructions, NYC-2 instructions. A due date on a weekend moves to the next business day: for the 2025 tax year, the March returns were due March 16, 2026.
The unincorporated business tax
Who files. Any individual or unincorporated business that carries on a trade, business or profession wholly or partly in New York City files if its gross income from all its business, wherever earned, is more than $95,000 before cost of goods sold (NYC-202 instructions). Lawyers, doctors, architects and other professionals are included (nyc.gov).
Who does not. Employees on their wages; people who only buy, hold and sell property or securities for their own account; and owners who only hold, lease or manage their own real property (nyc.gov). Owning a rental building is not a business for this tax.
How it is figured. From the business’s city income, subtract:
- an allowance for the owners’ own work: 20% of income, up to $10,000 for a proprietor or for each active partner;
- an exemption of $5,000.
The rest is taxed at 4%. Then a credit cuts small bills: if the tax is $3,400 or less, the credit wipes it out; between $3,400 and $5,400, part of it is credited; at $5,400 or more there is no credit (NYC-202 instructions).
Estimated tax. A business that expects more than $3,400 of tax for the year pays it in four parts; for 2027, on April 15, June 15 and September 15, 2027 and January 18, 2028 — on Form NYC-5UB for a partnership and NYC-5UBTI for an individual (NYC-5UB).
City residents who pay the tax as sole proprietors, or as partners on their share of a partnership’s tax, get a credit for part of it against their city personal income tax: all of it at city taxable income of $42,000 or less, falling to 23% at $142,000 (IT-219 instructions), and less from $1 million starting with 2026 (Local Law 133 of 2026).
S corporations: the general corporation tax
New York City has no S corporation election and does not recognize the state one (nyc.gov). An S corporation that does business in the city pays the general corporation tax on whichever of these is largest (Form NYC-4S):
- 8.85% of its city net income;
- 0.15% of its capital;
- 8.85% of 15% of net income plus the pay of shareholders owning more than 5%, after a $40,000 exclusion;
- a fixed minimum set by city receipts: $25 up to $100,000, $75 up to $250,000, $175 up to $500,000, $500 up to $1 million, $1,500 up to $5 million, $3,500 up to $25 million and $5,000 above (NYC-4S instructions).
A corporation with gross income under $250,000, all of its business in the city and no investment capital pays only the larger of the 8.85% tax and the minimum, and can file the short NYC-4S-EZ. One with business outside the city as well, or one that must add back PTET it deducted federally, files NYC-3L (NYC-4S instructions).
If the year’s tax is expected to exceed $1,000, it pays estimated tax: when last year’s tax was over $1,000, 25% of it with the return or extension by March 15, and the rest on Form NYC-400 on June 15, September 15 and December 15. There is no January payment (NYC-400).
C corporations: the business corporation tax
A C corporation pays the largest of a tax on its business income, a tax on capital and a fixed minimum. The income rate is 6.5% when the business income allocated to the city is under $1 million and total business income is under $2 million, rising to 8.85% as income grows; qualified manufacturers pay from 4.425% (nyc.gov; Form NYC-2). It files NYC-2 or the short NYC-2S by April 15 (NYC-2 instructions). Once the tax passes $1,000, it pays 25% of the tax of two years earlier on Form NYC-300 by March 15, a month before its return, and the rest on NYC-400 on June 15, September 15 and December 15 (NYC-300).
Filing late
A late city return adds 5% of the unpaid tax for each month or part of a month, up to 25%, plus a late payment charge and interest (NYC-204 instructions).
The commercial rent tax: not in Brooklyn
The commercial rent tax applies only to tenants in Manhattan south of 96th Street whose rent is $250,000 a year or more (nyc.gov). A Brooklyn shop or office does not pay it, whatever the rent.
Example: a Brooklyn partnership with $250,000 of profit
A two-partner design firm in Brooklyn, both partners active, earns $250,000 of net income, all of it in the city.
- Allowance for the partners’ work: the lower of 20% of $250,000 ($50,000) or $10,000 for each of two partners — $20,000.
- Exemption: $5,000.
- Taxable: $250,000 − $20,000 − $5,000 = $225,000.
- Tax: 4% × $225,000 = $9,000. That is above $5,400, so no credit applies. The firm owes $9,000, paid through quarterly estimates, and files NYC-204 by March 15, 2027.
Compare a Brooklyn freelancer with $100,000 of net income. They file, since gross income is over $95,000. Their allowance is $10,000, the exemption is $5,000, and the tax is 4% × $85,000 = $3,400. The credit covers all of it, and they owe $0.
For the state and federal dates that go with these returns, see the New York tax deadlines guide. For help with the returns, see tax filing.
Questions
I work from home in Brooklyn for clients outside the city. Do I owe the unincorporated business tax?
You file if your gross income is over $95,000, and owe tax if it comes to more than $3,400 after the allowance and exemption. The tax follows where you carry on the business, and your home office is in the city. If you carry on business only in the city, all of its income is allocated to the city; if you also carry on business outside it, a share is allocated out by a formula (NYC-202 instructions).
Does the city tax still apply if my business elects PTET?
Yes. PTET is an income tax paid for the owners; it does not replace the unincorporated business tax or the general corporation tax. A partnership or S corporation adds the PTET it deducted federally back into its city income, and an S corporation that does so files NYC-3L (NYC-204 instructions; NYC-4S instructions).
Is a freelancer a business for the city?
Yes. A freelancer or independent contractor carries on a business or profession: it files once gross income is over $95,000, and owes tax once the tax comes to more than $3,400. Only wages you earn as an employee are outside it.
Do I pay commercial rent tax in Brooklyn?
No. The commercial rent tax applies only to rented space in Manhattan south of 96th Street.