2019 - Forms corrections and changes (posted in 2019)

On page 28, line 33 instructions should read as follows:

2. Use Form IT-196, New York Resident, Nonresident, and Part-Year Resident Itemized Deductions, and its instructions to compute your New York itemized deduction. Compare the Form IT-196, line 49 amount to your New York standard deduction amount from the standard deduction table. For greater tax savings, enter the larger of these amounts on line 33 and mark an X in the appropriate box, Standard or Itemized.

On page 4, Part 3, line 1c, replace the words “dividends received deduction (DRD)” with the words “special deductions”.

On page 4, Part 3, line 1e, replace the acronym “DRD” with the words “special deductions”.

• On page 15, 2nd column, under Line 1a instructions, a new 3^rd paragraph is added that reads:
  
  “Note: If you were required to include in your calculation of federal CTI an IRC section 965(a) inclusion amount, the inclusion is already reflected in the line 1a amount. Also reflected in the line 1a amount is the deduction amount allowed under IRC section 965(c). §208.9(b)(23) requires that any IRC section 965(c) amount deducted when computing CTI must be added back to FTI. The addback of the IRC section 965(c) deduction amount is included on line 1c, Addback federal consolidated special deductions. Also reflected in the line 1a amount is the IRC section 250(a)(1)(A) deduction, as reduced by IRC section 250(a)(2) (excluding captive REITS and captive RICs). §208.9(b)(24) requires that any IRC section 250(a)(1)(A) amount deducted (as reduced by IRC section 250(a)(2)) when computing federal CTI must be added back to federal CTI. The addback of the IRC section 250(a)(1)(A) amount deducted (as reduced by IRC section 250(a)(2)) is included on line 1c, Addback federal consolidated special deductions. You are allowed the IRC section 250 deduction for the portion of such deduction computed under IRC section 250(a)(1)(B)(i), as reduced by IRC section 250(a)(2). Use Form CT-225-A to report this subtraction modification.”
   
• On page 15, 2nd column, Line 1a instructions, under “If you file Form 1120-REIT, use:”, a new 3^rd bullet is added that reads:|
  
  “Note: If you are required to include a captive REIT in your combined return, and the captive REIT is required to include in its calculation of REIT taxable income an IRC section 965(a) inclusion amount, such inclusion, as well as the corresponding IRC section 965(c) amount, is already reflected in the line 1a amount. §208.9(b)(23) requires that any IRC section 965(c) amount deducted when computing federal CTI must be added back to federal CTI. The addback of the IRC section 965(c) deduction amount is reported on Form CT-225-A (do not include this amount on line 1c). A federal election can be made under IRC section 965(m)(1)(B). When this election is made, New York State conforms to it.”
  
  
• On page 16, 1st column, Line 1a instructions, under “If you file Form 1120-RIC, use:”, a new 4th bullet is added that reads:
  
  “Note: If you are required to include a captive RIC in your combined return, and the captive RIC is required to include in its calculation of investment company taxable income an IRC section 965(a) inclusion amount, this inclusion, as well as the corresponding IRC section 965(c) amount, is already reflected in the line 1a amount. §208.9(b)(23) requires that any IRC section 965(c) amount deducted when computing federal CTI must be added back to federal CTI. The addback of the IRC section 965(c) deduction amount is reported on Form CT-225-A (do not include this amount on line 1c).”

• On page 4, 1^st column, the text for code A-510, IRC section 965(c) deduction amount, is changed to read as follows:
  
  “(only CT-3-A and CT-33-A filers that have a combined group member that is a captive REIT or captive RIC) – You must include the amount of deduction allowed under IRC section 965(c) to the extent such amount was deducted in computing your federal CTI reported on Form CT-3-A, Part 3, line 1g, or, for Form CT-33-A, on Schedule D, line 64 (do not include this amount on Form CT-3-A, line 1c, or on Form CT-33-A, Schedule D, line 65). Note: A captive REIT can make a federal election under IRC section 965(m)(1)(B). When this election is made, New York State conforms to it. (§§ 208.9(b)(23) and 1503(b)(2)(W))”

Form IT-201, line 77 should read as follows:

77        Amount overpaid (if line 76 is more than line 62, subtract line 62 from line 76; see page 33)

Form IT-203, line 67 should read as follows:

67        Amount overpaid (if line 66 is more than line 59, subtract line 59 from line 66; see page 37)

Caution: This update has been superseded by the 4/9/2019 Form IT-205-I update, posted below.

On page 1, under General changes for 2018, under the first bulleted item (The federal Tax Cuts and Jobs Act (TCJA) – Public Law 115-97), after the 1^st paragraph, add the following new paragraph:

Note: For Form IT-205 filers, New York State did not decouple from the new federal rules (under the federal TCJA) relating to itemized deductions. The information in TSB-M-18-(6)I, New York State Decouples from Certain Personal Income Tax Internal Revenue Code (IRC) Changes for 2018 and after, relating to itemized deductions on New York State individual income tax returns, does not apply to Form IT-205 filers. For instance, Form IT-205 filers are not allowed to deduct miscellaneous itemized deductions (such as investment advisory fees) and cannot deduct any amount of state and local taxes paid that is over the federal $10,000 limit.

Caution: This update has been superseded by the 4/30/2019 Form IT-205-I update, posted below.

Note: The Tax Department is developing guidance to address pending amendments to the New York State Tax Law in the 2019-2020 New York State budget that impact 2018 Form IT-205, Fiduciary Income Tax Return filers with certain deductions. Once signed into law, the amendments related to the deductions listed below will be effective retroactive to January 1, 2018:

• IRC section 199A deduction;
• deduction for foreign real property taxes;
• deduction for taxes under IRC section 164 that was limited to $10,000; and
• miscellaneous itemized deductions disallowed under IRC section 67(g).

If you are concerned with how these changes may affect your 2018 return, request an extension of time to file. Sign up for our Subscription Service for personal income tax to receive an email announcement regarding the future guidance.

Caution: This update supersedes the 4/9/2019 Form IT-205-I update, posted above.

Note: See up-to-date information for 2018 Form IT-225-I, below, if you have any of these deductions:

• IRC section 199A deduction;
• deduction for foreign real property taxes;
• deduction for taxes under IRC section 164 that was limited to $10,000; or
• miscellaneous itemized deductions disallowed under IRC section 67(g).

On page 5, above addition modification A-201, add the following:

A-120 IRC section 199A deduction

If an estate or trust was allowed a deduction under IRC section 199A in computing federal taxable income, then enter the amount of that deduction.

On page 13, above subtraction modification S-201, add the following:

S-138 State and local tax deduction other than state and local sales taxes and income taxes

If an estate or trust claimed a deduction for taxes under IRC section 164 that was limited to $10,000 as provided in IRC section 164(b)(6)(B), or that was denied under IRC section 164(b)(6)(A), then enter the amount of state and local taxes that the estate or trust was not able to deduct for federal income tax purposes because of such limitation or denial, other than state and local sales taxes and income taxes as described in Tax Law § 615(c)(1).

Note: In determining the makeup of the $10,000 of deduction claimed by the estate or trust under IRC section 164, it shall be presumed that the $10,000 first comprises the state and local income taxes (or sales taxes, if applicable) the estate or trust accrued or paid during the taxable year.

S-139 Miscellaneous itemized deductions

If an estate or trust had miscellaneous itemized deductions, as described in and limited by IRC section 67 (excluding the deductions described in section 67(e)), that the estate or trust was not able to deduct for federal income tax purposes due solely to IRC section 67(g), then enter the amount disallowed under IRC section 67(g).

Addition modifications chart beginning on page 15 is corrected to include:

 Subtraction modifications chart beginning on page 16 is corrected to include:

Form IT-196-I, page 17, line 24b for the Unreimbursed employee business expenses worksheet should read as follows:

Line 24b – If you leased a vehicle for a term of 30 days or more, you may have to reduce your deduction for vehicle lease payments by an amount called the inclusion amount.

For tax years beginning in 2018, all vehicles are subject to a single inclusion amount threshold for passenger automobiles leased and put into service in 2018.

For tax years prior to 2018, see inclusion tables below.

See the 2018 IRS Publication 463, Travel, Gift, and Car Expenses, to determine your inclusion amount.

Effective July 1, 2019, certain conveyances of real property, or interests therein, located in New York City (NYC), must be reported on Form TP-584-NYC, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax for the Conveyance of Real Property Located in New York City, instead of Form TP-584. If you must file Form TP-584-NYC, substitute Form TP-584-NYC in place of Form TP-584 in these instructions. For more information, see Form TP-584-NYC and its instructions.

Effective July 1, 2019, certain conveyances of real property, or interests therein, located in New York City (NYC), must be reported on Form TP-584-NYC, Combined Real Estate Transfer Tax Return, Credit Line Mortgage Certificate, and Certification of Exemption from the Payment of Estimated Personal Income Tax for the Conveyance of Real Property Located in New York City, instead of Form TP-584. If you must file Form TP-584-NYC, substitute Form TP-584-NYC in place of Form TP-584 in these instructions. For more information, see Form TP-584-NYC and its instructions.

Form IT-196, lines 16, 17, and 18 should read as follows:

16        Gifts by cash or check (see instructions)

17        Other than by cash or check (see instructions)

18        Carryover from prior year (see instructions)

On pages 3, 4, and 5, replace the entire Gifts to charity section with the following: 

Gifts to charity

Line 16

• If you claimed an itemized deduction for gifts to charity by cash or check on your federal income tax return, enter the amount from federal Schedule A, line 11.
  
  
• If you did not claim an itemized deduction for gifts to charity on your federal income tax return, compute the amount to enter on line 16 of Form IT-196 as if you had, using the 2018 instructions for federal Schedule A.

Line 17

• If you claimed an itemized deduction for gifts to charity other than by cash or check on your federal income tax return, enter the amount from federal Schedule A, line 12.
  
  
• If you did not claim an itemized deduction for gifts to charity on your federal income tax return, compute the amount to enter on line 17 of Form IT-196 as if you had, using the 2018 instructions for federal Schedule A.

Line 18

• If you claimed an itemized deduction for gifts to charity on your federal income tax return and have a carryover from a prior year, enter the amount from federal Schedule A, line 13.
  
  
• If you did not claim an itemized deduction for gifts to charity on your federal income tax return, compute the amount to enter on line 18 of Form IT-196 as if you had, using the 2018 instructions for federal Schedule A.

Form IT-201-X, line 47a should read as follows:

47a        NYC resident tax on line 47 amount

Form IT-219, line 9 should read as follows:

9 Enter your taxable income from:
Full-year NYC resident individuals – Form IT-201, line 47
Part-year NYC resident individuals – Form IT-360.1, line 47
Full-year NYC resident estates or trusts – Form IT-205, line 5
Part-year NYC resident trusts – Form IT-205-A, line 10, col. (b)

Form IT-222, line 3 should read as follows:

3 Enter your taxable income from Form IT-201, line 47, or
      Form IT-205, line 5.................................................................. 

On page 5, 1^st column, line 62 instruction, 1^st sentence is changed to read:

“Line 62 – Enter the amount of life insurance company taxable income (LICTI) (including, in the case of a stock life insurance company, the phased inclusion [one-eighth] of the balance in existing policyholders surplus accounts that was required to be included in FTI), plus the NOL deduction included in LICTI as reported to the U.S. Treasury Department for the tax year.”

On page 7, 1^st column, line 64 instruction, 1^st sentence is changed to read:

“Line 64 – Enter the amount of life insurance company taxable income (LICTI) (including, in the case of a stock life insurance company, the phased inclusion [one-eighth] of the balance in existing policyholders surplus accounts that was required to be included in federal taxable income [FTI]), plus the NOL deduction included in LICTI as reported to the U.S. Treasury Department for the tax year.”

On page 7, 1st column, immediately following subtraction modification S-512, add new subtraction modification S-513 that reads:

“S-513 – Amount excluded from the term contribution to capital by IRC section 118(b)(2) (CT-3 and CT-33 filers only) – Enter the amount of contributions to your capital that was included in your federal taxable income as a result of IRC section 118(b)(2). (§§208(9)(a)(20), and 1503(b)(1)(T))”

On page 5, 2nd column, immediately following subtraction modification S-512, add new subtraction modification S-513 that reads:

“S-513 – Amount excluded from the term contribution to capital by IRC section 118(b)(2) (CT-3-A and CT-33-A filers only) - Enter the amount of contributions to your capital that was included in your federal taxable income as a result of IRC section 118(b)(2). (§§208(9)(a)(20), and 1503(b)(1)(T))”

A revised version of Form ET-706 (6/19) was posted on October 28, 2019. If you downloaded this form before that date, note the following:

On page 1, line 2, has been revised to read:

New York State estate tax (from tax table on page 6)

A revised version of Form ET-706-I (4/15) was posted on October 17, 2019. If you downloaded this form before that date, note the following:

On page 4, second column, under Line 3 - Applicable credit, the page number in line 8 of both the Worksheet and Example for worksheet was changed from 4 to 6.

On page 5, second column, under Schedule F, the first paragraph has been revised to read:

Litigation information – If the decedent was a plaintiff in any litigation at the time of his or her death, or the estate has undertaken or is considering any litigation related to the decedent’s death, and any recovery from the cause of action (litigation) will bring into the estate an asset not otherwise in the estate, such as a recovery for the decedent’s pain and suffering in a wrongful death action, mark an X in the box on page 1, and in the area provided in Schedule F, describe the litigation. Include the fair market value of the decedent’s interest in the cause of action as of the date of death.

A revised version of Form ET-706-I (4/15) was posted on October 17, 2019. If you downloaded this form before that date, note the following:

On page 4, second column, under Line 3 - Applicable credit, the page number in line 8 of both the Worksheet and Example for worksheet, was changed from 4 to 6.

On page 5, second column, under Schedule F, the first paragraph has been revised to read:

Litigation information – If the decedent was a plaintiff in any litigation at the time of his or her death, or the estate has undertaken or is considering any litigation related to the decedent’s death, and any recovery from the cause of action (litigation) will bring into the estate an asset not otherwise in the estate, such as a recovery for the decedent’s pain and suffering in a wrongful death action, mark an X in the box on page 1, and in the area provided in Schedule F, describe the litigation. Include the fair market value of the decedent’s interest in the cause of action as of the date of death.

A revised version of Form ET-706-I (4/16) was posted on October 17, 2019. If you downloaded this form before that date, note the following:

On page 4, first column, Line Instructions, was revised to read:

Federal form line references are to Form 706, August 2013, or Form 706, August 2017, based on the date of death and Form 706-NA, August 2013, unless otherwise noted.

On page 4, bottom of first column and top of second column, under Line 3 - Applicable credit, the page number in line 8 of both the Worksheet and Example for worksheet, was changed from 4 to 6.

On page 5, second column, under Schedule F, the first paragraph has been revised to read:

Litigation information – If the decedent was a plaintiff in any litigation at the time of his or her death, or the estate has undertaken or is considering any litigation related to the decedent’s death, and any recovery from the cause of action (litigation) will bring into the estate an asset not otherwise in the estate, such as a recovery for the decedent’s pain and suffering in a wrongful death action, mark an X in the box on page 1, and in the area provided in Schedule F, describe the litigation. Include the fair market value of the decedent’s interest in the cause of action as of the date of death.

A revised version of Form ET-706-I (4/17) was posted on October 17, 2019. If you downloaded this form before that date, note the following:

On page 4, first column, Line Instructions, was revised to read:

Federal form line references are to Form 706, August 2017, or Form 706, November 2018, based on the date of death and Form 706-NA, August 2013, unless otherwise noted."

On page 4, bottom of first column and top of second column, Line 3 - Applicable credit, the page number in line 8 of both the Worksheet and Example for worksheet, was changed from 4 to 6.

On page 5, second column, under Schedule F, the first paragraph has been revised to read:

Litigation information – If the decedent was a plaintiff in any litigation at the time of his or her death, or the estate has undertaken or is considering any litigation related to the decedent’s death, and any recovery from the cause of action (litigation) will bring into the estate an asset not otherwise in the estate, such as a recovery for the decedent’s pain and suffering in a wrongful death action, mark an X in the box on page 1, and in the area provided in Schedule F, describe the litigation. Include the fair market value of the decedent’s interest in the cause of action as of the date of death.

A revised version of Form ET-706-I (9/19) was posted on October 15, 2019. If you downloaded this form before that date, note the following:

On page 4, second column, under Line 3 - Applicable credit, the page number in line 8 of both the Worksheet and Example for worksheet, was changed from 4 to 6.

On page 5, second column, under Schedule F, the first paragraph has been revised to read:

Litigation information – If the decedent was a plaintiff in any litigation at the time of his or her death, or the estate has undertaken or is considering any litigation related to the decedent’s death, and any recovery from the cause of action (litigation) will bring into the estate an asset not otherwise in the estate, such as a recovery for the decedent’s pain and suffering in a wrongful death action, mark an X in the box on page 1, and in the area provided in Schedule F, describe the litigation. Include the fair market value of the decedent’s interest in the cause of action as of the date of death.

On page 11, 1^st column, Part 1, Section A, line 2 instruction, the 1^st bullet is changed to read: 

“the New York adjusted basis of the property is at least $1 million at the close of the tax year (see TSB-M-19(5)C, (6)I, New York State Adjusted Basis for Qualified New York Manufacturers); or”

On page 11, 2^nd column, Part 1, Section A, line 4 instruction, 2^nd paragraph, replace the words “federal income tax purposes” to read:

“New York State tax purposes (see TSB-M-19(5)C, (6)I)”

On page 11, 1^st column, Part 1, Section A, line 2 instruction, the 1^st bullet is changed to read:

“the New York adjusted basis of the property is at least $1 million at the close of the tax year (see TSB-M-19(5)C, (6)I, New York State Adjusted Basis for Qualified New York Manufacturers); or”

On page 11, 1^st column, Part 1, Section A, line 4 instruction, 2^nd paragraph, replace the words “federal income tax purposes” to read:

“New York State tax purposes (see TSB-M-19(5)C, (6)I)”

On page 7, 2^nd column, line J instruction, 1^st bullet, 2^nd paragraph, change the reference to “federal income tax purposes” to read:

“New York State purposes (see TSB-M-19(5)C, (6)I), New York State Adjusted Basis for Qualified New York Manufacturers)”.

On page 7, 2^nd column, 2^nd bullet under the line J instruction, the 1st bullet under the qualified New York manufacturer definition is changed to read:“the New York adjusted basis of the property is at least $1 million at the close of the tax year (see TSB-M-19(5)C, (6)I); or”

On page 1, 2nd column, definition of “A qualified New York manufacturer is changed to read:

A qualified New York manufacturer is a manufacturer that either (1) has property in New York State of the type described for the investment tax credit under Tax Law section 210-B.1(b)(i)(A)* that has an adjusted basis for New York State tax purposes of at least $1 million at the end of the tax year, or (2) has all its real and personal property in New York State.

On page 1, 3^rd paragraph under Definitions is changed to read:

A taxpayer (or in the case of a combined report, a combined group) that does not satisfy the principally engaged test (see the definition of manufacturer below) may be a qualified New York manufacturer if the taxpayer or the combined group employs at least 2500 employees during the tax year in manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing in New York State and the taxpayer or combined group has property in the state used in these activities, the adjusted basis of which for New York State tax purposes at the close of the tax year is at least $100 million.

For more information, see TSB-M-19(5)C, (6)I, New York State Adjusted Basis for Qualified New York Manufacturers. 

On page 8, 1^st column, line 116d instruction, is changed to read:

Line 116d – Adjusted basis of qualified manufacturing property

Enter the New York adjusted basis of qualified manufacturing property at the close of the tax year (see TSB-M-19(5)C, (6)I). The term qualified manufacturing property means property that:

• has a situs in New York State; and
  
  
• is principally used by the partnership in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing.

On page 19, 1^st column, line 35 instruction is changed to read:

Line 35 – Adjusted basis of qualified manufacturing property

Enter the New York adjusted basis of qualified manufacturing property at the close of the tax year (see TSB-M-19(5)C, (6)I). The term qualified manufacturing property means property which:

• has a situs in New York State; and
• is principally used by you in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing.

On page 1, 2nd column, the definition of “A qualified New York manufacturer” is changed to read:

A qualified New York manufacturer is a manufacturer that either (1) has property in New York State of the type described for the investment tax credit under Tax Law section 210-B.1(b)(i)(A)* that has an adjusted basis for New York State tax purposes of at least $1 million at the end of the tax year, or (2) has all its real and personal property in New York State.

On page 1, the 3^rd paragraph under Definitions is changed to read:

A taxpayer or in the case of a combined report, a combined group that does not satisfy the principally engaged test (see the definition of manufacturer below) may be a qualified New York manufacturer if the taxpayer or the combined group employs at least 2500 employees during the tax year in manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing in New York State and the taxpayer or combined group has property in the state used in these activities,

the adjusted basis of which for New York State tax purposes at the close of the tax year is at least $100 million.