New York Combined Return Rules Begin to Gain Clarity

In the last 30 years, perhaps the most contentious New York corporate tax issue centered on which entities should be included in a New York combined return. The confusion around the “distortion” test served as a full-time job for practitioners and state and city tax auditors and attorneys. That all changed radically in 2015 with New York State’s corporate tax reform legislation that included the adoption of mandatory unitary combined group reporting. 

Under the legislation, combined reporting is required if the taxpayer is engaged in a unitary business and one of three 50% common ownership tests is met. New York City conformed to the State’s legislation during 2015 for years beginning on or after January 1, 2015.

The due date for 2016 New York combined returns (and separate filing corporations) with a calendar year end is April 15, 2017.