Are You Ready for the New York LLC Transparency Act Starting January 1, 2026?

Are You Ready for the New York LLC Transparency Act Starting January 1, 2026? Episode 361 – The effective date of the New York Limited Liability Company Transparency Act, January 1, 2026, is nearly upon us. If your business was created in, or authorized to do business in, New York, you may be affected. If so, are you prepared to comply with its mandates and regulations? More SML Planning Minute Podcast Episodes Transcript of Podcast Episode 361 On January 1, 2021, the National Defense Authorization Act of 2021 (NDAA) was passed. Included in the NDAA was the Corporate Transparency Act (CTA) designed to develop a more robust regulatory framework to combat money laundering and tax evasion activities using potentially anonymous entities.  The main requirement of the CTA is the full disclosure of the identities of the individual owners of an entity, or those who control the entity as beneficial owners. Reporting occurs when the entity is created or when there is a change of ownership or control. The CTA would also create a national registry of entities and their owners.[i] The effective date was January 1, 2024. Failure to comply with the CTA would result in severe civil and criminal penalties, including fines of $500 per day up to $10,000 and up to two years of imprisonment.[ii] At the time, however, many legal commentators and at least one federal court, believed the CTA overreached and was unconstitutional.[iii]  On March 2, 2025, the U.S. Department of the Treasury (Treasury Department) announced that “not only will it not enforce any penalties or fines associated with the beneficial ownership information reporting rule under the existing regulatory deadlines, but it will further not enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect either. The Treasury Department will further be issuing a proposed rulemaking that will narrow the scope of the rule to foreign reporting companies only. Treasury takes this step in the interest of supporting hard-working American taxpayers and small businesses and ensuring that the rule is appropriately tailored to advance the public interest.”[iv] On March 21, 2025, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an Interim Final Rule adopting these changes. New York created similar legislation known as the New York Limited Liability Company Transparency Act (NYLTA) on December 23, 2023, modeled after the CTA, and effective specifically against limited liability companies (LLCs) created in, or authorized to do business in, New York. There are some exceptions such as banks or other highly regulated industries and publicly traded companies. On March 1, 2024, in anticipation of changes to the rules, regulations and interpretation of the federal CTA, New York repealed the original NYLTA and replaced it with the current version. The NYLTA created its own framework and definitions to remove any ties with the federal CTA.[v] Accordingly, notwithstanding the changes in the federal CTA, New York has not changed its requirements for the NYLTA. Starting January 1, 2026, LLCs formed in New York or LLCs created in other jurisdictions, whether domestic or foreign, but authorized to do business in New York, must comply with NYLTA.  Existing LLCs formed or registered prior to January 1, 2026, have one year to file an initial beneficial ownership information (BOI) report with the New York Department of State (NYDOS). New LLCs formed or registered on or after January 1, 2026, have 30 days to file their BOI. Penalties for failure to comply can include daily fines of up to $500 and potentially suspension of business authorization or dissolution of the LLC. Unlike the federal CTA, exempt companies must still file an attestation of exemption with the NYDOS within 30 days of the LLCs formation or qualification to do business in New York. As of this podcast, New York has not yet issued final implementation guidance nor has it released its BOI filing portal. The provisions, rules, regulations and requirements of the CTA and the NYLTA are complicated. If you’re a business owner, consult with your own tax and legal advisors to determine if, and how, these laws might impact your individual business. [i] H.R. 2513 (116th): Corporate Transparency Act of 2019 [ii] H.R. 2513 (116th): Corporate Transparency Act of 2019 [iii] Erskine, Matthew. “Corporate Transparency Act Ruled Unconstitutional by Federal District Court.” Forbes.com. https://www.forbes.com/sites/matthewerskine/2024/03/04/corporate-transparency-act-ruled-unconstitutional-by-federal-district-court/ (accessed 11/5/2025). [iv] U.S. Department of the Treasury. “Treasury Department Announces Suspension of Enforcement of Corporate Transparency Act Against U.S. Citizens and Domestic Reporting Companies.” Home.treasury.gov. https://home.treasury.gov/news/press-releases/sb0038 (accessed 11/5/2025). [v] New York Limited Liability Company Transparency Act, S.B. 8059 More SML Planning Minute Podcast Episodes This podcast is brought to you by Security Mutual Life Insurance Company of New York, The Company That Cares®. The content provided is intended for educational and informational purposes only. Information is provided in good faith. However, the Company makes no representation or warranty of any kind regarding the accuracy, reliability, or completeness of the information. The information presented is designed to provide general information regarding the subject matter covered. It is not to serve as legal, tax or other financial advice related to individual situations, because each individual’s legal, tax and financial situation is different. Specific advice needs to be tailored to your situation. Therefore, please consult with your own attorney, tax professional and/or other advisors regarding your specific situation. To help reach your goals, you need a skilled professional by your side. Contact your local Security Mutual life insurance advisor today. As part of the planning process, he or she will coordinate with your other advisors as needed to help you achieve your financial goals and objectives. For more information, visit us at SMLNY.com/SMLPodcast. 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