2023 New York Laws › TAX - Tax › Article 30 - City Personal Income Tax › 1301-B - City Separate Tax on the Ordinary Income Portion of Lump Sum Distributions.

§ 1301-B. City separate tax on the ordinary income portion of lump sum
distributions.  (a) Imposition of separate tax. The city separate tax on
the ordinary income portion of a lump sum distribution imposed  pursuant
to  the authority of this article shall be imposed for each taxable year
on the ordinary income portion of  a  lump  sum  distribution  of  every
resident  individual,  estate  or  trust  of such city which has made an
election of lump sum treatment under  subsection  (e)  of  section  four
hundred two of the internal revenue code.
(b)  Amount of separate tax. The amount of tax imposed pursuant to the
authority of subsection (a) for any taxable  year  shall  be  an  amount
equal to five times the tax which would be imposed at the rate set forth
in  paragraph three of subsection (a) or (b) of section thirteen hundred
four of this article, whichever may be applicable, if the recipient were
an individual referred to in such subsection and the city taxable income
referred to were an amount equal to one-fifth of the excess of:
(1) the total taxable amount of the  lump  sum  distribution  for  the
taxable year, over
(2) the minimum distribution allowance.
(c)  Minimum distribution allowance. For purposes of this section, the
minimum  distribution  allowance  shall  be  that  which  is  calculated
according  to  subparagraph  (C)  of  paragraph one of subsection (e) of
section four hundred two of the internal revenue code.
(d) Liability for tax. The recipient of a lump sum distribution  shall
be liable for the tax imposed pursuant to the authority of this section.
(e) Multiple distributions and distributions of annuity contracts. For
purposes of this section the rules concerning multiple distributions and
distributions  of  annuity  contracts  as  specified by paragraph two of
subsection (e) of section four hundred two of the internal revenue  code
shall  be  applicable,  except  that  references  to the "tax imposed by
paragraph (1) (A)" shall be deemed to be references to the city separate
tax on the ordinary income portion of a lump sum distribution authorized
by this article,  and  except  that  only  lump  sum  distributions  (or
portions  thereof) and distributions of annuity contracts subject to the
city  separate  tax  on  the  ordinary  income  portion  of   lump   sum
distributions  authorized  by this article shall be included, and except
that references to the secretary shall be deemed to be references to the
tax commission.
(f) Definitions and special rules. For purposes of this  section,  the
following  provisions  shall  apply,  to  the  extent  applicable to the
taxpayer's federal tax on lump sum distributions:  (1)  the  definitions
and  special  rules  as specified in paragraph four of subsection (e) of
section four hundred two of the  internal  revenue  code;  and  (2)  the
special  rules  relating to (A) individuals who have attained the age of
fifty before January first, nineteen hundred eighty-six and (B)  capital
gains,  as  specified  in  paragraphs  three,  four,  five  and  six  of
subsection (h) of section eleven hundred twenty-two of  the  tax  reform
act  of nineteen hundred eighty-six as enacted by public law 99-514, but
(i) in the event that paragraph three of such subsection is  applicable,
clause (ii) of subparagraph (B) of such paragraph shall be applied using
a  rate of one and seventy-two hundredths percent, and (ii) in the event
that paragraph five of such subsection is applicable, the  words  "five"
and "one-fifth" in subsection (b) of this section shall be read as "ten"
and  "one-tenth", respectively, and subsection (b) of this section shall
be applied by using the rate of  tax  specified  in  subsection  (a)  of
section  thirteen  hundred  four  as  such  subsection was in effect for
taxable years beginning in nineteen hundred eighty-six.
(g) Credits. The credits against tax authorized  under  this  article,
except  for  the credit under subsection (a) of section thirteen hundred

ten, shall not be allowed against the city separate tax on the  ordinary
income  portion  of  lump  sum  distributions  imposed  pursuant  to the
authority of this article.