Section 11-1711
§ 11-1711 City taxable income of a city resident individual. (a)
General. The city taxable income of a city resident individual shall be
his city adjusted gross income less his city deduction and city
exemptions, as determined under this chapter.
(b) Husband and wife.
(1) If the federal taxable income of husband or wife, both of whom are
residents, is determined on a separate federal return, their city
taxable incomes shall be separately determined.
(2) If the federal taxable income of husband and wife, both of whom
are residents, is determined on a joint federal return, their city
taxable income shall be determined jointly.
(3) If neither husband or wife, both of whom are residents, files a
federal return:
(A) their tax shall be determined on their joint city taxable income,
or
(B) separate taxes may be determined on their separate city taxable
incomes if they both so elect.
(4) If either husband or wife is a resident and the other is a
nonresident, a separate tax shall be determined on the city taxable
income of the resident spouse on a separate form unless such husband and
wife determine their federal taxable income jointly and both elect to
determine their joint city taxable income as if both were residents.
Section 11-1712
§ 11-1712 City adjusted gross income of a city resident individual.
(a) General. The city adjusted gross income of a city resident
individual means his or her federal adjusted gross income as defined in
the laws of the United States for the taxable year, with the
modifications specified in this section.
(b) Modifications increasing federal adjusted gross income. There
shall be added to federal adjusted gross income: (1) Interest income on
obligations of any state other than this state, or of a political
subdivision of any other such state unless created by compact or
agreement to which this state is a party, to the extent not properly
includible in federal adjusted gross income;
(2) Interest or dividend income on obligations or securities of any
authority, commission, or instrumentality of the United States, which
the laws of the United States exempt from federal income tax but not
from state income taxes;
(3) Income taxes. (A) General. Income taxes imposed by this state or
any other taxing jurisdiction, to the extent deductible in determining
federal adjusted gross income and not credited against federal income
tax.
(B) Shareholders of S corporations. In the case of a shareholder of an
S corporation, with respect to taxes imposed upon or payable by the
corporation, the term "income taxes" in subparagraph (A) of this
paragraph shall also include the taxes imposed under articles nine-A and
thirty-two of the tax law, regardless of the measure of such tax, but
shall not otherwise include taxes imposed by this or any other state of
the United States, or any political subdivision of this or any other
state, or the District of Columbia.
(4) Interest on indebtedness incurred or continued to purchase or
carry obligations or securities the interest on which is exempt from tax
under this chapter, to the extent deductible in determining federal
adjusted gross income.
(5) Expenses paid or incurred during the taxable year for: (i) the
production or collection of income which is exempt from tax under this
chapter, or (ii) the management, conservation or maintenance of property
held for the production of such income, and the amortizable bond premium
for the taxable year on any bond the interest on which is exempt from
tax under this chapter, to the extent that such expenses and premiums
are deductible in determining federal adjusted gross income.
(6) In the case of a taxpayer who has exercised the election permitted
by subdivision (g) or (h) of this section, the amount or amounts
required by said subdivisions to be added to federal adjusted gross
income.
(7) In the case of a taxpayer who is a shareholder of a corporation
organized under article fifteen or authorized to do business in this
state under article fifteen-A of the business corporation law, for the
taxpayer's taxable years beginning before nineteen hundred eighty-eight,
the amount which is deductible by such corporation under paragraph one,
two or three of subsection (a) of section four hundred four of the
internal revenue code for its taxable year ending in or with such
taxpayer's taxable year for contributions paid on behalf of such
taxpayer minus the lesser of fifteen thousand dollars or fifteen percent
of the earned income derived by such taxpayers from such corporation
during such taxpayer's taxable year. In the case of a taxpayer on whose
behalf contributions are paid under more than one plan to which this
paragraph applies or under a plan, contributions to which on his behalf
are subject to the limitations provided in section four hundred four (e)
of the internal revenue code, this paragraph shall apply with respect to
the aggregate of the contributions paid on his behalf under all such
plans.
(10) The amount required to be added to federal adjusted gross income
pursuant to subdivision (i) of this section.
(15) The amount allowed as an exclusion or deduction for the special
additional mortgage recording taxes imposed by subdivision one-a of
section two hundred fifty-three of the tax law in determining federal
adjusted gross income for such taxable year.
(16) Unless the credit allowed pursuant to subsection (f) of section
six hundred six of the tax law is reflected in the computation of the
gain or loss so as to result in an increase in such gain or decrease in
such loss, for federal income tax purposes, from the sale or other
disposition of the property with respect to which the special additional
mortgage recording tax imposed pursuant to subdivision one-a of section
two hundred fifty-three of such law was paid, the amount of the special
additional mortgage recording tax imposed by subdivision one-a of
section two hundred fifty-three of such law which was paid and which is
reflected in the computation of the basis of the property so as to
result in a decrease in such gain or increase in such loss for federal
income tax purposes from the sale or other disposition of the property
with respect to which such tax was paid.
(17) The amount required to be added to federal adjusted gross income
pursuant to subdivision (r) of this section.
(18) In the case of a shareholder of an S corporation: (A) where the
election provided for in subsection (a) of section six hundred sixty of
the tax law is in effect with respect to such corporation, an amount
equal to his pro rata share of the corporation's reductions for taxes
described in paragraphs two and three of subsection (f) of section
thirteen hundred sixty-six of the internal revenue code, and
(B) in the case of a New York S termination year, subparagraph (A) of
this paragraph shall apply to the amount of reductions for taxes
determined under subdivision (s) of this section.
(19) In the case of a shareholder of an S corporation: (A) where the
election provided for in subsection (a) of section six hundred sixty of
the tax law has not been made with respect to such corporation, any item
of loss or deduction of the corporation included in federal gross income
pursuant to section thirteen hundred sixty-six of the internal revenue
code, and
(B) in the case of a New York S termination year, subparagraph (A) of
this paragraph shall apply to the amounts of loss or deduction
determined under subdivision (s) of this section.
(20) S corporation distributions to the extent not included in federal
gross income for the taxable year because of the application of section
thirteen hundred sixty-eight, subsection (e) of section thirteen hundred
seventy-one or subsection (c) of section thirteen hundred seventy-nine
of the internal revenue code which represent income not previously
subject to tax under this chapter because the election provided for in
subsection (a) of section six hundred sixty of the tax law had not been
made. Any such distribution treated in the manner described in paragraph
two of subsection (b) of section thirteen hundred sixty-eight of the
internal revenue code for federal income tax purposes shall be treated
as ordinary income for purposes of this chapter.
(21) In relation to the disposition of stock or indebtedness of a
corporation which elected under subchapter s of chapter one of the
internal revenue code for any taxable year of such corporation
beginning, in the case of a corporation taxable under article nine-A of
the tax law, after December thirty-first, nineteen hundred eighty, and
in the case of a corporation taxable under article thirty-two of the tax
law, after December thirty-first, nineteen hundred ninety-six, the
amount required to be added to federal adjusted gross income pursuant to
subdivision (n) of this section.
(22) The amounts required to be added to federal adjusted gross income
pursuant to subdivision (q) of this section.
(23) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which the taxpayer claimed as a deduction in computing its federal
adjusted gross income solely as a result of an election made pursuant to
the provisions of such paragraph eight as it was in effect for
agreements entered into prior to January first, nineteen hundred
eighty-four;
(24) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which the taxpayer would have been required to include in the
computation of its federal adjusted gross income had it not made the
election permitted pursuant to such paragraph eight as it was in effect
for agreements entered into prior to January first, nineteen hundred
eighty-four;
(25) In the case of property placed in service in taxable years
beginning before nineteen hundred ninety-four, for taxable years
beginning after December thirty first, nineteen hundred eighty-one,
except with respect to property subject to the provisions of section two
hundred eighty-F of the internal revenue code and property subject to
the provisions of section one hundred sixty-eight of the internal
revenue code which is placed in service in this state in taxable years
beginning after December thirty-first, nineteen hundred eighty-four, the
amount allowable as a deduction determined under section one hundred
sixty-eight of the internal revenue code.
* (26) The amount of member or employee contributions to a retirement
system or pension fund picked up or paid by the employer pursuant to
subdivision f of section five hundred seventeen or subdivision d of
section six hundred thirteen of the retirement and social security law
or section 13-225.1, 13-327.1, 13-125.1, 13-125.2 or 13-521.1 of title
thirteen of the code or subdivision nineteen of section twenty-five
hundred seventy-five of the education law.
* NB Expires per ch. 681/92 § 16
26-a. The amount of member or employee contributions to a retirement
system or pension fund picked up or paid by the employer for members of
the Manhattan and Bronx surface transportation authority pension plan
and treated as employer contributions in determining income tax
treatment under section 414(h) of the Internal Revenue Code.
(27) Upon the disposition of property to which paragraph twenty-six of
subdivision (c) of this section applies, the amount, if any, by which
the aggregate of the modifications described in such paragraph
twenty-six attributable to such property exceeds the aggregate of the
modifications described in paragraph twenty-five of this subdivision
attributable to such property.
(29) When gain from the sale or other disposition of property is
included in federal gross income, the amount of reduction in the basis
of such property attributable to credit for solar and wind energy
systems pursuant to paragraph nine of subsection (g) of section six
hundred six of the tax law; but for taxable years beginning before
nineteen hundred eighty-seven, if such gain affects the determination of
a net capital gain for federal income tax purposes, forty percent of
such amount.
(31) The amount deducted or deferred from an employee's salary under a
flexible benefits program established pursuant to section twenty-three
of the general municipal law or section one thousand two hundred ten-a
of the public authorities law.
(32) The amount by which an employee's salary is reduced pursuant to
the provisions of subdivision b of section 12-126.1 and subdivision b of
section 12-126.2 of the code.
(33) Real property taxes paid on qualified agricultural property and
deducted in determining federal adjusted gross income, to the extent of
the amount of the agricultural property tax credit allowed under
subsection (n) or (i) of section six hundred six of the tax law.
(34) The amount of any deduction allowed pursuant to section one
hundred ninety-nine of the internal revenue code.
(35) The amount of any federal deduction for taxes imposed under
article twenty-three of the tax law.
(c) Modifications reducing federal adjusted gross income. There shall
be subtracted from federal adjusted gross income:
(1) Interest income on obligations of the United States and its
possessions to the extent includible in gross income for federal income
tax purposes; such interest income shall include the amount received as
dividends from a regulated investment company, as defined in section
eight hundred fifty-one of the internal revenue code, which has been
designated as the amount of such interest income in a written notice to
shareholders not later than sixty days following the close of its
taxable year; provided that, at the close of each quarter of the taxable
year of such regulated investment company, at least fifty percent of the
value of its total assets, as defined in subsection (c) of section eight
hundred fifty-one of the internal revenue code, consists of obligations
of the United States and its possessions. The aggregate amount so
designated by the regulated investment company for its taxable year
shall not exceed the amount determined by multiplying the total
distributions paid by such regulated investment company to its
shareholders with respect to that taxable year (attributable to income
earned in that year), including any such distributions paid after the
close of the taxable year, as described in section eight hundred
fifty-five of the internal revenue code, by the ratio that the interest
income received in that taxable year on obligations of the United States
and its possessions, after reduction for the deductions and expenses
directly or indirectly attributable thereto, bears to the investment
company taxable income of such regulated investment company for such
taxable year, determined without regard to subparagraph (D) of paragraph
two of subsection (b) of section eight hundred fifty-two of the internal
revenue code;
(2) Interest or dividend income on obligations or securities of any
authority, commission or instrumentality of the United States to the
extent includible in gross income for federal income tax purposes but
exempt from state income taxes under the laws of the United States;
(3) (i) Pensions to officers and employees of this state, its
subdivisions and agencies, to the extent includible in gross income for
federal income tax purposes;
(ii) Pensions to officers and employees of the United States of
America, any territory or possession or political subdivision of such
territory of possession, the District of Columbia, or any agency or
instrumentality of any one of the foregoing, to the extent includible in
gross income for federal income tax purposes;
(3-a) Pensions and annuities received by an individual who has
attained the age of fifty-nine and one-half, not otherwise excluded
pursuant to paragraph three of this subdivision, to the extent
includible in gross income for federal income tax purposes, but not in
excess of twenty thousand dollars, which are periodic payments
attributable to personal services performed by such individual prior to
his or her retirement from employment, which arise: (i) from an
employer-employee relationship or (ii) from contributions to a
retirement plan which are deductible for federal income tax purposes.
However, the term "pensions and annuities" shall also include
distributions received by an individual who has attained the age of
fifty-nine and one-half from an individual retirement account or an
individual retirement annuity, as defined in section four hundred eight
of the internal revenue code, and distributions received by an
individual who has attained the age of fifty-nine and one-half from
self-employed individual and owner-employee retirement plans which
qualify under section four hundred one of the internal revenue code,
whether or not the payments are periodic in nature. Nevertheless, the
term "pensions and annuities" shall not include any lump sum
distribution, as defined in subparagraph (A) of paragraph four of
subsection (e) of section four hundred two of the internal revenue code
and taxed under section six hundred three of the tax law. Where a
husband and wife file a joint city personal income tax return, the
modification provided for in this paragraph shall be computed as if they
were filing separate city personal income tax returns. Where a payment
would otherwise come within the meaning of the term "pensions and
annuities" as set forth in this paragraph except that such individual is
deceased, such payment shall, nevertheless, be treated as a pension or
annuity for purposes of this paragraph if such payment is received by
such individual's beneficiary.
(3-b) (i) Disability income included in federal gross income, to the
extent that such disability income would have been excluded from federal
gross income pursuant to the provisions of subsection (d) of section one
hundred five of the internal revenue code of nineteen hundred fifty-four
had such provisions continued in effect for taxable years commencing
after December thirty-first, nineteen hundred eighty-three as they were
in effect immediately prior to the repeal of such subsection.
Notwithstanding the foregoing, the sum of disability income excluded
pursuant to this paragraph, and pension and annuity income excluded
pursuant to paragraph three-a of this subdivision, shall not exceed
twenty thousand dollars.
(ii) Notwithstanding subdivision (f) of this section, if a husband and
wife determine their federal income tax on a joint return but are
required to determine their city income taxes separately, the amounts of
exclusion allowed under subparagraph (i) of this paragraph shall be
determined in the same joint manner as such amounts would have been
determined under the provisions of paragraph five of subsection (d) of
section one hundred five of the internal revenue code as such provisions
were in effect immediately prior to the repeal of such subsection, but
shall be attributed for city income tax purposes to the spouse who would
have been required to report any such amount as income if the spouses
had determined their federal income taxes separately.
(iii) Where a husband and wife file a joint city income tax return,
the twenty thousand dollar limitation provided in subparagraph (i) of
this paragraph shall be applied as if they were filing separate city
income tax returns.
(3-c) Social security benefits to the extent includible in gross
income for federal income tax purposes pursuant to section eighty-six of
the internal revenue code.
(4) The portion of any gain, from the sale or other disposition of
property having a higher adjusted basis for New York state income tax
purposes than for federal income tax purposes on the last day of the
last taxable year for which article sixteen of the tax law imposes tax,
that does not exceed such difference in basis.
(5) The amount necessary to prevent the taxation under this chapter of
any annuity or other amount of income or gain which was properly
included in income or gain and was taxable under article sixteen of the
tax law to the taxpayer, or to a decedent by reason of whose death the
taxpayer acquired the right to receive the income or gain, or to a trust
or estate from which the taxpayer received the income or gain;
(6) Interest or dividend income on obligations or securities to the
extent exempt from income tax under the laws of this state authorizing
the issuance of such obligations on securities but includible in gross
income for federal income tax purposes; and
(7) The amount of any refund or credit for overpayment of income taxes
imposed by this city, any other taxing jurisdiction, or any taxes
imposed by article twenty-three of the tax law to the extent properly
included in gross income for federal income tax purposes.
(8) Compensation received for active service in the armed forces of
the United States on or after October first, nineteen hundred sixty-one,
and prior to September first, nineteen hundred sixty-two; provided,
however, that the amount of such compensation to be deducted shall not
exceed one hundred dollars for each month of the taxable year,
subsequent to September, nineteen hundred sixty-one, during any part of
which month the taxpayer was engaged in such service. For the purposes
of this paragraph, the words "active service in the armed forces of the
United States" shall mean active duty (other than for training) in the
army, navy (including the marine corps), air force or coast guard of the
United States as defined in title ten of the United States Code.
(8-a) Compensation and bonuses received for active service in the
armed forces of the United States while a prisoner of war or missing in
action during the hostilities in Vietnam, to the extent includible in
gross income for federal income tax purposes.
(9) Interest on indebtedness incurred or continued to purchase or
carry obligations or securities the interest on which is subject to tax
under this chapter but exempt from federal income tax, to the extent
that such interest on indebtedness is not deductible in determining
federal adjusted gross income and is attributable to a trade or business
carried on by the taxpayer.
(10) Ordinary and necessary expenses paid or incurred during the
taxable year for: (i) the production or collection of income which is
subject to tax under this chapter but exempt from federal income tax, or
(ii) the management, conservation or maintenance of property held for
the production of such income, and the amortizable bond premium for the
taxable year on any bond the interest on which is subject to tax under
this chapter but exempt from federal income tax, to the extent that such
expenses and premiums are not deductible in determining federal adjusted
gross income and are attributable to a trade or business carried on by
the taxpayer.
(11) In the case of a taxpayer who has exercised the election
permitted by subdivision (g) or (h) of this section, the amount or
amounts required by said subdivisions to be subtracted from federal
adjusted gross income.
(12) The amount necessary to prevent the taxation of amounts properly
included in New York adjusted gross income in prior taxable years in
accordance with paragraph seven of subdivision (b) of this section.
(13) The amount required to be subtracted from federal adjusted gross
income pursuant to subdivision (i) of this section.
(14) The amount that may be subtracted from federal adjusted gross
income pursuant to subdivision (j) of this section.
(15) That portion of wages or salaries paid or incurred for the
taxable year for which a deduction is not allowed pursuant to the
provisions of section two hundred eighty-C of the internal revenue code.
(19) The amount which may be subtracted from federal adjusted gross
income pursuant to subdivision (r) of this section.
(20) The amounts which may be subtracted from federal adjusted gross
income pursuant to subdivision (o) of this section.
(21) In relation to the disposition of stock or indebtedness of a
corporation which elected under subchapter s of chapter one of the
internal revenue code for any taxable year of such corporation
beginning, in the case of a corporation taxable under article nine-A of
the tax law, after December thirty-first, nineteen hundred eighty, and
in the case of a corporation taxable under article thirty-two of the tax
law, after December thirty-first, nineteen hundred ninety-six, the
amounts required to be subtracted from federal adjusted gross income
pursuant to subdivision (n) of this section.
(22) In the case of a shareholder of an S corporation: (A) where the
election provided for in subsection (a) of section six hundred sixty of
the tax law has not been made with respect to such corporation, any item
of income of the corporation included in federal gross income pursuant
to section thirteen hundred sixty-six of the internal revenue code, and
(B) in the case of a New York S termination year, subparagraph (A) of
this paragraph shall apply to the amounts of income determined under
subdivision (s) of this section.
(23) The amounts which may be subtracted from federal adjusted gross
income pursuant to subdivision (p) of this section.
(24) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which is included in the taxpayer's federal adjusted gross income solely
as a result of an election made pursuant to the provisions of such
paragraph eight as it was in effect for agreements entered into prior to
January first, nineteen hundred eighty-four;
(25) For taxable years beginning after December thirty-first, nineteen
hundred eighty-one, except with respect to property which is a qualified
mass commuting vehicle described in subparagraph (D) of paragraph eight
of subsection (f) of section one hundred sixty-eight of the internal
revenue code (relating to qualified mass commuting vehicles), any amount
which the taxpayer could have excluded from federal adjusted gross
income had it not made the election provided for in such paragraph eight
as it was in effect for agreements entered into prior to January first,
nineteen hundred eighty-four;
(26) In the case of property placed in service in taxable years
beginning before nineteen hundred ninety-four, for taxable years
beginning after December thirty-first, nineteen hundred eight-one,
except with respect to property subject to the provisions of section two
hundred eighty-F of the internal revenue code and property subject to
the provisions of section one hundred sixty-eight of the internal
revenue code which is placed in service in this state in taxable years
beginning after December thirty-first, nineteen hundred eighty-four, an
amount with respect to property which is subject to the provisions of
section one hundred sixty-eight of the internal revenue code equal to
the amount allowable as the depreciation deduction under section one
hundred sixty-seven of the internal revenue code as such section would
have applied to property placed in service on December thirty-first,
nineteen hundred eighty.
(28) Upon the disposition of property to which paragraph twenty-six of
this subdivision applies, the amount, if any, by which the aggregate of
the modifications described in paragraph twenty-five of subdivision (b)
of this section attributable to such property exceeds the aggregate of
the modifications described in paragraph twenty-six of this subdivision
attributable to such property.
(29) Deduction for two-earner married couples. (A) For the taxable
year beginning in nineteen hundred eighty-seven, in the case of a
husband and wife who each have qualified earned income and who have
filed a joint return under subdivision (b) of section 11-1751 for the
taxable year, an amount equal to ten percent of the lesser of:
(i) thirty thousand dollars or
(ii) the qualified earned income of the spouse with the lower
qualified earned income for such taxable year.
(B) For purposes of this paragraph, eligibility for the deduction
provided for herein and the term qualified earned income shall be
determined in the manner such eligibility and such qualified earned
income would have been determined pursuant to the provisions of section
two hundred twenty-one of the internal revenue code of nineteen hundred
fifty-four had such provisions continued in effect for taxable years
commencing after December thirty-first, nineteen hundred eighty-six as
they were in effect immediately prior to the repeal of such section.
Provided, however, the determination of such qualified earned income
shall be made with regard only to the items therein included in city
adjusted gross income, with such adjusted gross income determined
without regard to this paragraph, and only with regard to the deductions
and exclusions which are of the type properly allowable to or chargeable
against such qualified earned income in such taxable year.
(30) The amount received by any person as an accelerated payment or
payments of part or all of the death benefit or special surrender value
under a life insurance policy as a result of any of the diagnoses
specified in subparagraph (A) or (B) of paragraph one of subsection (a)
of section one thousand one hundred thirteen of the insurance law, and
the amount received by any person as a viatical settlement pursuant to
the provisions of article seventy-eight of the insurance law, to the
extent includible in gross income for federal income tax purposes.
(32) The portion of the fees paid during the taxable year by a
taxpayer who is a resident of a continuing care retirement community,
issued a certificate of authority pursuant to article forty-six of the
public health law, attributable to the cost of providing long term care
benefits pursuant to a continuing care contract. The portion of the fees
so attributable shall be determined in accordance with regulations
promulgated by the superintendent of insurance. The deduction may not
exceed the limitation that would be applicable to the taxpayer for the
taxable year, with respect to eligible long term care premiums,
determined under paragraph (10) of subsection (d) of section 213 of the
internal revenue code.
(33) Distributions, to the extent includible in adjusted gross income
for federal income tax purposes, made to the taxpayer because of his or
her status as a victim of Nazi persecution, as defined in P.L. 103-286,
or as a spouse or a descendant in need of such victim.
(34) Items of income, to the extent includible in gross income for
federal income tax purposes, attributable to, derived from or in any way
related to assets stolen from, hidden from or otherwise lost to a victim
of Nazi persecution, as defined in P.L. 103-286, immediately prior to,
during and immediately after World War II, including, but not limited to
interest on the proceeds receivable as insurance under policies issued
to a victim of Nazi persecution, as defined in P.L. 103-286, by European
insurance companies immediately prior to and during World War II.
Provided, however, this subtraction from federal adjusted income does
not apply to assets acquired with such assets or with the proceeds from
the sale of such assets. Provided, further, this paragraph is only
applicable to a taxpayer who was the first recipient of such assets
after their recovery and who is a victim of Nazi persecution, as defined
in P.L. 103-286, or a spouse or a descendant of such victim.
* (35) as provided in section thirty-eight of the tax law, any income
or gain, to the extent it is included in federal adjusted gross income
of an individual who is the sole proprietor of a qualified entity or a
member of a limited liability company, a partner in a partnership or a
shareholder in a New York subchapter S corporation that is a qualified
entity as defined in section sixteen-v of the New York state urban
development corporation act attributable to the operations of such
qualified entity at its location in or as part of a New York state
innovation hot spot, as defined in paragraph (a) of subdivision one of
section sixteen-v of the New York state urban development corporation
act.
* NB There are 2 par (35)'s
* (35) In the case of a taxpayer who is a small business who has
business income and/or farm income as defined in the laws of the United
States, an amount equal to three percent of the net items of income,
gain, loss and deduction attributable to such business or farm entering
into federal adjusted gross income, but not less than zero, for taxable
years beginning after two thousand thirteen, an amount equal to three
and three-quarters percent of the net items of income, gain, loss and
deduction attributable to such business or farm entering into federal
adjusted gross income, but not less than zero, for taxable years
beginning after two thousand fourteen, and an amount equal to five
percent of the net items of income, gain, loss and deduction
attributable to such business or farm entering into federal adjusted
gross income, but not less than zero, for taxable years beginning after
two thousand fifteen. For the purposes of this paragraph, the term small
business shall mean a sole proprietor or a farm business who employs one
or more persons during the taxable year and who has net business income
or net farm income of less than two hundred fifty thousand dollars.
* NB There are 2 par (35)'s
(36) Any wages received by an individual as an employee of a business
located within a tax-free NY area during the first five years of such
business's ten year taxable period specified in subdivision (a) of
section thirty-nine of the tax law to the extent included in federal
adjusted gross income and allowed under section thirty-nine of the tax
law. During the second five years of such business's ten year taxable
period, the first two hundred thousand dollars of such wages in the case
of a taxpayer filing as a single individual, the first two hundred fifty
thousand dollars of such wages in the case of a taxpayer filing as a
head of household, and three hundred thousand dollars of such wages in
the case of a taxpayer filing a joint return, to the extent included in
federal adjusted gross income and allowed under section thirty-nine of
the tax law.
(d) Modification for city fiduciary adjustment. There shall be added
to or subtracted from federal adjusted gross income (as the case may be)
the taxpayer's share, as beneficiary of an estate or trust, of the city
fiduciary adjustment determined under section 11-1719.
(e) Modifications of partners and shareholders of S corporations. (1)
Partners and shareholders of S corporations which are not New York C
corporations. The amounts of modifications required to be made under
this section by a partner or by a shareholder of an S corporation (other
than an S corporation which is a New York C corporation), which relate
to partnership or S corporation items of income, gain, loss or deduction
shall be determined under section 11-1717 and, in the case of a partner
of a partnership doing an insurance business as members of the New York
insurance exchange described in section six thousand two hundred one of
the insurance law, under section 11-1717.1 of this chapter.
(2) Shareholders of S corporations which are New York C corporations.
In the case of a shareholder of an S corporation which is a New York C
corporation, the modifications under this section which relate to the
corporation's items of income, loss and deduction shall not apply,
except for the modifications provided under paragraph nineteen of
subdivision (b) and paragraph twenty-two of subdivision (c) of this
section.
(3) New York S termination year. In the case of a New York S
termination year, the amounts of the modifications required under this
section which relate to the S corporation's items of income, loss,
deduction and reductions for taxes (as described in paragraphs two and
three of subsection (f) of section thirteen hundred sixty-six of the
internal revenue code) shall be adjusted in the same manner that the S
corporation's items are adjusted under subdivision (s) of this section.
(f) Husband and wife. If husband and wife determine their federal
income tax on a joint return but are required to determine their city
income taxes separately, they shall determine their city adjusted gross
incomes separately as if their federal adjusted gross incomes had been
determined separately.
(g) Optional modifications. Subject to the conditions provided in
paragraphs three and four of this subdivision, at the election of the
taxpayer there shall also be subtracted from federal adjusted gross
income either or both of the items set forth in paragraphs one and two
of this subdivision, except that only one of such items shall be
subtracted with respect to any one item of property, and except that a
subtraction of the item set forth in such paragraph two may not be taken
with respect to taxable years commencing on or after January first,
nineteen hundred eighty-nine.
(1) Depreciation with respect to any property such as described in
paragraph three or four of this subdivision, and subject to the
conditions provided therein, not exceeding twice the depreciation
allowed with respect to the same property for federal income tax
purposes. Such modification shall be allowed only upon condition that
any depreciation or amortization allowed with respect to the same
property in determining federal adjusted gross income shall be added to
federal adjusted gross income pursuant to paragraph six of subdivision
(b) of this section. The total of all deductions allowed pursuant to
this paragraph in any taxable year or years with respect to any property
described in paragraph three of this subdivision shall not exceed its
cost or other basis and, with respect to property described in paragraph
four of this subdivision, which is used in a business carried on both
within and without the state shall not exceed its cost or other basis
multiplied by a percentage of the excess of the taxpayer's business
income over its business deductions allocated to this state for the
first year such depreciation is deducted. Such percentage shall be
determined by apportionment and allocation under regulations of the tax
commission.
(2) Expenditures paid or incurred during the taxable year for the
construction, reconstruction, erection or acquisition of any property
such as described in paragraph three or four of this subdivision, and
subject to the conditions provided therein, which is used or to be used
for purposes of research and development in the experimental or
laboratory sense. Such purposes shall not be deemed to include the
ordinary testing or inspection of materials or products for quality
control, efficiency surveys, management studies, consumer surveys,
advertising, promotions or research in connection with literary,
historical or similar projects. Such modification shall be allowed only
on condition that, with respect to property described in paragraph four
of this subdivision, which is used in a business carried on both within
and without the state the deduction shall not exceed the expenditures
multiplied by a percentage of the excess of the taxpayer's business
income over its business deductions allocated to this state for the
first year such expenditures are deducted. Such percentage shall be
determined by apportionment and allocation under regulations of the tax
commission, and for the taxable year and all succeeding taxable years,
any deductions allowed for federal income tax purposes on account of
such expenditures or on account of depreciation of the same property,
except to the extent that its basis may be attributable to factors other
than such expenditures, shall be added to federal adjusted gross income
pursuant to paragraph six of subdivision (b) of this section, or in case
a modification is allowable pursuant to this paragraph for only a part
of such expenditures, on condition that a proportionate part of any such
deductions allowed for federal income tax purposes be added to federal
adjusted gross income. With respect to property which is used or to be
used for research and development only in part, or during only part of
its useful life, the modification allowable pursuant to this paragraph
shall be limited to a proportionate part of the expenditures relating
thereto. If a modification shall have been allowed pursuant to this
paragraph for all or part of such expenditures with respect to any
property, and such property is used for purposes other than research and
development to a greater extent than originally reported, the taxpayer
shall report such use in his or her return for the first taxable year
during which it occurs, and the tax commission may recompute the tax for
the year or years for which such deduction was allowed, and may assess
any additional tax resulting from such recomputation within the time
fixed by subdivision (c) of section 11-1783.
(3) For purposes of this paragraph, such modifications shall be
allowed only with respect to tangible property which is depreciable
pursuant to section one hundred sixty-seven of the internal revenue
code, having a situs in this state and used in the taxpayer's trade or
business: (A) constructed, reconstructed or erected after December
thirty-first, nineteen hundred sixty-three, pursuant to a contract which
was, on or before December thirty-first, nineteen hundred sixty-seven,
and at all times thereafter, binding on the taxpayer or, property, the
physical construction, reconstruction or erection of which began on or
before December thirty-first, nineteen hundred sixty-seven or which
began after such date pursuant to an order placed on or before December
thirty-first, nineteen hundred sixty-seven, and then only with respect
to that portion of the basis thereof or the expenditures relating
thereto which is properly attributable to such construction,
reconstruction or erection after December thirty-first, nineteen hundred
sixty-three, or (B) acquired after December thirty-first, nineteen
hundred sixty-three, pursuant to a contract which was, on or before
December thirty-first, nineteen hundred sixty-seven, and at all times
thereafter, binding on the taxpayer or pursuant to an order placed on or
before December thirty-first, nineteen hundred sixty-seven, by purchase
as defined in section one hundred seventy-nine (d) of the internal
revenue code, if the original use of such property commenced with the
taxpayer, commenced in this state and commenced after December
thirty-first, nineteen hundred sixty-three, or (C) acquired,
constructed, reconstructed, or erected subsequent to December
thirty-first, nineteen hundred sixty-seven, if such acquisition,
construction, reconstruction or erection is pursuant to a plan of the
taxpayer which was in existence December thirty-first, nineteen hundred
sixty-seven and not thereafter substantially modified, and such
acquisition, construction, reconstruction or erection would qualify
under the rules in paragraph four, five or six of subdivision (h) of
section forty-eight of the internal revenue code provided all references
in such paragraphs four, five and six to the dates October nine,
nineteen hundred sixty-six, and October ten, nineteen hundred sixty-six,
shall be read as December thirty-first, nineteen hundred sixty-seven. A
taxpayer shall be allowed a deduction under clause (A), (B) or (C) of
this paragraph only if the tangible property shall be delivered or the
construction, reconstruction or erection shall be completed on or before
December thirty-first, nineteen hundred sixty-nine, except in the case
of tangible property which is acquired, constructed, reconstructed or
erected pursuant to a contract which was, on or before December
thirty-first, nineteen hundred sixty-seven, and at all times thereafter,
binding on the taxpayer. However, for any taxable year beginning on or
after January first, nineteen hundred sixty-eight, a taxpayer shall not
be allowed a modification under paragraph one of this subdivision with
respect to tangible personal property leased to any other person or
corporation. For purposes of the preceding sentence, any contract or
agreement to lease or rent or for a license to use such property shall
be considered a lease. With respect to property which a taxpayer uses
for purposes other than leasing for part of a taxable year and leases
for a part of a taxable year, a modification under paragraph one of this
subdivision shall be allowed in proportion to the part of the year such
property is used by the taxpayer.
(4) For purposes of this paragraph, such modifications shall be
allowed only with respect to tangible property which is depreciable
pursuant to section one hundred sixty-seven of the internal revenue
code, having a situs in this state and used in the taxpayer's trade or
business. The modifications provided for in paragraph one of this
subdivision shall be allowed only with respect to tangible property
which is: (A) constructed, reconstructed or erected after December
thirty-first, nineteen hundred sixty-seven, pursuant to a contract which
was, on or before December thirty-first, nineteen hundred sixty-eight,
and at all times thereafter, binding on the taxpayer or, property, the
physical construction, reconstruction or erection of which began on or
before December thirty-first, nineteen hundred sixty-eight or which
began after such date pursuant to an order placed on or before December
thirty-first, nineteen hundred sixty-eight, and then only with respect
to that portion of the basis thereof or the expenditures relating
thereto which is properly attributable to such construction,
reconstruction or erection after December thirty-first, nineteen hundred
sixty-three, or (B) acquired after December thirty-first, nineteen
hundred sixty-seven, pursuant to a contract which was, on or before
December thirty-first, nineteen hundred sixty-eight, and at all times
thereafter, binding on the taxpayer or pursuant to an order placed on or
before December thirty-first, nineteen hundred sixty-eight, by purchase
as defined in section one hundred seventy-nine (d) of the internal
revenue code, if the original use of such property commenced with the
taxpayer, commenced in this state and commenced after December
thirty-first, nineteen hundred sixty-seven, or (C) acquired,
constructed, reconstructed, or erected subsequent to December
thirty-first, nineteen hundred sixty-eight, if such acquisition,
construction, reconstruction or erection is pursuant to a plan of the
taxpayer which was in existence December thirty-first, nineteen hundred
sixty-eight, and not thereafter substantially modified, and such
acquisition, construction, reconstruction or erection would qualify
under the rules in paragraph four, five or six of subdivision (h) of
section forty-eight of the internal revenue code provided all references
in such paragraphs four, five and six to the dates October nine,
nineteen hundred sixty-six, and October ten, nineteen hundred sixty-six,
shall be read as December thirty-first, nineteen hundred sixty-eight. A
taxpayer shall be allowed a deduction under clause (A), (B) or (C) of
the preceding sentence of this paragraph only if the tangible property
shall be delivered or the construction, reconstruction or erection shall
be completed on or before December thirty-first, nineteen hundred
seventy, except in the case of tangible property which is acquired,
constructed, reconstructed or erected pursuant to a contract which was,
on or before December thirty-first, nineteen hundred sixty-eight, and at
all times thereafter binding on the taxpayer. The modification provided
for in paragraph two of this subdivision shall be allowed only with
respect to tangible property: (A) the construction, reconstruction or
erection of which is completed after December thirty-first, nineteen
hundred sixty-seven, and then only with respect to that portion of the
basis thereof or the expenditures relating thereto which is properly
attributable to such construction, reconstruction or erection after
December thirty-first, nineteen hundred sixty-three, or (B) acquired
after December thirty-first, nineteen hundred sixty-seven, by purchase
as defined in section one hundred seventy-nine (d) of the internal
revenue code, if the original use of such property commenced with the
taxpayer, commenced in this state and commenced after December
thirty-first, nineteen hundred sixty-three. Provided, however, a
modification under paragraph one of this subdivision shall be allowed
with respect to property described in this paragrpah only on condition
that such property shall be principally used by the taxpayer in the
production of goods by manufacturing; processing; assemblying; refining;
mining; extracting; farming; agriculture; horticulture; floriculture;
viticulture; or commerical fishing. For purposes of the preceding
sentence, manufacturing shall mean the process of working raw materials
into wares suitable for use or which gives new shapes, new qualities or
new combinations to matter which already has gone through some
artificial process by the use of machinery, tools, appliances and other
similar equipment. Property used in the production of goods shall
include machinery, equipment or other tangible property which is
principally used in the repair and service of other machinery, equipment
or other tangible property used principally in the production of goods
and shall include all facilities used in the manufacturing operation,
including storage of material to be used in manufacturing and of the
products that are manufactured. At the option of the taxpayer, air and
water pollution control facilities which qualify for elective deductions
under subdivision (h) of this section may be treated, for purposes of
this paragraph, as tangible property principally used in the production
of goods by manufacturing; processing; assembling; refining; mining;
extracting; farming; agriculture; horticulture; floriculture;
viticulture; or commercial fishing, in which event, a deduction shall
not be allowed under such subdivision (h). However, for any taxable year
beginning on or after January first, nineteen hundred sixty-eight, a
taxpayer shall not be allowed a modification under paragraph one of this
subdivision with respect to tangible personal property leased to any
other person or corporation. For purposes of the preceding sentence, any
contract or agreement to lease or rent or for a license to use such
property shall be considered a lease. With respect to property which a
taxpayer uses for purposes other than leasing for part of a taxable year
and leases for a part of a taxable year, a modification under paragraph
one of this subdivision shall be allowed in proportion to the part of
the year such property is used by the taxpayer.
(5) If the modifications allowable for any taxable year pursuant to
this subdivision exceed the taxpayer's city adjusted gross income,
determined without the allowance of such modifications, the excess may
be carried over to the following taxable year or years and may be
subtracted from federal adjusted gross income for such year or years.
(6) In any taxable year when property is sold or otherwise disposed
of, with respect to which a modification has been allowed pursuant to
paragraph one or two of this subdivision, the basis of such property
shall be adjusted to reflect the modifications so allowed, and if the
basis as so adjusted is lower than the adjusted basis of the same
property for federal income tax purposes, there shall be added to
federal adjusted gross income the amount of the difference between such
adjusted bases.
(h) Optional modification for waste treatment facility expenditures.
For taxable years commencing prior to January first, nineteen hundred
eighty-nine, at the election of the taxpayer, there shall also be
subtracted from federal adjusted gross income expenditures paid or
incurred during the taxable year for the construction, reconstruction,
erection or improvement of industrial waste treatment facilities and air
pollution control facilities.
(1)(A) The term "industrial waste treatment facilities" shall mean
facilities for the treatment, neutralization, or stabilization of
industrial waste (as the term "industrial waste" is defined in section
17-0105 of the environmental conservation law) from a point immediately
preceding the point of such treatment, neutralization or stabilization
to the point of disposal, including the necessary pumping and
transmitting facilities, but excluding such facilities installed for the
primary purpose of salvaging materials which are usable in the
manufacturing process or are marketable.
(B) The term "air pollution control facilities" shall mean facilities
which remove, reduce, or render less noxious air contaminants emitted
from an air contamination source (as the terms "air contaminant" and
"air contamination source" are defined in section 19-0107 of the
environmental conservation law) from a point immediately preceding the
point of such removal, reduction or rendering to the point of discharge
of air, meeting emission standards as established by the air pollution
control board, but excluding such facilities installed for the primary
purpose of salvaging materials which are usable in the manufacturing
process or are marketable and excluding those facilities which rely for
their efficacy on dilution, dispersion or assimilation of air
contaminants in the ambient air after emission.
(2) Such modifications shall be allowed only:
(A) with respect to tangible property which is depreciable, pursuant
to section one hundred sixty-seven of the internal revenue code, having
a situs in this state and used in the taxpayer's trade or business, the
construction, reconstruction, erection or improvement of which, in the
case of industrial waste treatment facilities, is initiated on or after
January first, nineteen hundred sixty-five, or which, in the case of air
pollution control facilities, is initiated on or after January first,
nineteen hundred sixty-six, and
(B) on condition that such facilities have been certified by the
commissioner of environmental conservation or his or her designated
representative, in the same manner as provided for in section 17-0707 or
19-0309 of the environmental conservation law, as applicable, as
complying with the provisions of such environmental conservation law,
the state sanitary code and regulations, permits or orders promulgated
pursuant thereto, and
(C) on condition that for the taxable year and all succeeding taxable
years, any deductions allowed for federal income tax purposes for such
expenditures or for depreciation or amortization of the same property,
except to the extent that its basis may be attributable to factors other
than such expenditures, be added to federal adjusted gross income
pursuant to paragraph five of subdivision (b) of this section, or in
case a modification is allowable pursuant to this paragraph for only a
part of such expenditures, on condition that a proportionate amount of
any such deductions allowed for federal income tax purposes be added to
federal adjusted gross income, and
(D) where the election provided for in subdivision (g) of this section
has not been exercised in respect to the same property.
(3)(A) If expenditures in respect to an industrial waste treatment
facility or an air pollution control facility have been allowed as a
modification as provided herein and if within ten years from the end of
the taxable year in which such modification was allowed such property or
any part thereof is used for the primary purpose of salvaging materials
which are usable in the manufacturing process or are marketable, the
taxpayer shall report such change of use in its return for the first
taxable year during which it occurs, and the tax commission may
recompute the tax for the year or years for which such modification was
allowed, and may assess any additional tax resulting from such
recomputation within the time fixed by paragraph eight of subdivision
(c) of section 11-1783.
(B) If a modification is allowed as herein provided for expenditures
paid or incurred during any taxable year on the basis of a temporary
certificate of compliance issued pursuant to the environmental
conservation law, and if the taxpayer fails to obtain a permanent
certificate of compliance upon completion of the facilities with respect
to which such temporary certificate was issued, the taxpayer shall
report such failure in its report for the taxable year during which such
facilities are completed, and the tax commission may recompute the tax
for the year or years for which such modification was allowed, and may
assess any additional tax resulting from such recomputation within the
time fixed by paragraph eight of subdivision (c) of section 11-1783.
(C) If a modification is allowed as herein provided for expenditures
paid or incurred during any taxable year in respect to an air pollution
control facility on the basis of a certificate of compliance issued
pursuant to the environmental conservation law and the certificate is
revoked pursuant to section 19-0309 of the environmental conservation
law, the tax commission may recompute the tax for the year or years for
which the facility is not or was not in compliance with the applicable
provisions of the environmental conservation law, the state sanitary
code or codes, rules, regulations, permits or orders issued pursuant
thereto, and for which a modification was allowed, and may assess any
additional tax resulting from such recomputation within the time fixed
by paragraph eight of subdivision (c) of section 11-1783.
(4) In any taxable year when property is sold or otherwise disposed
of, with respect to which a modification has been allowed pursuant to
this paragraph, such modification shall be disregarded in computing gain
or loss, and the gain or loss on the sale or other disposition of such
property shall be the gain or loss entering into the computation of
federal adjusted gross income for such taxable year.
(i) In the case of mines, oil and gas wells and other natural
deposits, any allowance for percentage depletion pursuant to section six
hundred thirteen or section six hundred thirteen A of the internal
revenue code, shall be added to federal adjusted gross income. However,
with respect to the property as to which such addition to federal
adjusted gross income is required, an allowance for depletion shall be
subtracted from federal adjusted gross income in the amount that would
be deductible under section six hundred eleven of such code if the
deduction for an allowance for depletion were computed without reference
to such section six hundred thirteen or section six hundred thirteen A.
With respect to the computation of depletion pursuant to this
subdivision, the basis for such computation shall be the basis for state
income tax purposes provided for in subsection (i) of section six
hundred twelve of the tax law. The portion of any gain from the sale or
other disposition of such property having a higher adjusted basis for
city income tax purposes than for federal income tax purposes, that does
not exceed such difference in basis, shall be subtracted from federal
adjusted gross income.
(j) Modification for nonpublic school tuition. (1) General. An
individual shall be entitled to subtract from his or her federal
adjusted gross income an amount shown in the table set forth in this
paragraph for his or her city adjusted gross income for the taxable
year, computed without the benefit of this modification, multiplied by
the number of his or her dependents, not exceeding three, attending a
nonpublic school on a full-time basis for at least four months during
the regular school year for the education of such dependent in grades
one through twelve, provided such individual is allowed an exemption
under section 11-1716 for such dependent. Provided, further, that the
modification under this paragraph may be taken only if such individual
has paid at least fifty dollars for each such dependent in tuition to
such nonpublic school for such education of such dependent. No taxpayer
shall be entitled to the modification provided for in this paragraph if
he or she claims a tuition reimbursement payment pursuant to article
twelve-A of the education law.
If city adjusted The amount allowable
gross income is: for each dependent is:
Less than $9,000 $1,000
9,000 -- 10,999 850
11,000 -- 12,999 700
13,000 -- 14,999 550
15,000 -- 16,999 400
17,000 -- 18,999 250
19,000 -- 20,999 150
21,000 -- 22,999 125
23,000 -- 24,999 100
25,000 and over -0-
(2) Husband and wife. In determining the applicable city adjusted
gross income of a husband and wife for purposes of the table set forth
in paragraph one of this subdivision, the city adjusted gross income of
a husband and wife shall be the aggregate of their city adjusted gross
incomes for the taxable year, determined without the benefit of the
modification provided for in this subdivision, and the number of
dependents with respect to which this modification may be claimed shall
be no more than three in the aggregate.
(3) Definitions. (A) "Tuition", as used in this subdivision, shall
mean the amount actually paid during the taxable year by the taxpayer
for the enrollment of a dependent during the regular school year at a
nonpublic school.
(B) "Nonpublic school", as used in this subdivision, shall mean any
non-profit elementary or secondary school in the state of New York,
other than a public school, which: (i) is providing instruction in
accordance with article seventeen and section thirty-two hundred four of
the education law, (ii) has not been found to be in violation of title
VI of the civil rights act of nineteen hundred sixty-four, 78 Stat. 252,
42 U.S.C. § 2000(d) and (iii) which is entitled to a tax exemption under
sections five hundred one (a) and five hundred one (c) (3) of the
federal internal revenue code of nineteen hundred fifty-four, as
amended. The commissioner of education shall furnish to the tax
commission by February first of each year, a certified list of nonpublic
schools which comply with clause (i) of this subparagraph for the
preceding calendar year and shall provide such other assistance with
respect to whether nonpublic schools come within clause (i) as the tax
commission may require.
(C) "Regular school year", as used in this subdivision, shall mean the
months of the taxable year exclusive of July and August.
(4) Additional information. Any claim for a modification under this
subdivision shall be accompained by such information as the tax
commission may require.
(n) Where gain or loss is recognized for federal income tax purposes
upon the disposition of stock or indebtedness of a corporation electing
under subchapter s of chapter one of the internal revenue code:
(1) There shall be added to federal adjusted gross income the amount
of increase in basis with respect to such stock or indebtedness pursuant
to subsection (a) of section thirteen hundred seventy-six of the
internal revenue code as such section was in effect for taxable years
beginning before January first, nineteen hundred eighty-three and
subparagraphs (A) and (B) of paragraph one of subsection (a) of section
thirteen hundred sixty-seven of such code, for each taxable year of the
corporation beginning, in the case of a corporation taxable under
article nine-A of the tax law, after December thirty-first, nineteen
hundred eighty, and in the case of a corporation taxable under article
thirty-two of the tax law, after December thirty-first, nineteen hundred
ninety-six, for which the election provided for in subsection (a) of
section six hundred sixty of the tax law was not in effect, and
(2) There shall be subtracted from federal adjusted gross income:
(A) the amount of reduction in basis with respect to such stock or
indebtedness pursuant to subsection (b) of section thirteen hundred
seventy-six of the internal revenue code as such section was in effect
for taxable years beginning before January first, nineteen hundred
eighty-three and subparagraphs (B) and (C) of paragraph two of
subsection (a) of section thirteen hundred sixty-seven of such code, for
each taxable year of the corporation beginning, in the case of a
corporation taxable under article nine-A of the tax law, after December
thirty-first, nineteen hundred eighty, and in the case of a corporation
taxable under article thirty-two of the tax law, after December
thirty-first, nineteen hundred ninety-six, for which the election
provided for in subsection (a) of section six hundred sixty of the tax
law was not in effect and
(B) the amount of any modifications to federal gross income with
respect to such stock pursuant to paragraph twenty-one of subdivision
(b) of this section.
(o) Modifications for new business investment gains and certain new
business investments.
1. For purposes of this subdivision, the following definitions shall
apply:
(A) "New business investment gain" means gain from the sale of a new
business investment issued to the taxpayer before January first,
nineteen hundred eighty-eight, if:
(i) such new business investment is, in the hands of the person
selling the same (whether or not the taxpayer), a capital asset as
defined in section twelve hundred twenty-one of the internal revenue
code of nineteen hundred fifty-four, as amended, and
(ii) such new business investment was held by such person for the
period specified in paragraph two of this subdivision.
(B) "New business" means a corporation or partnership organized or
formed under the laws of any state which:
(i) adopts a plan on or after July first, nineteen hundred eighty-one
and before January first, nineteen hundred eighty-eight, to conduct a
new business within the meaning and intent of this section and to issue
new business investments, as defined in this subdivision, and
(ii) is, at the date of adoption of such plan, subject to taxation
(whether or not any amount is owing) under section one hundred
eighty-three, one hundred eighty-four or one hundred eighty-six of
article nine of the tax law, or under article nine-a of the tax law or
article twenty-three of the tax law, or would have been subject to tax
under article twenty-three of such law (as such article was in effect on
January first, nineteen hundred eighty) if such article were still in
effect, and the first taxable period for which such new business became
subject to such taxation commenced on or after July first, nineteen
hundred eighty-one and before January first, nineteen hundred
eighty-eight, and such first taxable period includes the date of
adoption of such plan; if not so subject to taxation, the new business
must be subject to taxation under such sections or articles for the
first time within one year from the date of adoption of such plan, and
(iii) is conducted (or will be conducted, as evidenced by such plan)
whereby at least ninety percent of the assets (valued at original cost)
are located and employed in this state and eighty percent of the
employees (as ascertained within the meaning and intent of subparagraph
three of paragraph (a) of subdivision three of section two hundred ten
of the tax law and, in addition, in the case of a partnership, excluding
partners) are principally employed in this state during each taxable
period, or part thereof, as required by clause (iv) of this
subparagraph, and
(iv) within ninety days after adoption of such plan, or, if a return
is required, as part of such return, under such article nine, article
nine-a or article twenty-three, whichever is sooner, shall file a new
business certificate with the tax commission attesting to whether it
meets, if subject to taxation under such articles, or intends to meet,
if not so subject, all of the conditions stated in clauses (i), (ii) and
(iii) of this subparagraph within the time set forth therein.
Thereafter, during the first four taxable years of such new business,
along with, and as part of, any return required under such articles,
such new business shall make and file a new business certificate for the
period covered by such return attesting to whether it has met the
conditions specified in this subparagraph during the taxable period
covered by such return. If no return is required under such articles,
such certificate shall be filed annually on or before the fifteenth day
of March which shall cover the twelve consecutive calendar month period
ending on the last day of December immediately preceding such March
fifteenth. If such new business fails to meet such conditions specified
in this subparagraph, it shall, in addition, give notice of this fact,
within the time prescribed by the tax commission, to the holders of its
"new business investments." The tax commission shall prescribe the form
and content of such new business certification and may require a new
business to file such certificate for periods (even if no return is
filed or required, but for this section) covering up to eight years from
the date of adoption of such plan, as in its discretion, it deems the
same necessary for the enforcement of this section, and
(v) Special rules:
(1) For any taxable period, in order to constitute a new business, a
business enterprise must have derived more than sixty percent of its
aggregate gross receipts from sources other than royalties, rents,
dividends, interest, annuities and sales or exchanges of stock or
securities.
(2) A new business does not include: (i) any new business of which
twenty-five percent or more of the number of shares of stock that
entitle the holders thereof to vote for the election of directors or
trustees is owned, directly or indirectly, by a taxpayer subject to tax
under section one hundred eighty-three, one hundred eighty-four, one
hundred eighty-five or one hundred eighty-six of article nine of the tax
law, or under article nine-a, thirty-two or thirty-three of the tax law
or (ii) any new business substantially similar in operation and in
ownership, directly or indirectly, to a business entity (or entities)
taxable, or previously taxable, under such section, such article,
article twenty-three of the tax law or which would have been subject to
tax under such article twenty-three (as such article was in effect on
January first, nineteen hundred eighty) or the income (or losses) of
which is (or was) includible under article twenty-two of such tax law
whereby the intent and purpose of this section would be evaded.
(C) "New business investment" means and includes the following
investments issued before January first, nineteen hundred eighty-eight
by a new business pursuant to a plan described in clause (i) of
subparagraph (B) of this paragraph for money or other property (other
than stock or securities) on or before the expiration of the third
taxable year of such new business (excluding any short period
immediately preceding such taxable year because the new business was not
in existence for an entire taxable year) or forty-two months from the
adoption of such plan, whichever is sooner: (i) original issuance
capital stock as part of a new issue, (ii) other original issuance
securities of a new issue of a like nature as stocks which are designed
as a means of investment and issued for the purpose of financing
corporate enterprises and providing for a distribution of rights in such
enterprises, (iii) debt obligations such as bonds and debentures for a
term of at least one year, whether secured or unsecured, and (iv)
certificates and other instruments representing proprietary interests,
whether limited or otherwise, in and assumption of general liabilities,
whether limited or otherwise, of a partnership enterprise.
2. A taxpayer may subtract from his federal adjusted gross income a
portion of an amount constituting a new business investment gain, as
follows:
The modification is equal to the
following proportion of the gain
If new business includible in federal
investment held for: adjusted gross income:
At least four years, but
less than five years twenty-five percent
At least five years, but
less than six years fifty percent
At least six years one hundred percent
3. Where, within six months of the realization of a new business
investment gain allowable as the basis of a modification under paragraph
two of this subdivision, such modification is equal to less than one
hundred percent of the portion of the gain includible in federal
adjusted gross income and the taxpayer purchases a new business
investment which is then held for a period of at least six months, the
taxpayer may subtract from his or her federal adjusted gross income ten
percent (but not an amount that will reduce the portion of such gain
included in his or her New York income below zero) of the amount of such
gain where the purchase price of the new business investment is equal to
or greater than the proceeds of the sale giving rise to such gain. Where
the purchase price of the new business investment is less than an amount
equal to the proceeds of such sale, the modification allowable under
this paragraph shall be equal to ten percent of an amount equal to the
product of: (A) the amount of the gain and (B) a fraction the numerator
of which is the purchase price of the new investment and the denominator
of which is an amount equal to the proceeds of such sale. The
modification allowable under this paragraph may be utilized, at the
option of the taxpayer, with respect to the taxable year in which the
new business investment gain is realized or the year containing the last
day of the six-month retention period described in this paragraph.
4. The tax commission may prescribe such rules and regulations as may
be necessary to carry out the purposes of this subdivision.
(p) New business investment deferral. For taxable years beginning
before January first, nineteen hundred eighty-eight, at the option of
the taxpayer, there may be subtracted from federal adjusted gross income
a reinvested amount of long-term capital gain realized in a taxable year
from the sale of a capital asset, as such term is defined in section
twelve hundred twenty-one of the internal revenue code, which is not a
new business investment. A reinvested amount of long-term capital gain
shall mean an amount which bears the same ratio to the long-term capital
gain realized from the sale of a capital asset which was includible in
New York adjusted gross income as that portion of the sale proceeds
which is reinvested, within one year from date of sale, in a New York
new business bears to the total sale proceeds. For the purposes of this
subdivision, a New York new business is a business enterprise which: (1)
has been a taxpayer under article nine-A, twenty-two, thirty-two or
thirty-three of the tax law for no more than three taxable years
(including short taxable years), (2) over fifty percent of the number of
shares of stock that entitle the holders thereof to vote for the
election of directors or trustees is not owned, directly or indirectly,
by a taxpayer subject to tax under section one hundred eighty-three, one
hundred eighty-four, one hundred eighty-five or one hundred eighty-six
of article nine of the tax law, or under article nine-A, thirty-two or
thirty-three of the tax law, (3) is not substantially similar in
operation or ownership, directly or indirectly, to a business entity (or
entities) taxable, or previously taxable, under such sections, such
articles, article twenty-three of the tax law or which would have been
subject to tax under article twenty-three (as such article was in effect
on January first, nineteen hundred eighty) or the income (or losses) of
which is (or was) includible under article twenty-two of the tax law
whereby the intent and purpose of this subdivision would be evaded, (4)
locates and employs at least ninety percent of its assets in the state,
(5) employs principally in the state eighty percent of its employees (as
ascertained within the meaning and intent of subparagraph three of
paragraph (a) of subdivision three of section two hundred ten of the tax
law and, in addition, in the case of a partnership, excluding partners),
and (6) derives less than forty percent of its gross income from
dividends, interest, royalties (other than mineral, oil, or gas
royalties or copyright royalties), annuities and (7) reports at least
twenty-five hundred dollars in gross income in any taxable year. The
reinvested amount must qualify as a capital asset as defined pursuant to
section twelve hundred twenty-one of the internal revenue code and must
be retained by the taxpayer for at least twelve months. The modification
allowable under this subdivision shall be utilized with respect to the
taxable year in which the twelve month retention period ends.
(q) An amount deferred under subdivision (p) hereof shall be added to
federal adjusted gross income when the reinvestment in the New York new
business which qualified a taxpayer for such deferral is sold.
(r) In the case of a sale or other disposition of property acquired
from a decedent and valued by the executor of the estate of such
decedent for the purposes of the tax under article twenty-six of the tax
law (i) pursuant to paragraph two of subsection (b) of section nine
hundred fifty-four of the tax law, or (ii) pursuant to section nine
hundred fifty-four-a of the tax law, where such estate was insufficient
to require the filing of a federal estate tax return, the amount
necessary to properly reflect the gain or loss from such sale or other
disposition which would have been realized under this chapter, had, in
the case of clause (i) of this subdivision, a federal estate tax return
been filed similarly valuing such property pursuant to section two
thousand thirty-two of the internal revenue code, or in the case of
clause (ii) of this subdivision, pursuant to section two thousand
thirty-two-A of such code.
(s) New York S termination year. (1) General. In the case of a New
York S termination year, the amount of any item of S corporation income,
loss and deduction included in the shareholder's federal adjusted gross
income and any reductions for taxes (as described in paragraphs two and
three of subsection (f) of section thirteen hundred sixty-six of the
internal revenue code) shall be adjusted in accordance with the
treatment provided in paragraph two or three of this subdivision.
(2) Pro rata allocation. Unless paragraph three of this subdivision
applies, an equal portion of each S corporation item shall be assigned
to each day of the S corporation's taxable year for federal income tax
purposes. The portion of each such item thereby assigned to the S short
year shall be treated as an item of a New York S corporation, and the
portion of each such item thereby assigned to the C short year shall be
treated as an item of an S corporation which is a New York C
corporation.
(3) Normal tax accounting. The portion of each S corporation item
assigned to the S short year and the C short year shall be determined
using normal tax accounting rules if:
(A) there is a sale or exchange of fifty percent or more of the stock
in such corporation during the New York S termination year or
(B) the corporation so elects, as provided in subparagraph (B) of
paragraph two of subsection (s) of section six hundred twelve of the tax
law.
(t) Related members expense add back. (1) Definitions. (A) Related
member. "Related member" means a related person as defined in
subparagraph (c) of paragraph three of subsection (b) of section four
hundred sixty-five of the internal revenue code, except that "fifty
percent" shall be substituted for "ten percent".
(B) Effective rate of tax. "Effective rate of tax" means, as to any
city, the maximum statutory rate of tax imposed by the city on or
measured by a related member's net income multiplied by the
apportionment percentage, if any, applicable to the related member under
the laws of said jurisdiction. For purposes of this definition, the
effective rate of tax as to any city is zero where the related member's
net income tax liability in said city is reported on a combined or
consolidated return including both the taxpayer and the related member
where the reported transactions between the taxpayer and the related
member are eliminated or offset. Also, for purposes of this definition,
when computing the effective rate of tax for a city in which a related
member's net income is eliminated or offset by a credit or similar
adjustment that is dependent upon the related member either maintaining
or managing intangible property or collecting interest income in that
city, the maximum statutory rate of tax imposed by said city shall be
decreased to reflect the statutory rate of tax that applies to the
related member as effectively reduced by such credit or similar
adjustment.
(C) Royalty payments. Royalty payments are payments directly connected
to the acquisition, use, maintenance or management, ownership, sale,
exchange, or any other disposition of licenses, trademarks, copyrights,
trade names, trade dress, service marks, mask works, trade secrets,
patents and any other similar types of intangible assets as determined
by the state commissioner of taxation and finance, and include amounts
allowable as interest deductions under section one hundred sixty-three
of the internal revenue code to the extent such amounts are directly or
indirectly for, related to or in connection with the acquisition, use,
maintenance or management, ownership, sale, exchange or disposition of
such intangible assets.
(D) Valid business purpose. A valid business purpose is one or more
business purposes, other than the avoidance or reduction of taxation,
which alone or in combination constitute the primary motivation for some
business activity or transaction, which activity or transaction changes
in a meaningful way, apart from tax effects, the economic position of
the taxpayer. The economic position of the taxpayer includes an increase
in the market share of the taxpayer, or the entry by the taxpayer into
new business markets.
(2) Royalty expense add backs. (A) For the purpose of computing city
adjusted gross income, a taxpayer must add back royalty payments
directly or indirectly paid, accrued, or incurred in connection with one
or more direct or indirect transactions with one or more related members
during the taxable year to the extent deductible in calculating federal
taxable income.
(B) Exceptions. (i) The adjustment required in this subdivision shall
not apply to the portion of the royalty payment that the taxpayer
establishes, by clear and convincing evidence of the type and in the
form specified by the commissioner of finance, meets all of the
following requirements: (I) the related member was subject to tax in
this city or another city within the United States or a foreign nation
or some combination thereof on a tax base that included the royalty
payment paid, accrued or incurred by the taxpayer; (II) the related
member during the same taxable year directly or indirectly paid, accrued
or incurred such portion to a person that is not a related member; and
(III) the transaction giving rise to the royalty payment between the
taxpayer and the related member was undertaken for a valid business
purpose.
(ii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
related member was subject to tax on or measured by its net income in
this city or another city within the United States, or some combination
thereof; (II) the tax base for said tax included the royalty payment
paid, accrued or incurred by the taxpayer; and (III) the aggregate
effective rate of tax applied to the related member in those
jurisdictions is no less than eighty percent of the statutory rate of
tax that applied to the taxpayer under section 11-1701 of this chapter
for the taxable year.
(iii) The adjustment required in this subdivision shall not apply if
the taxpayer establishes, by clear and convincing evidence of the type
and in the form specified by the commissioner of finance, that: (I) the
royalty payment was paid, accrued or incurred to a related member
organized under the laws of a country other than the United States; (II)
the related member's income from the transaction was subject to a
comprehensive income tax treaty between such country and the United
States; (III) the related member was subject to tax in a foreign nation
on a tax base that included the royalty payment paid, accrued or
incurred by the taxpayer; (IV) the related member's income from the
transaction was taxed in such country at an effective rate of tax at
least equal to that imposed by this city; and (V) the royalty payment
was paid, accrued or incurred pursuant to a transaction that was
undertaken for a valid business purpose and using terms that reflect an
arm's length relationship.
(iv) The adjustment required in this subdivision shall not apply if
the taxpayer and the commissioner of finance agree in writing to the
application or use of alternative adjustments or computations. The
commissioner of finance may, in his or her discretion, agree to the
application or use of alternative adjustments or computations when he or
she concludes that in the absence of such agreement the income of the
taxpayer would not be properly reflected.
Section 11-1713
§ 11-1713 City deduction of a resident individual. The city deduction
of a city resident individual shall be his or her city standard
deduction unless such resident individual elects to deduct his or her
city itemized deduction under the conditions set forth in section
11-1715.
Section 11-1714
§ 11-1714 City standard deduction of a city resident individual. (a)
Unmarried individual. For taxable years beginning after nineteen hundred
ninety-six, the city standard deduction of a city resident individual
who is not married nor the head of a household nor a surviving spouse
nor an individual whose federal exemption amount is zero shall be seven
thousand five hundred dollars; for taxable years beginning in nineteen
hundred ninety-six, such standard deduction shall be seven thousand four
hundred dollars; for taxable years beginning in nineteen hundred
ninety-five, such standard deduction shall be six thousand six hundred
dollars; and for taxable years beginning after nineteen hundred
eighty-nine and before nineteen hundred ninety-five, such standard
deduction shall be six thousand dollars.
(b) Husband and wife filing jointly and surviving spouse. For taxable
years beginning after nineteen hundred ninety-six, the city standard
deduction of a husband and wife whose city taxable income is determined
jointly or a surviving spouse shall be thirteen thousand dollars; for
taxable years beginning in nineteen hundred ninety-six, such standard
deduction shall be twelve thousand three hundred fifty dollars; for
taxable years beginning in nineteen hundred ninety-five, such standard
deduction shall be ten thousand eight hundred dollars; and for taxable
years beginning after nineteen hundred eighty-nine and before nineteen
hundred ninety-five, such standard deduction shall be nine thousand five
hundred dollars.
(c) Head of household. For taxable years beginning after nineteen
hundred ninety-six, the city standard deduction of an individual who is
a head of household shall be ten thousand five hundred dollars; for
taxable years beginning in nineteen hundred ninety-six, such standard
deduction shall be ten thousand dollars; for taxable years beginning in
nineteen hundred ninety-five, such standard deduction shall be eight
thousand one hundred fifty dollars; and for taxable years beginning
after nineteen hundred eighty-nine and before nineteen hundred
ninety-five, such standard deduction shall be seven thousand dollars.
(d) Married individuals filing separately. For taxable years beginning
after nineteen hundred ninety-six, the city standard deduction of a
married individual filing a separate return shall be six thousand five
hundred dollars; for taxable years beginning in nineteen hundred
ninety-six, such standard deduction shall be six thousand one hundred
seventy-five dollars; for taxable years beginning in nineteen hundred
ninety-five, such standard deduction shall be five thousand four hundred
dollars; and for taxable years beginning after nineteen hundred
eighty-nine and before nineteen hundred ninety-five, such standard
deduction shall be four thousand seven hundred fifty dollars.
(e) Standard deduction of a dependent individual. For taxable years
beginning after nineteen hundred ninety-six, the city standard deduction
of a city resident individual whose federal exemption amount is zero
shall be three thousand dollars; for taxable years beginning in nineteen
hundred ninety-six, such standard deduction shall be two thousand nine
hundred dollars; and for taxable years beginning after nineteen hundred
eighty-nine and before nineteen hundred ninety-six, such standard
deduction shall be two thousand eight hundred dollars.
(f) For taxable years beginning on or after January first, two
thousand thirteen, the amounts of standard deductions set forth in this
section shall be adjusted in the same manner as the amounts of standard
deductions set forth in section six hundred fourteen of the tax law.
Section 11-1715
§ 11-1715 City itemized deduction of a city resident individual. (a)
General. If federal taxable income of a city resident individual is
determined by itemizing deductions from his federal adjusted gross
income, such resident individual may elect to deduct his city itemized
deduction in lieu of his city standard deduction. The city itemized
deduction of a city resident individual means the total amount of his
deductions from federal adjusted gross income, other than federal
deductions for personal exemptions, as provided in the laws of the
United States for the taxable year, with the modifications specified in
this section, except as provided for under subdivisions (f) and (g) of
this section.
(b) Husband and wife.
(1) A husband and wife, both of whom are required to file returns
under this chapter, shall be allowed city itemized deductions only if
both elect to take city itemized deductions.
(2) The total of the city itemized deductions of a husband and wife
whose federal taxable income is determined on a joint return, but whose
city taxable incomes are required to be determined separately, shall be
divided between them as if their federal taxable incomes had been
determined separately.
(c) Modifications reducing federal itemized deductions. The total
amount of deductions from federal adjusted gross income shall be reduced
by the amount of such federal deductions for:
(1) state and local general sales taxes as defined in subsection (b)
of section one hundred sixty-four of the internal revenue code, to the
extent included in federal itemized deductions or income taxes imposed
by this city or any other taxing jurisdiction, except city earnings
taxes on nonresidents that are imposed upon and paid by taxpayers for
taxable years beginning after December thirty-first, nineteen hundred
seventy and before January first, two thousand, pursuant to the
authority of former section twenty-five-m of the general city law, to
the extent that the amount of such tax exceeds the tax computed as if
the rates were one-fourth of one percent of wages subject to tax and
three-eighths of one percent of net earnings from self-employment
subject to tax;
(2) interest on indebtedness incurred or continued to purchase or
carry obligations or securities the interest on which is exempt from tax
under this chapter; and
(3) ordinary and necessary expenses paid or incurred during the
taxable year for: (i) the production or collection of income which is
exempt from tax under this chapter, or (ii) the management, conservation
or maintenance of property held for the production of such income, and
the amortizable bond premium for the taxable year on any bond the
interest on which is exempt from tax under this chapter, to the extent
that such expenses and premiums are deductible in determining federal
taxable income.
(4) premiums paid for long-term care insurance to the extent that such
premiums are deductible in determining federal taxable income.
(6) in the case of a shareholder of an S corporation:
(A) where the election provided for in subsection (a) of section six
hundred sixty of the tax law has not been made, S corporation items of
deduction included in federal itemized deductions, and
(B) in the case of a New York S termination year, the portion of such
items assigned to the period beginning on the day the election ceases to
be effective, as determined under subdivision (s) of section 11-1712.
(d) Modifications increasing federal itemized deductions. The total
amount of deductions from federal adjusted gross income shall be
increased by:
(1) (Reserved.)
(2) interest on indebtedness incurred or continued to purchase or
carry obligations or securities the interest on which is subject to tax
under this chapter but exempt from federal income tax, to the extent
that such interest on indebtedness is not deductible for federal income
tax purposes and is not subtracted from federal adjusted gross income
pursuant to paragraph nine of subdivision (c) of section 11-1712; and
(3) ordinary and necessary expenses paid or incurred during the
taxable year for: (i) the production or collection of income which is
subject to tax under this chapter but exempt from federal income tax, or
(ii) the management, conservation or maintenance of property held for
the production of such income, and the amortizable bond premium for the
taxable year on any bond the interest on which is subject to tax under
this chapter but exempt from federal income tax, to the extent that such
expenses and premiums are not deductible in determining federal adjusted
gross income and are not subtracted from federal adjusted gross income
pursuant to paragraph ten of subdivision (c) of section 11-1712.
(4) allowable college tuition expenses, as defined in paragraph two of
subsection (t) of section six hundred six of the tax law, multiplied by
the applicable percentage. Such applicable percentage shall be
twenty-five percent for taxable years beginning in two thousand one,
fifty percent for taxable years beginning in two thousand two,
seventy-five percent for taxable years beginning in two thousand three
and one hundred percent for taxable years beginning after two thousand
three. Provided, however, no deduction shall be allowed under this
paragraph to a taxpayer who claims the credit provided under subsection
(t) of section six hundred six of the tax law.
(e) Modification of partners and shareholders of S corporations. (1)
Partners and shareholders of S corporations which are not New York C
corporations. The amounts of modifications under subdivision (c) or
under paragraph two or three of subdivision (d) required to be made by a
partner or by a shareholder of an S corporation (other than an S
corporation which is a New York C corporation), with respect to items of
deduction of a partnership or S corporation shall be determined under
section 11-1717.
(2) Shareholders of S corporations which are New York C corporations.
In the case of a shareholder of an S corporation which is a New York C
corporation, the modifications under this section which relate to the
corporation's items of deduction shall not apply, except for the
modification provided under paragraph six of subdivision (c).
(3) New York S termination year. In the case of a New York S
termination year, the amounts of the modifications required under this
section which relate to the S corporation's items of deduction shall be
adjusted in the same manner that the S corporation's items are adjusted
under subdivision (s) of section 11-1712.
(f) Except as otherwise provided under subdivision (g) of this
section, the city itemized deduction otherwise allowable under this
section shall be reduced by the sum of the amounts determined under
paragraphs one and two of this subdivision.
(1) An amount equal to the city itemized deduction otherwise allowable
under subdivision (a) of this section, multiplied by a percentage, such
percentage to be determined by multiplying, for taxable years beginning
in nineteen hundred eighty-eight, ten percent, and for taxable years
beginning after nineteen hundred eighty-eight, twenty-five percent, by a
fraction,
(A) in the case of an unmarried individual or married individual
filing a separate return, the numerator of which is the lesser of fifty
thousand dollars or the excess of such individual's city adjusted gross
income over one hundred thousand dollars and the denominator of which is
fifty thousand dollars;
(B) in the case of a married individual filing a joint return or a
surviving spouse, the numerator of which is the lesser of fifty thousand
dollars or the excess of such individual's city adjusted gross income
over two hundred thousand dollars and the denominator of which is fifty
thousand dollars;
(C) in the case of a head of household, the numerator of which is the
lesser of fifty thousand dollars or the excess of such individual's city
adjusted gross income over one hundred fifty thousand dollars and the
denominator of which is fifty thousand dollars.
(2) An amount equal to the city itemized deduction of an individual
otherwise allowable under subdivision (a) of this section, multiplied by
a percentage, such percentage to be determined by multiplying, for
taxable years beginning in nineteen hundred eighty-eight, ten percent,
and for taxable years beginning after nineteen hundred eighty-eight,
twenty-five percent, by a fraction, the numerator of which is the lesser
of fifty thousand dollars or the excess of such individual's city
adjusted gross income over four hundred seventy-five thousand dollars
and the denominator of which is fifty thousand dollars.
(g) (1) With respect to an individual whose New York adjusted gross
income is over one million dollars but no more than ten million dollars,
the New York itemized deduction shall be an amount equal to fifty
percent of any charitable contribution deduction allowed under section
one hundred seventy of the internal revenue code for taxable years
beginning after two thousand nine and before two thousand sixteen. With
respect to an individual whose New York adjusted gross income is over
one million dollars, the New York itemized deduction shall be an amount
equal to fifty percent of any charitable contribution deduction allowed
under section one hundred seventy of the internal revenue code for
taxable years beginning in two thousand nine or after two thousand
fifteen.
(2) With respect to an individual whose New York adjusted gross income
is over ten million dollars, the New York itemized deduction shall be an
amount equal to twenty-five percent of any charitable contribution
deduction allowed under section one hundred seventy of the internal
revenue code for taxable years beginning after two thousand nine and
ending before two thousand sixteen.
Section 11-1716
§ 11-1716 City exemptions of a city resident individual. (a) General.
For taxable years beginning after nineteen hundred eighty-seven, a city
resident individual shall be allowed a city exemption of one thousand
dollars for each exemption for which such resident individual is
entitled to a deduction for the taxable year under subsection (c) of
section one hundred fifty-one of the internal revenue code; and for
taxable years beginning in nineteen hundred eighty-seven, a city
resident individual other than a taxpayer whose federal exemption amount
is zero shall be allowed a city exemption of nine hundred dollars for
each exemption for which he is entitled to a deduction for the taxable
year for federal income tax purposes.
(b) Husband and wife. If the city income taxes of a husband and wife
are required to be separately determined but their federal income tax is
determined on a joint return, each of them shall be separately entitled
to the city exemptions under subdivision (a) of this section to which
each would be separately entitled for the taxable year if their federal
income taxes had been determined on separate returns.
Section 11-1717
§ 11-1717 Resident partners and shareholders of S corporations. (a)
Partner's and shareholder's modifications. In determining city adjusted
gross income and city taxable income of a city resident partner or a
city resident shareholder of an S corporation (other than an S
corporation which is a New York C corporation), any modification
described in subdivision (b), (c) or (d) of section 11-1712, or
subdivision (c) of section 11-1715 or paragraph two or three of
subdivision (d) of such section, which relates to an item of partnership
or S corporation income, gain, loss or deduction shall be made in
accordance with the partner's distributive share or the shareholder's
pro rata share, for federal income tax purposes, of the item to which
the modification relates. Where a partner's distributive share or a
shareholder's pro rata share of any such item is not required to be
taken into account separately for federal income tax purposes, the
partner's or shareholder's share of such item shall be determined in
accordance with his or her share, for federal income tax purposes, of
partnership or S corporation taxable income or loss generally. In the
case of a New York S termination year, his or her pro rata share of any
such item shall be determined under subdivision (s) of section 11-1712.
(b) Character of items. Each item of partnership and S corporation
income, gain, loss, or deduction shall have the same character for a
partner or shareholder under this subchapter as for federal income tax
purposes. Where an item is not characterized for federal income tax
purposes, it shall have the same character for a partner or shareholder
as if realized directly from the source from which realized by the
partnership or S corporation or incurred in the same manner as incurred
by the partnership or S corporation.
(c) City tax avoidance or evasion. Where a partner's distributive
share of an item of partnership income, gain, loss or deduction is
determined for federal income tax purposes by special provision in the
partnership agreement with respect to such item, and where the principal
purpose of such provision is the avoidance or evasion of tax under this
chapter, the partner's distributive share of such item, and any
modification required with respect thereto, shall be determined as if
the partnership agreement made no special provision with respect to such
item.
Section 11-1717.1
§ 11-1717.1 Residents; special provisions. Notwithstanding any other
provisions of this chapter, the city adjusted gross income and the city
taxable income of a resident individual or partner of a partnership
doing an insurance business as a member of the New York insurance
exchange described in section six thousand two hundred one of the
insurance law, shall not include any item of income, gain, loss or
deduction of such business, which is the individual's distributive or
pro rata share for federal income tax purposes or which the individual
is required to take into account separately for federal income tax
purposes. Provided however, such individual's city adjusted gross income
shall include his or her distributive or pro rata share of the allocated
entire net income as determined by such business under sections fifteen
hundred three and fifteen hundred four of the tax law. In the event such
allocated entire net income is a loss, there shall not be subtracted
from federal adjusted gross income in computing city adjusted gross
income such individual's distributive share of such loss.
Section 11-1718
§ 11-1718 City taxable income of a city resident estate or trust. The
city taxable income of a city resident estate or trust means its federal
taxable income as defined in the laws of the United States for the
taxable year, with the following modifications:
(2) There shall be subtracted the modifications described in
paragraphs four and five of subdivision (c) of section 11-1712, with
respect to gains from the sale or other disposition of property, to the
extent such gains are excluded from federal distributable net income of
the estate or trust.
(3) There shall be added or subtracted (as the case may be) the share
of the estate or trust in the city fiduciary adjustment determined under
section 11-1719.
* (4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs six, ten, seventeen, eighteen,
nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four,
twenty-five, twenty-six, twenty-seven, twenty-nine, thirty-four and
thirty-five of subdivision (b) and in paragraphs eleven, thirteen,
fifteen, nineteen, twenty, twenty-one, twenty-two, twenty-three,
twenty-four, twenty-five, twenty-six and twenty-eight of subdivision (c)
of section 11-1712 of this subchapter.
* NB Effective until ch. 782/88 expires
* (4) There shall be added or subtracted (as the case may be) the
modifications described in paragraphs six, ten, seventeen, eighteen,
nineteen, twenty, twenty-one, twenty-two, twenty-three, twenty-four,
twenty-five, twenty-seven, twenty-eight, twenty-nine, thirty-four and
thirty-five of subdivision (b) and in paragraphs eleven, thirteen,
fifteen, nineteen, twenty, twenty-one, twenty-two, twenty-three,
twenty-four, twenty-five, twenty-six and twenty-eight of subdivision (c)
of section 11-1712 of this subchapter.
* NB Effective when ch. 782/88 expires
(5) In the case of a trust, there shall be added the amount of any
includible gain, reduced by any deductions properly allocable thereto,
upon which tax is imposed for the taxable year pursuant to section six
hundred forty-four of the internal revenue code.
Section 11-1719
§ 11-1719 Share of a resident estate, trust or beneficiary in city
fiduciary adjustment. (a) General. An adjustment shall be made in
determining city taxable income of a city resident estate or trust under
section 11-1718, or city adjusted gross income of a city resident
beneficiary of any estate or trust under subdivision (d) of section
11-1712, in the amount of the share of each in the city fiduciary
adjustment as determined in this section.
(b) Definition. The city fiduciary adjustment shall be the net amount
of the modifications described in section 11-1712 (including subdivision
(d) if the estate or trust is a beneficiary of another estate or trust),
and in subdivision (c) and paragraphs two and three of subdivision (d)
of section 11-1715, which relate to items of income, gain, loss or
deduction of an estate or trust. The net amount of such modifications
shall not include:
(1) Any modification described in paragraphs one and two of
subdivision (b) and paragraphs one, two, four, five, six, and seven of
subdivision (c) of section 11-1712 with respect to any amount which,
pursuant to the terms of the governing instrument, is paid or
permanently set aside for a charitable purpose during the taxable year,
and
(2) Any modification described in paragraph four or five of
subdivision (c) of section 11-1712, with respect to gains from the sale
or other disposition of property, to the extent such gains are excluded
from federal distributable net income of the estate or trust.
(c) Shares of city fiduciary adjustment.
(1) The respective shares of an estate or trust and its beneficiaries
(including, solely for the purpose of this allocation, nonresident
beneficiaries) in the city fiduciary adjustment shall be in proportion
to their respective shares of federal distributable net income of the
estate or trust.
(2) If the estate or trust has no federal distributable net income for
the taxable year, the share of each beneficiary in the city fiduciary
adjustment shall be in proportion to his or her share of the estate or
trust income for such year, under local law or the governing instrument,
which is required to be distributed currently and any other amounts of
such income distributed in such year. Any balance of the city fiduciary
adjustment shall be allocated to the estate or trust.
(d) Alternate attribution of modifications. The tax commission may by
regulation establish such other method or methods of determining to whom
the items comprising the fiduciary adjustment shall be attributed, as
may be appropriate and equitable. Such method may be used by the
fiduciary in his or her discretion whenever the allocation of the
fiduciary adjustment pursuant to subdivision (c) of this section would
result in an inequity which is substantial both in amount and in
relation to the amount of the fiduciary adjustment.
Section 11-1721
§ 11-1721 Credit to trust beneficiary receiving accumulation
distribution. (a) General. A city resident beneficiary of a trust whose
city adjusted gross income includes all or part of an accumulation
distribution by such trust, as defined in section six hundred sixty-five
of the internal revenue code, shall be allowed a credit against the tax
otherwise due under this chapter for all or a proportionate part of any
tax paid by the trust under this chapter or under title T of chapter
forty-six of this code, as it was in effect prior to September first,
nineteen hundred eighty-six, for any preceding taxable year which would
not have been payable if the trust had in fact made distributions to its
beneficiaries at the times and in the amounts specified in section six
hundred sixty-six of the internal revenue code.
(b) Limitation. The credit under this section shall not reduce the tax
otherwise due from the beneficiary under this chapter to an amount less
than would have been due if the accumulation distribution or his or her
part thereof were excluded from his or her city adjusted gross income.
Section 11-1722
§ 11-1722 City minimum taxable income of city resident individual. (a)
The city minimum taxable income of a city resident individual, estate or
trust shall be the sum of the items of tax preference, as described in
subdivision (b) of this section, reduced (but not below zero) by the
aggregate of the following:
(1) the applicable specific deduction described in subdivision (c) of
this section;
(2) the subtraction for New York state tax determined under paragraph
two of subsection (a) of section six hundred twenty-two of the tax law;
and
(3) to the extent that the sum of the items of tax preference exceeds
the applicable specific deduction described in subdivision (c) of this
section plus the tax described in paragraph two above, the amount of any
net operating loss of the taxpayer, as determined for federal income tax
purposes, which remains as a net operating loss carryover to a
succeeding taxable year. In such case, however, the amount of such net
operating loss used to reduce the sum of the items of tax preference
shall be treated as an item of tax preference in the next succeeding
taxable years, in order of time, in which such net operating loss
carryover reduces federal taxable income.
(b) For purposes of this chapter, the term "items of tax preference"
shall mean the federal items of tax preference, as defined in section
fifty-seven of the internal revenue code, of a city resident individual,
estate or trust (but only to the extent apportioned to such estate or
trust under such code), as the case may be, for the taxable year, with
the modifications specified in this subdivision and adjusted as provided
for in subdivision (e) of this section.
(1) The federal items of tax preference with respect to depletion
shall be excluded from the computation of items of tax preference.
(2) Except with respect to recovery property subject to the provisions
of section two hundred eighty-F of the internal revenue code and
recovery property placed in service in this state in taxable years
beginning after December thirty-first, nineteen hundred eighty-four, the
federal item of tax preference with respect to the accelerated cost
recovery deduction shall be excluded from the computation of items of
tax preference.
(3) In the case of a shareholder of an S corporation where the
election provided for in subsection (a) of section six hundred sixty of
the tax law has not been made with respect to such corporation, the
federal items of tax preference of the corporation shall be excluded
from the computation of items of tax preference.
(4) The federal item of tax preference with respect to tax exempt
interest shall be excluded from the computation of items of tax
preference.
(c) Specific deduction.
(1) City resident individuals. Five thousand dollars for individuals
or married persons filing joint returns and twenty-five hundred dollars
for married individuals filing separate returns.
(2) City resident estates or trusts. An amount, not to exceed five
thousand dollars, which bears the same ratio to five thousand dollars as
the items of tax preference of such estate or trust computed under
subdivision (b) of this section bear to the sum of the items of tax
preference of such estate or trust computed under the laws of the United
States for the taxable year, with the modifications described in such
subdivision (b), but without regard to any apportionment of the items of
tax preference between such estate or trust and the beneficiaries
thereof under such laws of the United States.
(d) Disallowance of credits. The credits against tax under this
chapter, except for the credit under section 11-1773, shall not be
allowed as a credit against the tax imposed by section 11-1702.
(e) The items of tax preference determined under subdivision (b) of
this section shall be adjusted where the tax treatment giving rise to
such items will not result in the reduction of the taxpayer's tax
determined under section six hundred one of the tax law for any taxable
year.
Section 11-1724
§ 11-1724 Computation of separate tax on the ordinary income portion
of lump sum distributions received by city resident individuals, estates
and trusts. (a) Amount of separate tax. The amount of tax imposed under
section 11-1703 for any taxable year, with respect to the ordinary
income portion of a lump sum distribution received by a city resident
individual, estate or trust is an amount equal to five times the tax
which would be imposed by section 11-1701 at the rate set forth in
paragraph three of subdivision (a) or (b), whichever may be applicable,
if the recipient of such lump sum distribution were an individual
referred to in such subdivision and the city taxable income were an
amount equal to one-fifth of the excess of:
(1) the total taxable amount of the lump sum distribution for the
taxable year, over
(2) the minimum distribution allowance.
(b) Minimum distribution allowance. For purposes of this section, the
minimum distribution allowance shall be that which is calculated
according to subparagraph (C) of paragraph one of subsection (e) of
section four hundred two of the internal revenue code.
(c) Multiple distributions and distributions of annuity contracts. For
purposes of this section, the rules concerning multiple distributions
and distributions of annuity contracts as specified by paragraph two of
subsection (e) of section four hundred two of the internal revenue code
shall be applicable, except that references to "paragraph (1) (A)" shall
be deemed to be references to this section, and except that only lump
sum distributions (or portions thereof) and distributions of annuity
contracts subject to tax under this chapter shall be included, and
except that references to the secretary shall be deemed to be references
to the tax commission.
(d) Definitions and special rules. For purposes of this section, the
following provisions shall apply, to the extent applicable to the
taxpayer's federal tax on lump sum distributions: (1) the definitions
and special rules as specified in paragraph four of subsection (e) of
section four hundred two of the internal revenue code; and (2) the
special rules relating to (A) individuals who have attained the age of
fifty before January first, nineteen hundred eighty-six and (B) capital
gains, as specified in paragraphs three, four, five and six of
subsection (h) of section eleven hundred twenty-two of the tax reform
act of nineteen hundred eighty-six as enacted by public law 99-514, but
(i) in the event that paragraph three of such subsection is applicable,
clause (ii) of subparagraph (B) of such paragraph shall be applied using
a rate of one and seventy-two hundredths percent, and (ii) in the event
that paragraph five of such subsection is applicable, the words "five"
and "one-fifth" in subdivision (a) of this section shall be read as
"ten" and "one-tenth", respectively, and subdivision (a) of this section
shall be applied by using the rate of tax specified in subdivision (a)
of section 11-1702 as such subdivision was in effect for taxable years
beginning in nineteen hundred eighty-six.
To the extent possible under law, Friends of Devin Balkind for Public Advocate has waived all copyright and related or neighboring rights to New York City Administrative Code. This work is published from: United States.
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