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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Does a travel planner who organizes group trips for solo female travelers owe New York sales tax on her fee, and is the fee subject to personal income tax?
No sales tax, but yes income tax. The Department concluded that a New York resident's fees for travel planning and concierge services (organizing group trips for solo female travelers) are not subject…
How is a bonus and restricted stock units paid in February 2019 sourced for a taxpayer who became a New York part-year resident in October 2018?
Both are New York State and City income for 2019. The 2018-performance bonus was not 'fixed and determinable' when the taxpayer became a resident in October 2018 (it depended on full-year performance …
Are a beneficiary's distributions from an inherited New York City teacher tax-deferred annuity (403(b)) exempt from New York State and City income tax?
A lump-sum distribution the beneficiaries take from the inherited TRS NYC tax-deferred annuity (TDA) is exempt from New York State and City income tax. If they instead roll it into an inherited IRA, t…
Must a New York company withhold New York State income tax from fees it pays to a non-employee member of its board of directors who is a foreign citizen and resident?
No. The company is not subject to the withholding requirement under Tax Law § 671 for these payments. New York's withholding rules apply to wages paid to an 'employee,' and that term (borrowed from fe…
Is an Air National Guard member's pay for federal Title 32 homeland-defense duty during the COVID-19 emergency excluded from New York taxable income?
Yes. The pay may be excluded. Although the duty was ordered under Title 32 of the U.S. Code (not Title 10), the member served within New York at the Governor's direction as part of the state's coronav…
If a charitable donation is fully deductible federally but exceeds my lower New York adjusted gross income, can I carry the unused amount to later New York returns?
No. There is no provision in the New York Tax Law allowing a carryover of charitable donations to later years. Because the donation created no federal carryover (it was fully deducted federally), New …
Are a retired federal employee's periodic (non-lump-sum) Thrift Savings Plan distributions exempt from New York State income tax?
Yes. Distributions other than a lump sum from a federal Thrift Savings Plan (TSP) funded by the employee and the federal government qualify for the federal-employee pension subtraction under Tax Law §…
Can New York waive the refund statute of limitations for claims filed more than three years after the returns, based on a tax-treaty competent-authority determination?
No waiver is needed. Although the general limit is three years (Tax Law § 687(a)), a refund claim that is attributable to a federal change or correction gets an extended deadline under Tax Law § 687(c…
Are a nonresident retired partner's payments from a CPA firm's partnership agreement exempt from New York income tax as retirement income or an annuity?
No. The payments are taxable as New York source income. They are not protected 'retirement income' under the federal Pension Source Law (4 USC § 114) because they are not 'substantially equal periodic…
Are IRA distributions exempt from New York income tax when the IRA was funded only by rolling over a retired federal employee's Thrift Savings Plan?
Yes, but only for the portion that represents the rolled-over Thrift Savings Plan (TSP) amount. That portion qualifies for the federal-employee pension subtraction under Tax Law § 612(c)(3)(ii). Gains…
When a retired NYC police officer rolls exempt SOCA Fund and VSF DROP money into an IRA, do later IRA withdrawals still qualify for New York's public-pension subtraction?
Yes, but only to the extent the withdrawal represents the rolled-over SOCA Fund and VSF DROP amounts. Those qualify for the public-employee pension subtraction under Tax Law § 612(c)(3)(i). Any other …
Are a retired federal employee's Thrift Savings Plan (TSP) distributions taxable in New York, and does the exemption survive a rollover into an IRA?
TSP distributions are not subject to New York income tax; they get the federal-employee pension subtraction under Tax Law § 612(c)(3)(ii). When TSP money is rolled into an IRA, only the portion that r…
If a New York public employee leaves before vesting and gets a refund of his retirement-plan contributions plus earnings, is that refund subject to New York State income tax?
No. The refund is tax-exempt retirement income. Because the petitioner was a public employee (CUNY) who left before vesting, the returned contributions and the earnings on them qualify for the public-…
Can a partnership's New York resident partners subtract their share of payroll expenses that were added back federally under IRC 280C because the firm claimed the research credit?
Yes. When a partnership claims the IRC § 41 research credit, IRC § 280C(c)(1) requires it to reduce (add back) the related wage deductions, which raises federal income. New York gives resident partner…
Does New York's $5 million Rehabilitation of Historic Properties Credit cap apply per structure or per application when several related historic buildings are filed on one application?
Per structure. The $5 million cap on the Rehabilitation of Historic Properties Credit applies on a per-certified-historic-structure basis, not per application. Because Tax Law § 606(oo)(1)(A) sets the…
When does the brownfield site-preparation credit window close after a Certificate of Completion, and do later 'Phase II' development costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issues, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Are payments from a former employer's nonqualified deferred compensation plans, received after the taxpayer retired and left New York, subject to New York income tax?
No. The distributions qualify as 'retirement income' under the federal Pension Source Law (4 USC § 114), which bars states from taxing the retirement income of a nonresident. They are also not New Yor…
How do you calculate the portion of IRA withdrawals that is exempt from New York income tax when the IRA was funded solely with federal Thrift Savings Plan rollover funds?
Only the portion representing the rolled-over TSP amount is exempt under Tax Law § 612(c)(3)(ii); post-rollover gains are not and may instead use the $20,000 subtraction under § 612(c)(3-a). One accep…
Does a county terminal-pay 401(a) plan funded only by converting an employee's accrued leave qualify for New York's full public-pension subtraction?
No. Distributions from the plan (and from IRAs funded by rolling it over) do not qualify for the full public-employee pension subtraction under Tax Law § 612(c)(3)(i), because converting an employee's…
If a home straddles the Bronx/Yonkers line but the house itself sits entirely in Yonkers, are the owners Yonkers or New York City residents for income tax?
Yonkers residents. Residency turns on where you are domiciled and maintain a permanent place of abode. Although the property straddles the border and has a Bronx mailing address, the actual dwelling s…
Is an IRA funded by rolling over a federal employee's Thrift Savings Plan exempt from New York income tax, and what about other private retirement accounts?
The IRA distributions are exempt only to the extent they represent the rolled-over Thrift Savings Plan (TSP) amount, which qualifies for the federal-employee pension subtraction under Tax Law § 612(c)…
Are an employer's nonqualified deferred-compensation payments to nonresidents protected from New York tax, including payments made before employment ends?
Only the post-termination payments are protected. Payments from an excess-benefit nonqualified deferred-compensation plan made to a nonresident after termination of employment are 'retirement income' …
Is nonqualified deferred compensation paid to a nonresident in substantially equal annual payments over 10 years subject to New York income tax withholding?
No. Two series of substantially equal annual payments made over a 10-year period under a nonqualified deferred compensation plan qualify as 'retirement income' protected by the federal Pension Source …
Are a retired federal employee's TSP distributions (lump sum or periodic) and an IRA funded by a TSP rollover exempt from New York income tax?
TSP distributions, whether taken as a lump sum or as periodic payments, may be subtracted from federal income under the federal-employee pension subtraction (Tax Law § 612(c)(3)(ii)). When TSP money i…
When does a brownfield site count as 'used primarily for manufacturing,' raising the tangible-property credit cap from $35 million to $45 million?
When manufacturing is the principal use - here, 50,000 of 80,000 square feet (more than half). The Brownfield Redevelopment Tax Credit's tangible-property credit component is capped at the lesser of $…
Is a nonresident limited partner's loss on liquidating a partnership New York source income when the partnership sold its New York building the day before?
No. The loss is not derived from or connected with New York sources. New York source treatment for a partnership-interest loss depends on the partnership owning New York real property worth at least 5…
Can an irrevocable resident trust with an out-of-state trustee avoid New York fiduciary income tax if a small share of its income is New York source income?
No. The trust is taxed by New York on all its income. A resident trust escapes tax only if it meets all three conditions of Tax Law § 605(b)(3)(D): no New York trustee, no New York corpus, and no New …
Who decides whether a building is in a qualifying census tract for New York's historic rehabilitation tax credit, and is that decision binding on the Tax Department?
The New York State Office of Parks, Recreation and Historic Preservation (OPRHP) decides, and its determination is controlling. Where OPRHP has determined and certified that a building is in a qualify…
Are a couple Yonkers residents or New York City residents when their house sits entirely in Yonkers but the front yard, and the mailing address, are in the Bronx?
They are Yonkers residents, subject to the Yonkers resident income tax surcharge. Residency follows the location of the dwelling and the couple's domicile, not the Bronx mailing address; the residenti…
For a combined-group member in START-UP NY, must income from a previously conducted line of business be disregarded for the tax elimination credit even if earned out of state, and do employees lose their wage exemption if the business faces proportional recovery?
Yes to both protections. The subsidiary must disregard income from a line of business it previously conducted when computing its tax factor for the Tax-free NY area tax elimination credit, even if tha…
Is a nonresident executive's office, where he sleeps on work nights, a 'permanent place of abode' that could make him a New York statutory resident?
No. The office is not a permanent place of abode under Tax Law § 605(b)(1)(B). The taxpayer lacked unfettered access (he could stay only on work nights), the space had no cooking or bathing facilities…
Is the requirement that a taxpayer forfeit current capital loss and net operating loss carryforwards a valid condition for accepting an offer in compromise, and which losses does it cover?
Yes. Condition 5G of Form DTF-4.1, requiring forfeiture of current capital loss and net operating loss carryforwards, is a valid exercise of the Commissioner's discretion under Tax Law § 171(15). It c…
When is brownfield tangible property 'placed in service,' and which redevelopment costs qualify as site preparation costs versus the tangible property component of the brownfield credit?
Tangible property is 'placed in service' when a separately occupied portion of the site is ready for its assigned function; if placed in service before the Certificate of Completion, it stays eligible…
Does a pension from the Battery Park City Parks Conservancy Corporation, a subsidiary of a public benefit corporation, qualify for New York's public-employee pension subtraction?
Yes. The Battery Park City Parks Conservancy Corporation (BPCPCC) is treated as part of 'this State, its subdivisions and agencies' for the public-employee pension subtraction under Tax Law § 612(c)(3…
Is a building in a qualifying census tract for the historic rehabilitation credit when the Office of Parks, Recreation and Historic Preservation has approved it, even though the tract's median income later looked too high?
Yes. The determination by the New York State Office of Parks, Recreation and Historic Preservation (OPRHP) that the building is in a qualifying census tract for the rehabilitation-of-historic-properti…
Can a taxpayer increase his New York basis in out-of-state municipal bonds by the premium paid, when New York taxes the interest but allowed no deduction for the amortized premium?
No. New York determines bond basis under federal law. Because the taxpayer must amortize the premium on tax-exempt bonds and reduce basis each year (IRC § 171; § 1016(a)(5)), and no New York Tax Law p…
Is a lump-sum distribution from a federal employee's Thrift Savings Plan (TSP) exempt from New York income tax?
Yes. The lump-sum TSP distribution attributable to contributions made by the federal employee and his federal employer is exempt from New York income tax under the federal-employee pension subtraction…
Can a New York taxpayer subtract gambling losses (up to winnings) from income as a subtraction modification, instead of itemizing?
No. There is no basis in the Tax Law for a subtraction modification for gambling losses. Because New York starts from federal adjusted gross income (which includes full gambling winnings), losses can …
Does the Metropolitan Commuter Transportation Mobility Tax (MCTMT) apply to the wages an employer pays to federal work-study students?
No. The MCTMT does not apply to the part of an employer's payroll expense attributable to wages paid to federal work-study students. MCTMT payroll expense uses the IRC definition of wages, which exclu…
What is the last year a brownfield tangible-property credit may be claimed when the Certificate of Completion issued December 31, 2008?
The tangible-property credit may be claimed for qualified property placed in service for up to ten taxable years after the year the Certificate of Completion (CoC) issued. With a December 31, 2008 CoC…
Are nonqualified deferred-compensation distributions paid to a nonresident in installments over 10 years 'retirement income' exempt from New York tax and withholding?
Yes. Distributions from a nonqualified deferred-compensation plan paid as substantially equal periodic payments over at least 10 years are 'retirement income' under the federal Pension Source Law (4 U…
Must a nonresident include in New York source income a lump-sum distribution from an excess-benefit nonqualified deferred-compensation plan earned while working in New York?
No. The lump-sum distribution from the excess-benefit plan to a nonresident is not subject to New York income tax under the federal Pension Source Law (4 USC § 114). The plan is a nonqualified deferre…
Is a lump-sum payment from a former employer's 401(k) restoration plan, distributed after the taxpayer retired and left New York, exempt from New York State and City tax?
Yes. The lump sum from the nonqualified 401(k) restoration plan is exempt under the federal Pension Source Law (4 USC § 114) because the taxpayer was a nonresident when paid. It also did not accrue to…
When does the brownfield site-preparation credit window close, and do later Phase II construction costs qualify as site preparation costs?
The site-preparation credit may be claimed for up to five tax years after the year the Certificate of Completion (CoC) issued, so a December 2013 CoC means the last year is 2018. Phase II excavation, …
Are a couple Yonkers residents or New York City residents when their house sits entirely in Yonkers but the front yard and mailing address are in the Bronx?
They are Yonkers residents, subject to the Yonkers resident income tax surcharge. Residency follows the dwelling's location and the couple's domicile; the residential structure sits wholly in Yonkers …
Does the historic homeownership credit's requirement that 5% of expenditures be on the exterior apply to each year's project, or to the cumulative multi-year rehabilitation?
It applies to each separately certified rehabilitation project. Because the credit is allowed only on final certification of a three-step process, a taxpayer who claims year-by-year (filing a Part 3 e…
Are a federal employee's Thrift Savings Plan distributions exempt from New York tax, including for a private IRA she rolled into the TSP, and can she also use the $20,000 subtraction?
The TSP distributions attributable to her federal employment (contributions by her and her federal employer, plus their earnings) are exempt under Tax Law § 612(c)(3)(ii). The portion attributable to …
Is a nonresident's gain on redeeming S-corporation stock, and the interest on the installment note, New York source income when the corporation owns New York real estate?
The interest on the installment note is not New York source income (it is intangible personal property). But the portion of the gain attributable to the corporation's New York real property is New Yor…
If a retired SUNY employee does a direct trustee-to-trustee rollover of 401(a) and 403(b) tax-deferred annuities into an IRA, is the rolled-over money later taxed as New York income?
No. Because the retiree's Existing Plans were funded with contributions from the State University of New York, a New York State public employer, the portion of any future IRA distribution that represe…
Can a New York resident who made post-tax contributions to a Keogh Plan years ago, and later rolled that account into an IRA, exclude the return of those already-taxed contributions from New York taxable income once required minimum distributions begin?
No - Article 22 of the Tax Law contains no provision letting a resident subtract post-tax Keogh Plan contributions from federal gross income when the rolled-over IRA is later distributed. However, Tax…
Is a pension from the World Bank (International Bank for Reconstruction and Development) exempt from New York personal income tax as a pension from a U.S. government instrumentality?
No. The Department concluded the World Bank is not an instrumentality of the United States, so a World Bank pension doesn't qualify for the Tax Law § 612(c)(3)(ii) subtraction available for pensions o…
Is a telecommunications carrier protected from the section 186-e excise tax if it accepts a resale certificate from a foreign carrier that has no certificate-of-authority number?
No. A section 186-e resale certificate (Form CT-120) is not properly completed without the purchaser's certificate of authority (COA) number, so it cannot rebut the presumption that the sale is taxabl…
Is the salary a U.S. Foreign Service officer earns while assigned to the U.S. Mission to the United Nations in New York City subject to New York State personal income tax?
No federal or state law exempts Foreign Service wages from New York tax the way Tax Law § 631(e) exempts military pay. If Petitioner is a nonresident, his USUN wages are New York source income taxable…
Can someone who holds only a remainder interest in a home - where a parent has a life estate and lives there - still qualify for New York's historic homeownership rehabilitation credit?
Yes, at least on two of the credit's requirements. New York held that a remainder interest is an ownership interest under EPTL § 6-5.1, satisfying Tax Law § 606(pp)(5)(A)(ii), and that residing at the…
If a New Jersey resident enrolled in a long-term disability plan while working in New York, are the disability benefits he now receives New York source income subject to New York State personal income tax?
Yes, the long-term disability benefits are New York source income because Petitioner enrolled in the plan while actively working in New York. Whether they are actually taxed depends on whether they en…
When is solar energy equipment considered 'placed in service' for New York's residential solar energy credit if the equipment is installed while a new home is still under construction?
The equipment is treated as placed in service when its installation in the new home is complete and the home is ready for occupancy as the taxpayer's principal residence - not simply when the panels a…
Do installment payments from a nonqualified supplemental retirement plan, received after age 59 1/2 and after retiring, qualify as 'pensions and annuities' for New York's $20,000 income subtraction?
Yes. Because the installments were paid after the petitioner separated from employment and after he turned 59½, and were attributable to personal services he performed for his former employer before r…
New York Advisory Opinion TSB-A-13(7)C / (6)I: Do payments by members who fund a QETC's research and development qualify for the qualified emerging technology company capital tax credit?
No. The members who funded the company's research and development cannot claim the QETC capital tax credit, because they were owners of the company from inception, holding more than a 10% interest, an…
For New York's '548-day rule,' do the days a taxpayer's minor child spends in New York at a legally separated spouse's home count against the taxpayer, and what about scheduled visitation days?
No - once the taxpayer is legally separated under a written agreement giving the spouse physical custody, the child's ordinary time at the spouse's New York residence does not count toward the 548-day…
Is a lump-sum settlement of SERP and deferred compensation plan benefits that a nonresident received after his former employer's bankruptcy exempt from New York income tax?
Yes. Federal law bars states from taxing a nonresident's retirement income, and a settlement payment takes on the same tax character as the payments it replaces, so the Department ruled that JPMorgan …
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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.