22 April 2026

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NYSDA Opposes Proposed PTET Credit Reductions

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The New York State Dental Association (NYSDA) today called on state lawmakers to reject proposed reductions to the pass-through entity tax (PTET) credit included in the New York State Legislature’s one-house budget bills, warning that the changes would amount to a significant tax increase on dental practices and other licensed professionals across New York.

Key details

NYSDA is joined in its opposition by the Medical Society of the State of New York, the New York State Podiatric Medical Association, the New York State Association of Ambulatory Surgery Centers, the New York State Academy of Nutrition and Dietetics, and a broad coalition of other medical specialty associations, all of which rely on the PTET framework to maintain fair and predictable taxation.

“Reducing the PTET credit undermines the very purpose of the tax policy and places an unnecessary burden on New York’s licensed professionals,” said Michael Herrmann, Executive Director of NYSDA. “Dentists, like many small business owners, depend on stable tax policy to manage rising costs, invest in modern equipment, and provide high-quality care to their patients. This proposal would take us in the wrong direction.”

The PTET system, adopted in 2021 following federal limits on state and local tax (SALT) deductions, was designed to ensure parity between pass-through entities and C corporations by allowing a full, dollar-for-dollar credit for taxes paid at the entity level. The Legislature’s proposal to reduce that credit would effectively reintroduce double taxation on professional income.

For dental practices, many of which are small or mid-sized businesses, the impact would be immediate. Increased tax liability would reduce resources available for hiring staff, upgrading technology, and expanding patient services. At a time when practices are already facing workforce shortages, inflationary pressures, and rising compliance costs, NYSDA warns that additional financial strain could limit access to care in New York, particularly in rural and underserved communities.

What this means for the market

“Dental practices are not large corporations with flexible capital structures,” Herrmann added. “They are community-based providers delivering essential healthcare. Policies that weaken their financial stability ultimately negatively affect patients and local economies.”

The coalition also emphasized the broader economic implications of the proposal. Licensed professionals are increasingly mobile, and higher effective tax rates could accelerate relocation from New York, further straining the state’s healthcare system and professional workforce.

NYSDA and its partners argue that the proposed PTET changes are inconsistent with the state’s commitment to avoid raising income taxes. While framed as technical adjustments, they contend the reductions would function as a substantive tax increase on income that has already been taxed at the entity level.

Since its enactment, the PTET has provided critical stability and predictability, enabling professional practices to plan long-term investments and sustain operations. Altering the policy now, the group warns, would send a troubling signal about New York’s economic competitiveness and commitment to its professional workforce.

The New York State Dental Association urges lawmakers to preserve the PTET structure in its current form, maintaining full, dollar-for-dollar credits at both the state and city levels.

For more information on NYSDA, please visit nysdental.org .

About the New York State Dental Association:

The New York State Dental Association, founded in 1868, is one of the largest state constituents of the American Dental Association and represents more than 60 percent of dentists practicing in New York State. Founded in 1859, the American Dental Association is the oldest and largest national dental society in the world and serves as the leading source of oral health-related information for dentists and their patients.