See how working from home—outside of NYC—can save thousands in unincorporated business tax with Topia’s online calculator.
For decades, New York City has imposed its 4% Solution on partnerships, LLCs, and sole proprietorships. Such entities owe a 4% unincorporated business tax on their income.
New York City Employees Working Remotely
However, UBT is a city tax, not a state or federal tax. Money earned outside of NYC avoids UBT. If your company has many people working from home these days, and their homes are outside the city, UBT doesn’t apply to a portion of their income.
How much tax can you save by downsizing UBT? Thousands, tens of thousands, even millions of dollars. To see how your firm might benefit, go to Topia’s NYC UBT Savings Calculator, at https://www.topia.com/solutions/distributed-workforce/local-taxes/nyc-unincorporated-business-tax/
Calculating your Unincorporated Business Tax Savings
Suppose a hypothetical XYZ Capital Partners has $2 million of annual gross receipts. At 4%, the UBT bill would be $80,000.
To see the potential tax savings on Topia’s online calculator, slide the percentage of days worked outside of NYC to, say, 24%. That would give XYZ Capital Partners $19,000 in potential UBT tax savings.
But suppose the percentage of days worked outside of NYC increases to, say, 59%. That would boost the UBT tax savings to $47,000, as per our calculator.
The more work days away from the city, the lower your company’s obligation to pay UBT.
See how much you can save on UBT. Try our Calculator!
Monitoring your employee footprint
How can a non-corporate NYC entity find the percentage of employee work days out of the city, with so many people working from home these days? Homes that might be inside or outside of NYC?
Topia’s distributed workforce and business travel compliance management app, Topia Compass, is a secure piece of software for tracking those employees. Whether each individual is working in the office, in an NYC residence, WFH outside of the city, or on a business trip, Compass pinpoints and records that work day location.
Once the amount of non-NYC work is determined, the amount of entity income can be proportionately reduced. Your firm can pay less—much less—in UBT and, if your UBT payment is ever challenged in a tax audit, you’ll have Topia Compass’ audit-ready records to show exactly where each employee earned his or her pay, day by day.
Hear from the tax experts as they discuss UBT and your opportunity for savings.
Note: This content supports Topia’s marketing efforts and is not written tax advice directed at the particular facts and circumstances of any person. The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Topia to the reader.