Form NYC-204 Partnership Return: Schedules, Credits, and Filing

To fill out Form NYC-204, start with your completed federal Form 1065 in hand, then work the New York City return’s schedules in the order the Department of Finance intends: Schedule B to compute total income with the city’s required modifications, Schedule E to allocate that income to New York City, and Schedule A to apply the 4% Unincorporated Business Tax rate and any credits.¹ The calendar-year 2025 return is due March 16, 2026, because March 15 falls on a Sunday.²

Before going further, confirm the form applies to you. Partnerships, multi-member LLCs taxed as partnerships, joint ventures, and similar organizations must file NYC-204 if they carry on any trade, business, or profession wholly or partly within New York City and total gross income from the business, before cost of goods sold or services, exceeds $95,000. Filing is also required if the entity has any unincorporated business taxable income, even without hitting that gross income threshold.³ Entities based outside the five boroughs are included if they derive income from NYC sources.⁴

What to Have in Front of You

The city form reads straight off the federal return, so finish Form 1065 first. The NYC-204 instructions require you to attach the complete federal 1065 and all its schedules.⁵ Pull these together before you open the city form:

The federal Form 1065 with every schedule and each partner’s K-1.
The partnership’s EIN for the header.
The same six-digit NAICS code you used federally.
A receipts breakdown separating New York City from everywhere else, if the business operates in more than one place. You need this for Schedule E.
Your prior-year NYC-204, which you need if you want to rely on last year’s liability as a safe harbor.

The blank 2025 form is on the Department of Finance site as a PDF.²

Schedule B: Total Income With NYC Modifications

Schedule B is where you start. Part 1, Lines 1 through 10, lift figures directly from your federal 1065 and its Schedule K: ordinary business income or loss on Line 1, net rental real estate income on Line 2, portfolio income on Line 3, guaranteed payments to partners on Line 4. Line 8 is reserved for deductions on the federal return that New York City disallows, and Line 9 picks up any remaining partner distributive share items reported separately on the K-1s.⁵ Total Part 1 on Line 12, then move into Part 2 for the city additions and subtractions, landing on total business income at Line 26.

Add-Backs You Cannot Skip

The modifications are where the city return genuinely departs from the federal one. The common ones:

Income taxes imposed by New York City, New York State, or any other jurisdiction are not deductible. That includes the NYC pass-through entity tax, the NYS PTET, and comparable taxes paid to other states.⁶
Amounts paid to a partner for services or for the use of capital are not deductible, except as the code specifically permits.⁶
Bonus depreciation under IRC § 168(k) is disallowed. The city has decoupled, so you recompute depreciation as if the property had been placed in service before September 11, 2001, with limited exceptions for qualified Liberty Zone and Resurgence Zone property.⁷
Long-term capital gains get no preferential treatment. The excess of net long-term capital gain over net short-term capital loss is not deductible. Capital losses, by contrast, are treated as ordinary and allowed in full.⁶

On the subtraction side, Schedule B gives you a $5,000 annual specific exemption against unincorporated business taxable income. For a short tax year, prorate at $13.70 per day or $416.67 per month.⁸

Schedule E: Allocating Income to the City

If every dollar of business activity happens inside the five boroughs, write 100% on Schedule E, Part 3, Line 2, and you are done with allocation. If the partnership also operates outside the city, you allocate using a single receipts factor: NYC gross income divided by total gross income. For tax years beginning in 2012 and later, this is the only allocation method.⁷ The resulting percentage carries over to Schedule A and applies to taxable income. Clean records of where each receipt was earned matter more than almost anything else on this return once the business crosses the city line.

Schedule A: Running the Tax Computation

Schedule A is where the pieces come together. Pull the figures from Schedules B and E, apply the 4% UBT rate on Line 17, and claim the business tax credit on Line 18.¹ Any other credits the partnership qualifies for, such as the Made in NYC Film Production Credit, come in on Schedule A before you reach the final liability.

The Small Business Credit Often Zeroes the Bill

The built-in small business credit is strong enough to erase the tax entirely for many smaller partnerships:

Tax of $3,400 or less: the credit equals the full tax, so nothing is owed.
Tax between $3,401 and $5,399: a sliding credit of tax × ($5,400 − tax) ÷ $2,000.
Tax of $5,400 or more: no credit.

The $3,400 cutoff corresponds to roughly $90,000 of allocated taxable income after the $5,000 exemption, so a fair number of city partnerships file and owe nothing.⁷ The credit does not excuse filing; if you meet the gross income or taxable income thresholds, the return is still required.

Filing and Paying

Most filers submit the return electronically through the Department of Finance’s Business Tax e-File (BTeF) system. E-filing is mandatory for preparers who have prepared more than 100 NYC business tax documents and used tax software, and for businesses that self-file using Department-approved software. NYC-204 is covered by the mandate. A hardship waiver can be requested from BTeFile if you fall under the mandate and need to file on paper; everyone else may e-file through e-Services or mail a paper return.⁹

Paper filers mail the return to one of three P.O. boxes depending on whether a payment, a refund claim, or neither is involved. The current addresses are printed on the first page of the 2025 form.² If you owe a balance on a paper return, send the check separately with Form NYC-200V (Payment Voucher) rather than tucking it inside the return, made payable to the New York City Department of Finance. The voucher and payment must be postmarked by the return’s due date to avoid a late-payment penalty.¹⁰ If you e-filed but did not pay at the same time, you can either mail a paper NYC-200V with a check or file the voucher and pay through e-Services.

Calendar-year partnerships file the 2025 return by March 16, 2026. Fiscal-year filers have until the 15th day of the third month after the close of their fiscal year.²

If You Need More Time

Form NYC-EXT gives you an automatic six-month extension to file, but it has to be submitted by the original due date and it is only an extension of time to file. Payment is still due now, and you must estimate the tax and remit any balance with the extension request.¹¹

For the extension payment to qualify as “properly estimated,” it must equal at least 90% of the tax as finally determined, or at least the tax shown on the prior year’s return if that year was a full 12 months. Partnerships that reported $1,000,000 or more in city-allocated taxable income in any of the three preceding years cannot use the prior-year safe harbor and must meet the 90% test. No further extensions are available beyond the automatic six months.¹¹

What a Late Return Costs

Failure to file without a valid extension carries a penalty of 5% of the tax due for the first month or part of a month, plus 5% for each additional month, capped at 25%. More than 60 days late, and the minimum penalty is the lesser of $100 or 100% of the tax owed. The penalties can be avoided only on a showing of reasonable cause and the absence of willful neglect.¹² Interest runs on top at a rate set periodically by the Commissioner of Finance and compounds on any unpaid balance, so a return that is only a few months overdue can swell by 15% to 20% quickly.

1
NYC Department of Finance. NYC-204 – 2024 – Unincorporated Business Tax Return for Partnerships
2
NYC Department of Finance. NYC-204 – 2025 – Unincorporated Business Tax Return for Partnerships
3
New York City Administrative Code. New York City Administrative Code 11-514 – Returns, Payment of Tax
4
New York City Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return
5
NYC Department of Finance. Instructions for Form NYC-204 – Unincorporated Business Tax Return
6
American Legal Publishing. New York City Administrative Code 11-507 – Unincorporated Business Deductions
7
New York City Department of Finance. Instructions for Form NYC-204 – Unincorporated Business Tax Return for Partnerships
8
American Legal Publishing. New York City Rules 28-09 – Unincorporated Business Exemptions
9
NYC Department of Finance. Business Tax e-File
10
NYC Department of Finance. Payment Voucher NYC-200V
11
NYC Department of Finance. Application for Automatic Extension of Time to File Business Income Tax Returns
12
Justia. New York City Administrative Code 11-525 – Additions to Tax and Civil Penalties