This guest article by Troutman Pepper partner Thomas Gray discusses the implementation of the New York City pass-through entity tax (NYC PTET). Individuals employed by private fund managers who reside in New York City and have an interest in an eligible partnership or Subchapter S corporation should consider the benefits of the NYC PTET, which applies to tax years beginning on or after January 1, 2022. The NYC PTET election for the 2022 tax year must be made by March 15, 2023. For those eligible entities, the NYC PTET can help reduce a partner’s or shareholder’s allocable share of the entity’s federal taxable income and be used as a work-around to the $10,000 limitation on the federal deduction of an individual’s state and local taxes. For more tax insights from Troutman Pepper attorneys, see our two-part series “Tax Considerations for Sovereign Wealth Funds’ Investments in Hedge Funds”: Part One (Sep. 8, 2022); and Part Two (Sep. 15, 2022).