New York Codes, Rules and Regulations › Title 20 - DEPARTMENT OF TAXATION AND FINANCE › Chapter II - Income Taxes and Estate Taxes › Subchapter A - New York State Personal Income Tax Under Article 22 Of The Tax Law › Article 3 - Nonresidents › Part 140 - Credit To Nonresident Beneficiary Of Trust Receiving Accumulation Distribution › Section 140.1 - Credit to nonresident beneficiary of trust receiving accumulation distribution

Current through Register Vol. 46, No. 28, July 10, 2024
Tax Law, § 640
(a)
General.
A nonresident beneficiary of a trust, whose New York adjusted gross income includes all or part of an
accumulation distribution,
as defined in section  665 of the Internal Revenue Code, is entitled to a credit determined under this Part against the New York State personal income tax otherwise due from him for the taxable year. The amount of the credit is the portion of the excess tax, as defined in subdivision (b) of this section, paid by the trust for each prior taxable year affected by the accumulation distribution, which is attributable to the amount included in the beneficiary's New York adjusted gross income for the taxable year with respect to the accumulation distribution and any modifications (net change) required to be made by section 139.3  of this Article; see subdivision (c) of this section. See section 140.2  of this Part for limitations on the amount of accumulation distribution credit which may be claimed under this Part.
(b)
Excess tax.
For purposes of this Part, the term
excess tax
means any amount of tax paid by the trust for a prior taxable year which would not have been payable if the trust (1) had made a distribution to beneficiaries in the amount deemed to have been distributed during such prior taxable year under section  666 of the Internal Revenue Code, (2) had allocated to the beneficiary the beneficiary's share of the redetermined net change (see section 139.3  of this Article) by reason of the accumulation distribution, and (3) had eliminated from the recomputed New York taxable income of the trust that portion of the amount of any of the New York modifications relating to amounts allocated to principal which are no longer includible in the New York taxable income of such trust by reason of the accumulation distribution.
(c)
New York modifications (net change).
For purposes of this Part, the amounts of modifications determined under section 139.3  of this Article and allocated among the nonresident trust and its beneficiaries as required by section 139.4  of this Article must be reallocated for any year affected by an accumulation distribution to take into account the amounts of Federal distributable net income deemed to have been distributed in said year by reason of the accumulation distribution.
(d)
Other provision.
No credit under this Part is allowed with respect to any amount for which a modification is allowable under section 112.3(e)(3)  of this Title. Credit under this Part is allowable only to the extent that the accumulation distribution is included in the nonresident beneficiary's New York adjusted gross income.
(e)
Method of claiming credit.
(1) A nonresident beneficiary of a trust who claims credit under this Part must file with his New York State personal income tax return a statement showing the name of the trust from which the accumulation distribution was received, the name and address of the fiduciary, the amount of the accumulation distribution and related modifications included in his New York adjusted gross income, and the amount of credit claimed.
(2) The fiduciary of a trust which makes the accumulation distribution within the meaning of this Part must file with the New York State fiduciary return, for the taxable year of the trust in which such distribution is made, all of the information required by subparagraphs (i) through (iv) of paragraph (e)(2) of section 121.1  of this Title, and a further statement giving complete details of the allocation to New York State sources of the shares of nonresident beneficiaries in the accumulation distribution and related modifications and the excess tax of the trust.