Category: New York
New York Other Additions
ACRS Property; Year of Disposition Adjustment
If you disposed of property that was depreciated for federal purposes using ACRS, and if ACRS depreciation was not allowed for state purposes (see A-15), then you must complete Part 2 of Form IT-399, New York State Depreciation Schedule, to determine the amount to include. Also see Subtraction S-30 on page 72.
Accelerated Cost Recovery System (ACRS) Deduction
If you claimed ACRS depreciation on your federal return for:
- property placed in service during tax years 1981 through 1984 (other than 280F property); or
- property placed in service outside New York State during tax years 1985 through 1993 (other than 280F property) and you elect to continue using IRC 167 depreciation (see TSB‑M‑99(1)l); then include the amount that was deducted in computing your federal AGI.
Disposition of Solar and Wind Energy Systems
If in any tax year beginning on or after January 1, 1981, and ending before December 31, 1986, you took a New York State solar and wind energy credit on property, and if that property was sold or otherwise disposed of in 2011, and if a reportable gain resulted for federal income tax purposes from that sale or disposition, and if you had included the cost of the energy system in the federal basis of the property but did not reduce the federal basis by the state credit, then include the amount of the credit you had previously claimed.
Environmental Remediation Insurance Premiums
If you paid premiums for environmental remediation insurance and you claimed a deduction for such premiums and you also claimed the environmental remediation insurance credit, Form IT-613, Claim for Environmental Remediation Insurance Credit, then include the amount of the environmental remediation insurance credit allowed.
Farmers’ School Tax Credit
If you claimed the farmers’ school tax credit on your 2013 New York State tax return, and if you deducted your school taxes in computing your federal AGI on your 2013 federal return, then you must include the amount of the credit claimed for 2013 on this year’s return. However, do not make this modification if you were required to report the amount of the credit as income on your 2014 federal return.
Health Insurance and the Welfare Benefit Fund Surcharge
If you were a career pension plan member of the NYC Employees’ Retirement System or the NYC Board of Education Retirement System, and if your wage and tax statement(s), federal Form W-2, show an amount that was deducted from your salary for health insurance and the welfare benefit fund surcharge, then include this amount.
Interest Expense on Loans Used to Buy Tax Exempt Bonds
- If your federal AGI includes a deduction for interest expense used to buy bonds, obligations, or securities whose interest income is taxable for federal purposes but exempt from New York State tax, then include that interest expense.
- If your federal AGI includes a deduction for the amortization of bond premiums on bonds whose interest income is taxable for federal purposes but exempt from NYS tax, then include that amortized premium.
- If your federal AGI includes a deduction for expenses relating to the production of income which is taxable for federal purposes but exempt from New York State tax, then include that interest expense.
Investment Income from Certain U.S. Obligations
If during the tax year, you received or were credited with any interest or dividend income from any U.S. government authority, commission, or instrumentality that federal laws exempt from federal income tax but do not exempt from state income tax, then include that income.
IRC Section 168(k) Property Depreciation
With the exception of resurgence zone property and New York liberty zone property described in IRC section 1400L(b)(2), New York State does not follow the federal depreciation rules for IRC section 168(k) property placed in service inside or outside New York State on or after June 1, 2003. If you claimed a depreciation deduction for such property, and if no exception for resurgence zone or New York liberty zone property applies, then complete Part 1 of Form IT-398, New York State Depreciation Schedule for IRC Section 168(k) Property, to determine the amount to include. Attach Form IT-398 to your return.
New Business Investment; Deferral Recognition
If, in any tax year beginning on or after January 1, 1982, and before 1988, you chose to subtract all or a portion of a long term capital gain from your federal AGI because you reinvested that amount in a new New York business, and you sold that reinvestment in 2011, then include the amount that you previously subtracted.
New York City Flexible Benefits Program (IRC 125)
Remember to include this addition modification on line 23 if applicable. If your wage and tax statement(s), federal Form W-2, show(s) that an amount was deducted or deferred from your salary under a flexible benefits program established by New York City or certain other New York City public employers on your behalf, then include this amount. Certain other New York City public employers include:
- City University of New York;
- NYC Health and Hospitals Corporation;
- NYC Transit Authority;
- NYC Housing Authority;
- NYC Off-Track Betting Corporation;
- NYC Board of Education;
- NYC School Construction Authority;
- NYC Rehabilitation Mortgage Insurance Corporation;
- Manhattan and Bronx Surface Transit Operating Authority; and
- Staten Island Rapid Transit Authority.
If you claimed a deduction on your federal return for percentage depletion, then include the amount deducted in computing your federal AGI.
Personal Income Taxes and Unincorporated Business Taxes Deducted in Determining Federal Adjusted Gross Income
You may not deduct personal income taxes or unincorporated business taxes in computing your New York State adjusted gross income. If you included a deduction for state, local, or foreign income taxes, including unincorporated business taxes, when computing your federal AGI, then you must include the amount of that deduction. For example, if you operated a business and deducted New York City unincorporated business tax on your federal Form 1040, Schedule C, as an expense of doing business, include this tax amount.
- Partners - Include your distributive share of state, local, or foreign income taxes, including unincorporated business taxes, deducted in figuring net income.
- S corporation shareholders - If you are a shareholder of a federal S corporation for which a New York S election was in effect, and if that corporation deducted taxes imposed by Article 9-A (general business corporation franchise tax), or Article 32 (banking corporation franchise tax), of the New York State Tax Law, then include your pro rata share of those taxes. (However, you do not need to include state or local taxes of another state, political subdivision of another state, or the District of Columbia.)
Qualified Emerging Technology Investments (QETI)
If you elected to defer the gain from the sale of QETI because you reinvested in a New York qualified emerging technology company, and if you sold that reinvestment in 2014, then you must include the amount previously deferred.
Royalty and Interest Payments Made to a Related Member or Members
For tax years beginning on or after January 1, 2003, New York requires certain taxpayers to add back deductions they took on their federal return for certain royalty payments for the use of intangible property, such as trademarks or patents, and interest payments they made to a related member or members. Include the amount for any such payments you deducted on your federal return.
S Corporation Shareholders; Disposition of Stock or Indebtedness with Increased Basis
Federal law requires holders of stock or indebtedness in a federal S corporation to include undistributed taxable income in their federal AGI and take a corresponding increase in basis. New York law requires a similar increase in basis on disposition of the stock or indebtedness where the federal S corporation is or was a New York C corporation.
If you reported a federal gain or loss because of the disposition of stock or indebtedness of an S corporation, and if that S corporation was a New York C corporation for any tax year beginning after December 31, 1980 (in the case of a corporation taxable under Article 9‑A, general business corporation tax), or December 31, 1996 (in the case of a corporation taxable under Article 32, banking corporation franchise tax), then include the increase in the basis of the stock or indebtedness that is due to the application of IRC sections 1376(a) (as in effect for tax years beginning before January 1, 1983) and 1367(a)(1)(A) and (B) for each tax year that a New York S election was not in effect.
S Corporation Shareholders
If you did not include S corporation distributions in your federal AGI due to the application of IRC sections 1368, 1371(e), or 1379(c), and if these distributions were not previously subject to New York personal income tax because the corporation was a New York C corporation, then include these distributions.
S Corporation Shareholders; Pass-Through Loss or Deduction Items
If you are a shareholder of an S corporation which is a New York C corporation, then include any S corporation pass-through items of loss or deduction you took into account in computing your federal AGI, pursuant to IRC section 1366.
S Corporation Shareholders; Reduction for Taxes
If you are a shareholder of an S corporation for which a New York S corporation election was in effect for the tax year, then include your pro rata share of the S corporation’s reductions for taxes imposed on built-in gains and reductions for taxes imposed on excess net passive income as described in IRC sections 1366(f)(2) and (3).
Safe Harbor Leases (see IRC section 168(f)(8))
If, in computing your federal AGI, you took deductions attributable to a safe harbor lease (except for mass transit vehicles) made under an election provided for by IRC section 168(f)(8) as it was in effect for agreements entered into prior to January 1, 1984, then include those deductions.
Safe Harbor Leases
If your financial matters in 2013 involved a safe harbor lease (except for mass transit vehicles) made under an election provided for by section 168(f)(8) of the IRC as it was in effect for agreements entered into prior to January 1, 1984, then you must include the income that you would have included in your federal AGI if such an election had not been made.
Sales or Dispositions of Assets Acquired from Decedents
Note: This adjustment is not required for property acquired from decedents who died on or after February 1, 2000.
Assets of decedents can sometimes have different bases for state and federal tax purposes. This requires adjustments in the gain or loss on the sale or disposition of those assets.
If, during the tax year, there was a sale or other disposition of any assets that had been inherited or sold or disposed of directly by the estate of a decedent, and if the estate of the decedent was not large enough to require a federal estate tax return, and if the executor or administrator of that estate had valued those assets for New York State income tax purposes at less than their value for federal income tax purposes, then include the difference between (a) the gain or loss on that sale or disposition that you included in your federal AGI for the tax year and (b) the gain or loss that would have resulted if the assets had been valued the same for New York State income tax purposes as for federal income tax purposes.
If you made an election for tax years beginning before 1987 for:
- special depreciation,
- research and development expenditures,
- waste treatment facility expenditures,
- air pollution control equipment expenditures, or
- acid deposition control equipment, then include the amount of depreciation or expenditures relating to these items that was deducted in computing your federal AGI.
Special Additional Mortgage Recording Tax Basis Adjustment
If property on which you paid a special additional mortgage recording tax was sold or disposed of, and a special additional tax was paid before January 1, 1988, and in a prior year you claimed a New York State personal income tax credit for that tax, then include the amount, if any, of the federal basis of the property that was not adjusted to reflect the amount of the credit allowed.
Special Additional Mortgage Recording Tax Deduction
If you deducted special additional mortgage recording tax in computing your federal AGI, and the special additional tax was paid before January 1, 1988, and in a prior year you were allowed a New York State personal income tax credit for that tax, then include the amount deducted. Do not make the addition for the tax paid to record a mortgage on or after January 1, 2004, even if you claimed a credit for that tax.
Sport Utility Vehicle Expense Deduction
If you claimed an IRC section 179 deduction on your federal return with respect to a sport utility vehicle that weighs more than 6,000 pounds, and you are not an eligible farmer as defined for purposes of the farmers’ school tax credit (see Form IT‑217-I, Instructions for Form IT-217, Claim for Farmers’ School Tax Credit), then include the amount of that deduction.
A sport utility vehicle is any four-wheeled passenger vehicle manufactured primarily for use on public streets, roads, and highways. However, sport utility vehicle does not include (1) any ambulance, hearse, or combination ambulance-hearse used directly in a trade or business; (2) any vehicle used directly in the trade or business of transporting persons or property for compensation or hire; or (3) any truck, van, or motor home. A truck is any vehicle that has a primary load‑carrying device or container attached, or is equipped with an open cargo area or covered box not readily accessible from the passenger compartment.
Metropolitan Commuter Transportation Mobility Tax (MCTMT)
If you claimed a federal deduction for the MCTMT imposed under Article 23 of the Tax Law, then include the amount deducted.
Domestic Production Activities Deduction
If you claimed an IRS section 199 domestic production activities deduction in computing your federal AGI, then include the amount deducted.