2023 New York Laws › TAX - Tax › Article 22 - Personal Income Tax › Part 2 - Residents › 620 - Credit for Income Tax of Another State.

§ 620. Credit for income tax of another state. (a) General. A resident
shall  be  allowed  a  credit  against  the tax otherwise due under this
article for any income tax imposed on such individual  for  the  taxable
year  by  another state of the United States, a political subdivision of
such state, the District of Columbia  or  a  province  of  Canada,  upon
income both derived therefrom and subject to tax under this article. The
term "income tax imposed" in the previous sentence shall not include the
portion  of  such  tax (determined in the manner provided for in section
six hundred twenty-A) which is imposed upon the ordinary income  portion
(or  part  thereof)  of  a lump sum distribution which is subject to the
separate tax imposed by section six hundred three.
(b) Pass-through entity taxes. (1)  A  resident  shall  be  allowed  a
credit  against  the  tax otherwise due pursuant to this article for any
pass-through  entity  tax  substantially  similar  to  the  tax  imposed
pursuant  to article twenty-four-A of this chapter imposed on the income
of a partnership or S corporation of which the resident  is  a  partner,
member  or  shareholder  for  the  taxable  year by another state of the
United States, a political subdivision of such state, or the District of
Columbia upon income both derived therefrom and  subject  to  tax  under
this article.
(2)  Such  credit shall be equal to the taxpayer's direct share of the
pass-through entity tax paid by the electing partnership or  electing  S
corporation  to  such  other  state, political subdivision of such other
state or the District of Columbia.
(3) However, such credit will be allowed on tax paid only if:
(A) the state of the United  States,  political  subdivision  of  such
state,  or  the  District  of Columbia imposing such tax also imposes an
income tax substantially similar to the tax imposed under this  article;
and
(B)  in the case of taxes paid by an S corporation, such S corporation
was treated as a New York S corporation.
(c) Limitations. (1) The credit under this section  shall  not  exceed
the percentage of the tax otherwise due under this article determined by
dividing  the  portion  of  the  taxpayer's  New  York income subject to
taxation  by  such  other  jurisdiction  by  the  total  amount  of  the
taxpayer's New York income.
(2)  The  credit under this section shall not reduce the tax otherwise
due under this article to an amount less than would have been due if the
income subject to taxation by such other jurisdiction were excluded from
the taxpayer's New York income.
(3) In the case of a taxpayer who elects  to  claim  the  foreign  tax
credit  for  federal  income tax purposes, the credit under this section
for income tax imposed by a province of Canada shall be allowed for that
portion of the provincial tax not claimed for federal purposes  for  the
taxable  year  or  a  preceding  taxable  year, provided however, to the
extent the  provincial  tax  is  claimed  for  federal  purposes  for  a
succeeding  taxable  year,  the  credit under this section must be added
back in such succeeding taxable year. The provincial tax shall be deemed
to be claimed last for federal income tax purposes and for  purposes  of
this subsection.
(d) Definition. For purposes of this section New York income means:
(1) the New York adjusted gross income of an individual, or
(2)  the  amount of the income of an estate or trust, determined as if
the estate or trust were an individual computing his New  York  adjusted
gross income under section six hundred twelve.