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Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs)

A limited liability company (LLC) is an unincorporated organization of one or more members, each having limited liability for the contractual and other liabilities of the company, formed for any lawful business purpose under the Limited Liability Company Law of New York State or any other jurisdiction.

A limited liability partnership (LLP) is a partnership that provides professional services and has registered as a limited liability partnership under Article 8-B of the Partnership Law of New York State or under the laws of another jurisdiction.

Tax treatment of LLCs and LLPs

  • The New York personal income tax and the corporate franchise tax conform to the federal income tax classification of LLCs and LLPs. 
     
    • An LLC or LLP that is treated as a partnership for federal income tax purposes will be treated as a partnership for New York tax purposes.
    • An LLC or LLP that is treated as a corporation, including an S corporation, for federal income tax purposes will be treated as a corporation for New York tax purposes or as a New York S corporation if the New York S election is made.
       
  • A single-member LLC (SMLLC) may choose to be taxed as a corporation, including an S corporation, or to be disregarded as an entity for federal income tax purposes.
     
    • If the LLC is disregarded and the single member is an individual, the LLC will be treated as a sole proprietorship for New York tax purposes. 
    • If the LLC is disregarded and the single member is a corporation, including an S corporation, the LLC will be considered part of the corporation for New York tax purposes.
       
  • For information regarding the tax treatment of an LLC or LLP for purposes of the New York City General Corporation Tax (GCT) and the New York City Unincorporated Business Tax (UBT) is provided in the New York City Department of Finance Memorandum 99-1.

Tax responsibilities

  • An LLC that is treated as a sole proprietorship must report its business income and expenses on the individual's New York State personal income tax returns.
  • An LLC or LLP that is treated as a C corporation for federal income tax purposes or that has elected both federal and New York State S corporation status must file a New York State corporation franchise tax return.

For more information see:

Updated: February 07, 2013