Form CT-2658-E: Exemption Certificate for Corporate Partners’ Estimated Tax

Form CT-2658-E is a certificate that a corporate partner files with a partnership or LLC doing business in New York State to claim exemption from the estimated tax payments the partnership would otherwise have to make on that partner’s behalf. Instead of the partnership paying quarterly estimated tax to New York for the corporation’s share of income, the corporation certifies that it will handle its own New York tax obligations directly.

New York requires partnerships and LLCs treated as partnerships to make estimated personal income tax or corporation franchise tax payments on behalf of partners who aren’t residents and don’t otherwise have a filing presence in the state. Corporate partners can avoid having this money withheld and remitted quarterly by submitting Form CT-2658-E to the partnership, confirming they’ll report and pay their own share of New York tax through their corporate franchise tax return.

Who Needs to File Form CT-2658-E

This form is intended for C corporations that are partners in a partnership, or members of an LLC treated as a partnership, doing business in New York. To qualify for the exemption, the corporate partner must:

• Be subject to New York State corporation franchise tax (Article 9-A) and agree to file the required returns
• Not be exempt from tax under the Internal Revenue Code in a way that would eliminate its New York filing obligation
• Certify it will report its distributive or pro rata share of partnership income on its own franchise tax return

S corporations and individual partners don’t use this form — CT-2658-E is specific to corporate partners subject to the corporation franchise tax. Individual and other non-corporate partners have separate exemption certificates under different rules.

When the Form Is Used

The partnership or LLC keeps Form CT-2658-E on file rather than submitting it to the Department of Taxation and Finance directly. It’s typically completed at the start of the partnership’s tax year or as soon as a corporate partner is admitted, and it stays in effect for the tax year in which it’s signed unless circumstances change. If a corporate partner’s exemption status changes — for example, it no longer intends to file its own New York return — the partnership needs updated information to resume estimated tax payments on that partner’s behalf.

Partnerships should collect this certificate before making any estimated payments for the year, since it determines whether that partner’s share needs to be included in the quarterly estimated tax calculation. Without a valid CT-2658-E on file, the partnership is expected to withhold and remit estimated tax for that corporate partner just as it would for any other nonresident partner.

How to Complete and Use the Form

Form CT-2658-E is a fillable PDF released by the New York State Department of Taxation and Finance, so it can be completed on a computer before printing and signing. The form asks for basic identifying information about the corporate partner (name, address, employer identification number) and the partnership or LLC receiving the certificate. An authorized officer of the corporation signs the form to certify the exemption claim.

Once completed, the corporate partner sends the signed form to the partnership or LLC — not to the state. The partnership retains it in its records to support not withholding estimated tax for that partner, and it may need to produce the certificate if the Department of Taxation and Finance questions the partnership’s estimated tax filings.

Corporations that do business in multiple states often juggle similar exemption and estimated payment rules elsewhere. If your corporation also has California filing obligations, articles like Form 100X for amended California corporate returns or FTB Form 3536 for estimated LLC fees cover comparable estimated tax mechanics on the West Coast. And if the corporate partner is itself organized as an LLC, FTB Form 3522 instructions explain the parallel California LLC tax voucher requirement.

Because CT-2658-E affects how much estimated tax a partnership sets aside each quarter, it’s worth reviewing annually, especially when a corporate partner’s business structure, residency status, or filing obligations change. Keeping the certificate current avoids both underpayment penalties for the partnership and unnecessary withholding for the corporate partner.