To fill out Form NYC-204, the Unincorporated Business Tax return for partnerships, start with your completed federal Form 1065, work through Schedule B on page 3 before touching Schedule A on page 1, apply the $5,000 exemption and (if applicable) the three-factor NYC allocation percentage, and e-file by March 16, 2026 for calendar-year 2025 returns. The return runs on a flat 4% rate, and a business tax credit zeroes out any liability of $3,400 or less.1New York City Department of Finance. Unincorporated Business Tax (UBT)
Confirm You Need the Full NYC-204
NYC-204 is for partnerships (general, limited, LLP, LLC taxed as a partnership federally, joint ventures, and similar unincorporated entities classified as partnerships for federal purposes) that carry on a trade or business in New York City and have more than $95,000 in total gross income from all sources, measured before cost of goods sold.2NYC Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return for Partnerships 2025 A partnership running a net loss still files if gross income clears $95,000.
Sole proprietors and single-member LLCs that the IRS disregards are on Form NYC-202, not this one.3NYC Department of Finance. Instructions for Form NYC-202 Unincorporated Business Tax Return 2025
Can You Use the Shorter NYC-204EZ?
The simplified NYC-204EZ is available only if your unincorporated business gross income (minus the active partners’ deduction) is $90,000 or less, you allocate 100% of income to NYC, and you have no investment income, net operating loss deductions, or credits.4NYC Department of Finance. NYC-204EZ 2025 Unincorporated Business Tax Return for Partnerships Partnerships that must add back pass-through entity taxes also have to use the full form. When in doubt, use the full NYC-204. Filing the long form when you qualified for the short one causes no issue; the reverse can get your return bounced.
What to Gather Before You Start
Have these items on your desk:
- A completed federal Form 1065 with Schedule K and all Schedules K-1. You will attach the federal return and schedules to the NYC-204 and transfer specific line items.2NYC Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return for Partnerships 2025
- Entity identification: legal name, address, EIN, entity type, and the date the business began (and ended, if applicable) operations in NYC.5NYC Department of Finance. NYC-204 2025 Unincorporated Business Tax Return for Partnerships
- Partner-level data: each partner’s name, identifying number, and distributive share of income.
- Allocation data if any business is done outside NYC: property values, payroll, and gross receipts both inside and outside the city.
- Any prior-year net operating loss carryovers or UBT paid credit carryforwards.
Work Schedule B First, Then Schedule A
The form is laid out with the tax computation (Schedule A) on page 1, but you cannot complete it until Schedule B on page 3 produces the income figure. Start on page 3.
Schedule B, Part 1 pulls business income, gain, loss, and deduction from your federal return. The first line takes ordinary income from Form 1065 line 22. Separate lines capture net rental real estate income, portfolio income, guaranteed payments to partners, and other items drawn from Schedule K. Line 8 is where you reconcile federal-only deductions NYC disallows (or NYC items the federal return omitted).2NYC Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return for Partnerships 2025
Part 2 is NYC-specific modifications. Typical additions: income taxes and UBT previously deducted federally, New York State and NYC pass-through entity taxes deducted federally, and federal bonus depreciation adjustments. Typical subtractions: refunds of income tax and UBT that landed in federal income, and wages for which federal employment credits were claimed. If none apply, the Part 1 total passes through to line 26 unchanged.
With Schedule B done, flip back to Schedule A. The total from Schedule B feeds line 11, and from there you move through the active partners’ deduction, the $5,000 exemption, the allocation percentage (if you need one), and the 4% rate.
The Active Partners’ Deduction on Line 13
Line 13 lets the partnership deduct reasonable compensation for partners who personally work in the business. The deduction is the lower of 20% of net income from line 12 or $10,000 per active partner.2NYC Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return for Partnerships 2025 If line 12 is a loss, enter zero. The deduction does not depend on what partners actually withdrew during the year.
Allocation Percentage for Multi-Location Partnerships
Operating only within NYC? Allocate 100% and move on. If any business is done outside the city, build an allocation percentage by averaging three ratios:6New York City Rules. 19 RCNY 28-07 – Allocation to New York City
- Property: average value of real and tangible personal property in NYC over average value everywhere.
- Payroll: wages, salaries, and compensation of employees in NYC (excluding general executive officers) over the same total everywhere.
- Gross income: gross sales, receipts from services, rentals, royalties, and other business receipts earned in NYC over the same categories everywhere.
Average the three. Multiply net income by that percentage to get the amount subject to UBT. Keep documentation for every factor; the Department of Finance can ask how you split property values, assigned payroll, or sourced receipts.
Exemption, Rate, and the Small-Business Credit
Before applying the rate, subtract the $5,000 specific exemption. If the business was active less than a full 12-month year, prorate at $13.70 per day or $416.67 per month.7New York City Rules. 19 RCNY 28-09 – Unincorporated Business Exemptions Apply the 4% rate.8NYC Administrative Code 0.0.1 documentation. New York City Administrative Code Title 11 Chapter 5 – Section 11-503
Then apply the business tax credit. If the computed UBT is $3,400 or less, the credit wipes it out entirely. Liabilities between $3,401 and $5,400 get a partial credit that phases out as the tax rises.1New York City Department of Finance. Unincorporated Business Tax (UBT) Many smaller partnerships file the return and owe nothing after this credit.
If your partnership is itself a partner in another partnership that paid UBT on the same income, look at Form NYC-114.7 to claim the UBT paid credit and avoid double taxation.9New York City Department of Finance. UBT Paid Credit – Unincorporated Business Taxpayers
When and How to File
Calendar-year 2025 returns are due March 16, 2026. Fiscal-year filers file by the 15th day of the third month after the close of the taxable year.2NYC Department of Finance. Instructions for Form NYC-204 Unincorporated Business Tax Return for Partnerships 2025
NYC-204 is on the Department of Finance’s mandatory e-file list. Approved tax software transmits the federal Form 1065 and the NYC-204 together through the IRS Federal and State Modernized e-File program; the city retrieves the NYC portion from the IRS gateway, and the IRS received date governs timeliness.10NYC Department of Finance. Business Tax e-File
For payments made with an e-filed return, you can use ACH debit (the debit information goes in with the return data), ACH credit, or fed wire. You can also pay through the eServices portal at nyc.gov/eservices.11NYC Department of Finance. Business Tax e-File Frequently Asked Questions
Paying by check? Do not staple it to the return. Mail Form NYC-200V with your check, payable to “New York City Department of Finance,” to:12NYC Department of Finance. Payment Voucher NYC-200V
NYC Department of Finance
P.O. Box 3933
New York, NY 10008-3933
Postmark it by the due date.
Need More Time? File NYC-EXT
If you cannot finish by the deadline, file Form NYC-EXT by the original due date for an automatic six-month extension (September 15, 2026 for calendar-year 2025 returns). The extension covers only the filing; you still have to estimate your UBT and pay it with NYC-EXT. Interest runs on anything you underpay from the original due date forward.13NYC Department of Finance. Form NYC-EXT 2025 Partnerships cannot stack additional three-month extensions on top the way corporate filers can.
What Late Filing Costs
Filing late adds 5% of the net tax owed per month (or partial month), capped at 25% after five months.14Department of Finance. Business Filing Information Interest on unpaid tax runs separately from the original due date and resets quarterly; the rate is 11% for January through March 2026 and 10% for April through June 2026.15New York City Department of Finance. Interest Rates on Tax Underpayments If you obtained a valid NYC-EXT and paid your estimated tax in full with it, only interest applies to any remaining balance, not the late filing penalty.13NYC Department of Finance. Form NYC-EXT 2025
One last thing to flag for next year: if your UBT after credits is expected to exceed $3,400, the city expects quarterly estimated payments on Form NYC-5UBTI (April 15, June 15, September 15, and January 15 for calendar-year filers), with interest charged on any underpayment during the year.16NYC Department of Finance. Declaration of Estimated Unincorporated Business Tax 2026 If this year’s return pushes you past that line, build those payments into your plan for the next cycle.