New York State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in New York, with full citations and the original source on every page.
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New York Advisory Opinion TSB-A-13(5)C / (4)I: How is a 'qualifying census tract' for the historic rehabilitation credit determined when the 2010 census lacks median-family-income data?
A qualifying census tract for the historic rehabilitation credit is determined using a combination of the 2000 federal census and the most recent American Community Survey, because the 2010 census lac…
For New York's 548-day rule, until what age is a domiciliary's child treated as a 'minor' whose New York presence counts against the 90-day limit?
A child is treated as a minor for 548-day rule purposes only until the child turns eighteen. Tax Law § 2(4) defines 'minor' as a person who has not attained age eighteen, so only days a child under 18…
If I'm domiciled in New Jersey but buy a fractional, one-eighth ownership interest in a private residential club in New York City, does that ownership alone make me a New York State statutory resident for income tax purposes?
No. Because the Petitioner's right to use his club residence was capped at a 45-day priority period plus a first-come, first-served reservation system rather than free and continuous access, the Depar…
For New York's '548-day rule,' do the days a Petitioner's minor child spends in New York at a legally separated spouse's home count against Petitioner, and what about days the child is with Petitioner on visitation?
No - if the taxpayer and spouse are legally separated under a written agreement giving the spouse physical custody, the child's days at the separated spouse's New York residence do not count toward th…
If a professional gambler relocated to New York and continued placing full-time, systematic bets on horse races as his sole livelihood, would that activity count as a trade or business for New York income tax purposes?
Yes. Based on the facts presented - near-daily, high-volume pari-mutuel wagering conducted with a statistical betting model as the petitioner's sole source of livelihood - the Department concluded thi…
Are the 10-year installment payments a company makes from its nonqualified deferred compensation plan to two former employees, who are now nonresidents of New York, subject to New York personal income tax and withholding?
No. Because each employee elected to receive Plan distributions as substantially equal annual installments over a 10-year period, the payments qualify as 'retirement income' under 4 U.S.C. § 114(b)(1)…
If I'm a Florida domiciliary and I buy a studio apartment in New York City that I'll only use occasionally, will that make me a New York State or City resident who owes New York income tax?
No, not from ownership alone. If Petitioner remains a Florida domiciliary, merely owning a New York City studio apartment does not by itself make him a New York State or City resident. But if the apar…
Do Metro-North Commuter Railroad maintenance-of-equipment workers who sometimes work in both New York and Connecticut owe income tax only to their home state, or to every state where they perform services?
They must pay income tax to every state where they perform services, plus their resident state. The federal railroad tax exemption in 49 U.S.C. § 11502(a) (added by the Amtrak Reauthorization and Impr…
Can a nonresident partner claim an additional passive activity loss to offset New York's required bonus-depreciation add-back, even though the partnership had a larger overall economic loss?
No. The Tax Law contains no provision letting a nonresident partner claim an extra passive activity loss equal to the New York adjustments. Because the required bonus-depreciation add-back under Tax L…
Does a summer home in a cooperative community that restricts occupancy to a 5-month season and has no working heating system count as a 'permanent place of abode' for New York statutory residency purposes?
No. Because the cooperative's rules limited use of the home to summer occupancy (May 1 through September 30) and Petitioner had the heating system permanently removed around October 5, 2010, the home …
Are irrevocable trusts created by New York grantors exempt from filing New York State income tax returns once all their trustees live outside New York?
The Trusts stopped owing New York income tax on their New York-resident portions once the New York co-trustee resigned, leaving a Connecticut resident as sole trustee, satisfying all three conditions …
For the 548-day rule that lets a New York domiciliary working abroad avoid New York resident status, do partial days spent in a foreign country count toward the 450-day requirement, or only full days?
Both full and part days spent in a foreign country count toward the 450-day threshold under the 548-day rule of Tax Law § 605(b)(1)(A)(ii). The Department applies the same counting method used for New…
If a surviving spouse who is not yet 59 1/2 elects to treat his late wife's IRA as his own, can he still claim New York's $20,000 pension and annuity income subtraction as her beneficiary?
No. Once the surviving spouse elects to roll over and own the IRA as his own account under IRC § 408(d), he stops being a 'beneficiary' of his late wife's IRA, so the regulation that lets a beneficiar…
Can S corporation shareholders increase their stock basis for New York tax purposes to offset the built-in gains tax that gets added back to income under Tax Law section 612(b)(18)?
No. New York's Tax Law has no provision letting shareholders increase their basis in S corporation stock to offset the section 1374 built-in gains tax add-back required by Tax Law § 612(b)(18). Becaus…
If a personal income tax refund from a net operating loss carryback isn't paid within 45 days of the claim, does interest run from the loss year return's original April 15 due date or from the later, extended filing date?
It runs from April 15. Under Tax Law § 688(d), once a carryback refund isn't paid within 45 days of the claim, interest accrues from the due date of the loss year return determined without regard to e…
If I file a joint New York State income tax return with my spouse, will my separate assets become subject to the liens from tax warrants that were filed and docketed against my spouse before we married?
No. Filing a joint New York income tax return does not subject a spouse's separate assets to liens from warrants docketed against the other spouse before the marriage, and does not make that spouse li…
Does an in-service hardship distribution from the Federal Employees' Thrift Savings Plan qualify for New York's income subtraction for federal pensions?
Yes. Tax Law § 612(c)(3)(ii) lets federal employees subtract their pension income from New York adjusted gross income, and because New York exempts in-service distributions paid to its own state emplo…
If someone is a UK citizen who files a federal Form 1040NR as a nonresident alien, but qualifies as a New York State and City statutory resident because they're present here more than 183 days, what income does New York tax?
New York taxes the individual as a statutory resident under Tax Law § 612(a), meaning New York adjusted gross income equals whatever amount is includable in his federal adjusted gross income - here, t…
If a retired SUNY employee rolls their Optional Retirement Program pension into an IRA, are later distributions from that IRA exempt from New York income tax?
The portion of each IRA distribution that represents a return of the rolled-over ORP pension contribution remains exempt under Tax Law § 612(c)(3)(i), since it is still attributable to state employmen…
Was the royalty income a retired professor received from his patented glaucoma treatment, after he became a nonresident of New York, taxable as New York source income?
No. Because the royalties arose from a voluntary patent assignment rather than his university employment, and the patent was not employed in a business, trade, profession, or occupation carried on in …
Once the only New York-domiciled trustee of a resident trust dies and the surviving trustee is a nonresident, does the trust stop owing New York income tax on its income?
Yes, but only prospectively. Once all trustees are non-New York domiciliaries, the trust's corpus (including real and tangible property) is entirely outside New York, and its income is otherwise non-N…
Do periodic distributions from an unfunded, nonqualified deferred compensation plan sponsored by a former employer qualify for New York's $20,000 pension and annuity income subtraction?
Yes. Because the unfunded plan's periodic payments are made after the recipient's separation from service and after he turned 59½, they constitute pension and annuity income eligible for the $20,000 s…
If an S corporation shareholder can't deduct her full flow-through loss on her federal return because of a basis limitation, does she still have to add back the entire bonus depreciation amount for New York tax purposes?
Yes. New York provides no relief: the shareholder must add back the full $1,200,000 of IRC § 168(k) bonus depreciation passed through from her S corporation under Tax Law § 612(b)(8), regardless of th…
Are buy-out payments a professional sports team pays a nonresident athlete to terminate his employment contract taxable as New York source income?
No. Under 20 NYCRR 132.22(b)(4)(i), termination pay and contract or option-year buy-out payments are specifically excluded from the definition of compensation for services rendered as a member of a pr…
If a retired New York public school teacher rolls over her IRC §403(b) tax-deferred annuity into an IRA, are the later IRA distributions subject to New York State personal income tax?
The portion of each IRA distribution that represents a return of the rollover contribution from the school-district-funded 403(b) plan is exempt from New York tax under Tax Law § 612(c)(3)(i), because…
If a NYS Police and Firefighters Retirement System member rolls over a lump-sum distribution into an IRA, 457 Plan, or Roth IRA, how are later distributions from that account taxed for New York income tax purposes?
The rollover itself is not taxed. For a non-Roth IRA or 457 Plan, later distributions are exempt under Tax Law § 612(c)(3)(i) only to the extent they represent a return of the NYSPFRS contribution (tr…
If I roll over my Federal Reserve Bank of New York 401K Thrift Plan (which is exempt from New York tax) into an IRA, will distributions from the IRA still be exempt from New York personal income tax?
Yes, but only in part. The portion of an IRA distribution that represents a return of the rolled-over FRBNY 401K Thrift Plan contribution stays exempt under Tax Law § 612(c)(3)(ii). Any gain or income…
If an employer's electronic system produces a Form W-4 that satisfies the federal electronic-signature requirements, does the New York equivalent, Form IT-2104, automatically satisfy New York's own signature requirements?
No. Meeting the federal electronic-signature requirements for Form W-4 does not automatically satisfy New York's signature requirements for Form IT-2104. The electronic system must separately comply w…
When a taxpayer files an amended New York income tax return to claim a refund based on federal changes, does interest on the overpayment start running from the date of the original return or the date of the amended return?
Interest runs only from the date the amended New York return was filed, not from the original return's filing date. Under Tax Law § 688(a)(3), no interest is allowed for any day before an amended retu…
Is a former Merrill Lynch employee's reinstated restricted stock and stock option income, given in exchange for signing a noncompetition agreement, taxable by New York once he becomes a nonresident?
No. The Department concluded that the reinstated nonqualified RSUs and stock option units were consideration solely for the nonresident's noncompetition agreement, not compensation for work performed …
Does an investment in a certified Qualified Emerging Technology Company made in the form of convertible debt qualify for New York's QETC tax credit, and if so, in which tax year is the credit claimed?
No - not until the note converts to stock. A convertible note is a loan, not a contribution of property or ownership interest, so it isn't a 'qualified investment' under Tax Law § 606(r)(1)(C) when it…
Is compensation a U.S. citizen who lives in Canada earns working in New York for the Consulate General of Canada considered New York source income for personal income tax purposes?
Yes, but only to the extent the compensation is included in the individual's federal adjusted gross income. Because the petitioner performs his services solely in New York, that pay is New York source…
Will a nonresident property owner become a New York domiciliary for personal income tax purposes just by registering to vote in a New York town?
Not automatically. Voter registration is only a secondary factor in a domicile analysis, considered only if the primary factors - business involvement, time spent at the residence, personal effects ke…
Is a New York resident's distribution from an out-of-state 529 college savings plan subject to New York State personal income tax if it's used for qualified tuition expenses?
No. Because the distribution qualifies as a federal tax-free withdrawal under IRC § 529(c) and no Tax Law § 612 modification requires adding it back, the entire distribution - including earnings - pas…
Can a New York taxpayer subtract military active-duty pay and a related state-employer supplement from federal adjusted gross income under Tax Law section 612(c)(8-b)?
No. Section 612(c)(8-b) only lets members of the New York State organized militia (Army/Air National Guard, inactive National Guard, Naval Militia, and the New York Guard) subtract active-duty pay. Be…
Can the individual members of a religious or apostolic organization exempt under IRC section 501(d) claim a pass-through share of the organization's New York investment tax credits and other tax incentives?
No. Even though a section 501(d) organization files a federal partnership return (Form 1065) to report its common-treasury income, it remains a corporation, not a partnership, and Tax Law section 607(…
When a deceased parent's IRA is split equally between two beneficiaries, does each beneficiary get the full $20,000 pension and annuity income exclusion, or must they share a single $20,000 amount?
They must share it. Under 20 NYCRR 112.3(c)(2)(iv), the decedent's $20,000 annual pension and annuity exclusion is allocated among multiple IRA beneficiaries in the same ratio as the distribution is s…
Will adding another party - Queens West Development Corporation (QWDC) - to a brownfield cleanup agreement and Certificate of Completion jeopardize the brownfield tax credits otherwise allowable to the original petitioners under Tax Law sections 21, 22, and 23?
No. The Department ruled that adding QWDC to the brownfield cleanup agreements and Certificates of Completion for the sites does not jeopardize the Petitioners' own brownfield redevelopment, real prop…
Is the gain from selling a passive interest in a lower-tier partnership that owns New York real estate treated as New York source income for a nonresident partner?
No. Because Petitioner never used its interest in the lower-tier partnership (589 Associates, LP) in a New York trade or business - it was purely a passive investment, not pledged as collateral or oth…
If a New York State employee directly transfers funds from a New York State-sponsored IRC 403(b) plan to a different 403(b) plan, are the retirement benefits later received from that second plan still exempt from New York personal income tax?
Yes, if New York State actually contributed to the original 403(b) plan - the direct plan-to-plan transfer is not a taxable distribution, so the transferred funds and their earnings keep their exempt …
How is New York source income determined for guaranteed payments a nonresident law firm partner receives, when he personally works only from an out-of-state office and serves mostly out-of-state clients?
Guaranteed payments to a nonresident partner are treated as a distributive share of partnership income, not personal compensation, so New York sourcing follows the partnership's own books and records …
When a partner's interest in a partnership is reduced after brownfield property is placed in service but within the same partnership tax year, which ownership percentage governs the partner's share of the brownfield redevelopment tax credit?
The partner's ownership percentage on the date the qualified tangible property is placed in service controls, even if that percentage is later reduced within the same partnership taxable year. Under I…
Does building and operating a new natural gas vehicle-fueling station count as a 'new business,' so the owner can get a refund of unused investment tax credit instead of just carrying it forward?
Yes. Because Petitioner's compressed natural gas fueling station is not substantially similar in operation and ownership to his existing farming, mortgage, life insurance, and investment businesses, i…
If an incapacitated Florida resident is moved into a New York nursing home, does that make her a New York resident for personal income tax and estate tax purposes?
No — for both taxes. A person is a New York resident for personal income tax only if domiciled in New York, or, if not, only if she keeps a permanent place of abode in New York for substantially all t…
If a nonresident leases out a membership (seat) in a New York stock or commodity exchange, or later sells it, is that rental income or sale gain New York source income?
Generally no for a single lease or a single sale contract - a lone transaction usually lacks the continuity and regularity needed to be a business carried on in New York, so the income isn't New York …
Is a lump-sum distribution from an employer's nonqualified supplemental retirement plan taxable New York source income when it's paid to someone who becomes a nonresident before receiving it?
No, assuming the plan qualifies. Because the SEFCU Nonqualified Plan was maintained solely to provide the petitioner retirement benefits exceeding IRC §§ 401(a)(17) and 415 limits, the lump sum is 're…
Will a same-sex marriage legally performed in Canada be recognized for New York State and New York City personal income tax purposes?
No. Because Tax Law §§ 607(b) and 651(b) tie New York marital and filing status to federal income tax status, and the federal Defense of Marriage Act (1 U.S.C. § 7) did not recognize same-sex marriage…
Will New York recognize a same-sex marriage performed in Canada for state personal income tax filing status purposes?
No. Because Tax Law §§ 607(b) and 651(b) tie New York marital and filing status to federal determinations, and the federal Defense of Marriage Act (1 U.S.C. § 7) did not recognize same-sex marriages f…
Is the federal gain a nonresident partner recognizes under IRC sections 731 and 752, when a New York investment partnership pays down its liabilities, treated as New York source income?
No. Because federal law treats the decrease in the partner's share of partnership liabilities as a deemed distribution that produces gain from the sale or exchange of the partnership interest, and gai…
Can amounts rolled over from another state's 529 college savings plan, or rebates accumulated through the Upromise Rewards Service, be deducted as contributions to New York's 529 plan under Tax Law section 612(c)(32)?
Yes to both. Amounts rolled over from another state's 529 plan into the New York 529 Plan - including the earnings portion not taxed under IRC section 529(c)(3)(C)(i) - count as a deductible 'contribu…
If a nonresident owns a seat (membership) on a New York stock or commodity exchange and leases it out for income after moving out of state, is that rental income - and any later gain on selling the seat - taxable as New York source income?
Yes. Because an exchange seat has its business situs in New York, leasing it out with regularity and permanency is carrying on a business in New York under Tax Law § 631(b)(1), so the rental income is…
Are a retired New York public school teacher's IRC section 403(b) tax-deferred annuity (TDA) distributions exempt from New York personal income tax?
Not automatically. TDA distributions made under an Education Law § 3109 salary-reduction agreement qualify for the pension exemption in Tax Law § 612(c)(3)(i) only if they are attributable to amounts …
Does an LLC taxed as a partnership owe New York's annual filing fee for a year in which its only income was bank interest on proceeds from a prior property sale, with no other business activity?
No. Because the LLC's only 2003 income was interest on a bank account, and that money was not employed in any business, trade, profession, or occupation carried on in New York, the LLC had no New York…
Was a 2003 claim for refund on an amended 1999 New York personal income tax return, filed after the original return itself was filed late, timely under the Tax Law's statute of limitations?
Yes. Because the petitioner's original 1999 New York return was filed (and the tax paid) on August 21, 2001, Tax Law § 687(a) gave him three years from that filing date - until August 21, 2004 - to fi…
Are wages paid to an injured firefighter who was reassigned to desk duty (rather than retired) subject to New York State personal income tax and withholding?
Yes. Because the firefighter was reassigned to desk duty rather than retired on disability, and was not permanently and totally disabled, his wages don't qualify for the Tax Law § 612(c)(3-b)(i) disab…
If a Connecticut domiciliary who spends over 183 days working in New York donates the use of his East Hampton house to a charity for three months, does he still maintain a permanent place of abode in New York for statutory residency purposes?
No. Because the individual executes a written lease giving the charity sole and exclusive use of the house for a continuous three-month period and has no access to it during that time, the East Hampto…
Can an LLC's members still claim New York's empire zone wage tax credit for 2003 and 2004 if the credit's five-year window already began back in 1998?
No. Under Tax Law § 606(k), the empire zone wage tax credit is allowed for only five consecutive taxable years, beginning with the first year a taxpayer's wages qualified. Because Petitioner's members…
If a Connecticut resident occasionally works in New York, then later takes a New York City job and buys a Manhattan apartment, when does he have to file a New York nonresident or resident personal income tax return, and how does he allocate his wages?
In each year described, the individual - a Connecticut domiciliary who never met both parts of New York's statutory residency test (a permanent place of abode maintained substantially all year plus mo…
Can a nonresident of New York deduct contributions made to a spousal IRA when figuring out New York source income?
Yes, but only in part. Because the deduction stems from the husband's compensation and he works in New York, the federal deduction for contributions to the spousal IRA is treated as connected to New Y…
When a trust beneficiary uses a power of appointment to create a new appointive trust, whose domicile decides whether that new trust is a New York resident trust?
It depends on whether the power is general or special. If the donee holds a general power of appointment (exercisable in favor of the donee, the donee's estate, or creditors), the donee is treated as …
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These are official tax letter rulings and advisory opinions issued by New York's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.