Since the NYC UBT credit is a state-specific adjustment, it does not typically "flow" automatically from the Federal K-1 entry. You must navigate to the New York state interview:
- Start the New York State Return: Go to the State Taxes tab and begin or revisit your New York resident return.
- Continue through the interview until you reach the screen titled "Take a Look at New York Credits and Taxes".
- Under the "NYC and Metro Commuter Taxes" section, look for "Credit for NYC Unincorporated Business Tax (IT-219)".
- Select Start or Revisit. You will need to provide the Partnership Name and EIN from your K-1 and your distributive share of the NYC UBT paid by the partnership. This is often provided in a supplemental statement or "Attachment" to your K-1, rather than a numbered box.
The credit amount depends on your taxable income. If your NYC taxable income is $42,000 or less, the credit is 100% of the UBT paid. It scales down to 23% for incomes of $142,000 or more. This is a non-refundable credit. It can reduce your NYC personal income tax to zero, but any excess cannot be refunded or carried over to future years.
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