NYC UBT Calculator

NYC unincorporated business tax

What the UBT is and who pays it

New York City taxes unincorporated businesses: trades, professions and occupations carried on by an individual, a partnership, a limited liability company, an estate or a trust. If you work for yourself in the five boroughs as a freelancer, consultant or independent professional, your business is probably one of them, and the city charges 4% on the business's taxable income allocated to New York City. If you run two or more unincorporated businesses, the city treats them as one. The tax applies whether you live in the city or not, because it follows where the business is carried on.

Some people are outside the tax. Someone performing services as an employee does not owe it on that pay. Nor does an owner, lessee or fiduciary holding, leasing or managing real property for their own account, or a person, other than a dealer, who only buys, holds and sells property for their own account. An S corporation pays the city's general corporation tax instead. Individuals file Form NYC-202 or NYC-202S, single-member LLCs file NYC-202, and partnerships, including LLCs taxed as partnerships, file NYC-204.

How the tax is figured on Form NYC-202

Start with your business income and multiply it by the share of the business carried on in New York City; the calculator takes that share as a percentage, 100% if all the work is in the city. Subtract any city net operating loss deduction. From what is left you take an allowance for your own services of 20%, but not more than $10,000, and then a $5,000 exemption. If the business ran for less than a full year, the exemption is prorated at $416.67 for each whole month or $13.70 a day: nine full months give $3,750.03 and 263 days give $3,603.10. The tax is 4% of the result.

Then comes the business tax credit. If the 4% tax is $3,400 or less, the credit equals the tax and nothing is due. If it is $5,400 or more, there is no credit. In between, the credit is the tax times $5,400 minus the tax, divided by $2,000. The Department of Finance's own example: a $3,900 tax gets a $2,925 credit, leaving $975. On our calculation, a full-year sole proprietor with $100,000 of income in the city therefore owes no UBT, and the credit is gone at $150,000.

Our calculation for one business carried on entirely in New York City for the full year, with no net operating loss, using the Form NYC-202 method: the allowance for your services, the $5,000 exemption, 4% and the business tax credit.

The default example, $120,000 of net income, works out like this: the allowance is capped at $10,000, the exemption is $5,000, taxable income is $105,000 and the 4% tax is $4,200. That is between $3,400 and $5,400, so the credit is $4,200 times $1,200 divided by $2,000, or $2,520, and the UBT is $1,680.

Filing, due dates and estimated payments

You must file a UBT return if the total gross income from all your businesses, wherever carried on and before any deduction for the cost of goods sold or services performed, is more than $95,000. That test uses gross income, not profit, so you can owe nothing and still have to file. The calendar year 2025 return is due by April 15, 2026, and fiscal-year filers have until the 15th day of the fourth month after the year ends.

If your UBT after credits can reasonably be expected to exceed $3,400 for 2026, you must also file a declaration of estimated tax on Form NYC-5UBTI, due April 15, 2026 for calendar-year filers, with installments after that. If the requirement first arises after September 1, 2026, the declaration and all of the estimated tax are due January 15, 2027. On our calculation, a full-year sole proprietor with all of the business in the city crosses the $3,400 line at about $135,300 of net business income.

The resident credit on your New York return

If you live in New York City, part of the UBT comes back as a credit against your city personal income tax, claimed on Form IT-219. With city taxable income of $42,000 or less the credit is 100% of the UBT. Between $42,000 and $142,000 it slides down to 23%: you divide your income above $42,000 by $100,000, round to three decimals, multiply by 0.77 and subtract that from 100%. At $142,000 or more it is 23%. The credit cannot be more than your city income tax, and an unused credit is not refunded or carried over. Nonresidents do not get it.

IT-219 Worksheet B applied to the default example's UBT; the credit is also limited to your New York City resident tax.

In the default example the city taxable income is $100,000, so the credit share is 55.3% and the credit $929.71, bringing the real cost of the UBT down to $750.29. The calculator checks the credit against the city income tax on your taxable income from the New York City rate schedule, before the small household credit.

Other city taxes on self-employment income

The UBT is only one layer. City residents also pay the regular New York City income tax on the same profit, covered in the NYC income tax guide and the New York City salary calculator. Self-employed people with large net earnings in the city and its suburbs can also owe the Metropolitan Commuter Transportation Mobility Tax on their state return. For the federal side, see the self-employment tax calculator, the 1099-NEC tax calculator and the quarterly estimated taxes calculator; commuters can compare working in New York and living in New Jersey or Connecticut.