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New York City decouples from certain CARES Act tax relief provisions

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June 2020


Governor Andrew Cuomo (D) signed legislation (S8411, A1059) on June 17 under which several New York City taxes decouple from certain federal CARES Act tax relief provisions. In doing so, the legislation amends provisions of this year’s state budget bill under which the NYC unincorporated business tax (UBT) decoupled from the federal CARES Act provision under IRC §163(j)(10)(A)(i).

The takeaway

Tax amendments independent of the state budget bill are a rarity in New York. This bill reflects the dire fiscal situation facing New York City. This legislation creates additional complexity in that parallel changes were not adopted for state tax purposes (although New York State already decoupled from the CARES Act for personal income tax and partnership purposes).  As New York State and City grapple with budget shortfalls and changes in the overall economy as a result of COVID-19, additional revenue-raisers may be enacted.

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Peter Michalowski

State and Local Tax Leader, PwC US

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