Statutes, codes, and regulations
New York Codes, Rules and Regulations
Title 20 - DEPARTMENT OF TAXATION AND FINANCEChapter II - Income Taxes and Estate TaxesSubchapter A - New York State Personal Income Tax Under Article 22 Of The Tax LawArticle 2 - Residents
Part 120 - Resident Credits For Income Taxes Of Another State, A Political Subdivision Of Another State, The District Of Columbia, Or A Province Of Canada
Section 120.2 - Limitations

N.Y. Comp. Codes R. & Regs. tit. 20 § 120.2

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Current through Register Vol. 46, No. 45, November 2, 2024
Section 120.2 - Limitations

Tax Law, § 620(b)

The amount of the credit against ordinary tax for income tax imposed by another jurisdiction is subject to the limitations provided in this section. Where credit is claimed against ordinary tax for income taxes imposed by two or more taxing jurisdictions, as defined in section 120.1(b)(2) of this Part, these limitations must be applied separately to each jurisdiction for each credit being claimed. See section 120.3 of this Part for the limitations in cases where such credit is claimed for income taxes imposed by both a state and one or more of its political subdivisions.

(a) The credit for the taxable year cannot exceed the income tax payable to the other jurisdiction. When both a state (other than New York State) and one or more of its political subdivisions impose income taxes on the same or different amounts of income derived from sources within such state as defined in section 120.4(d) of this Part, see section 120.3 of this Part. If a taxpayer on his or her New York State personal income tax return claims a credit pursuant to this Part for the income tax or taxes (or any portion thereof) of another jurisdiction, and it is later determined that the amount of such tax or taxes (or the portion for which credit was claimed) is more or less than the amount of credit claimed with respect to such tax or taxes on the taxpayer's New York State personal income tax return, he or she must file an amended New York State personal income tax return at the address indicated on the form and in the instructions.
(b) The credit for the taxable year cannot exceed the amount obtained by multiplying the New York State tax payable (see section 120.4[b] of this Part) by a percentage determined by dividing the portion of the taxpayer's New York income subject to taxation in such other jurisdiction (the numerator) by the taxpayer's total New York income (the denominator).
(c) The credit for the taxable year cannot reduce the New York State tax payable to an amount less than would have been due if the income subject to taxation by the other jurisdiction was excluded from the taxpayer's New York income.
(d) When a taxpayer elects to claim the foreign tax credit for Federal income tax purposes, the resident credit for income tax imposed by a province of Canada will be allowed for the portion of the Canadian provincial tax that is not claimed for Federal income tax purposes for the taxable year or a preceding taxable year. If any amount of such portion of the Canadian provincial tax is claimed for Federal purposes in a succeeding taxable year, the amount claimed must be added back for New York State purposes in such succeeding taxable year. The Canadian provincial tax will be treated as being claimed last for Federal income tax purposes and for purposes of this subdivision.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 120.2