Tax Law, § 651(b)
(a)
Separate Federal income tax
returns.
If a husband and wife file separate Federal income tax
returns, they must also file separate New York State personal income tax
returns on separate forms. For this purpose, they must use form IT-201 or form
IT-203, whichever is applicable, and their tax liabilities shall be
separate.
(b)
Joint
Federal income tax returns.
(1)
General.
The Federal rules for determining whether a husband and
wife qualify for filing a joint Federal income tax return also apply for New
York State personal income tax purposes. However, where a change of residence
occurs during the taxable year, see Part 154 of this Article. If a husband and
wife (other than a husband and wife described in subdivision [c] of this
section) file a joint Federal income tax return, or if neither spouse files a
Federal income tax return, they may either:
(i) file a joint New York State personal
income tax return (on form IT-200, IT-201 or IT-203), even though one spouse
has no income, in which event their income tax liabilities will be joint and
several and each will be liable for the entire income tax on such joint return,
except as provided in subdivision (e) of this section and subsection (e) of
section 685 of the Tax Law; or
(ii) elect to file separate New York State
personal income tax returns, provided they do so on a single form IT-201 or
IT-203 and comply with the requirements of the Tax Commission relative to the
determination of their separate income taxes on such single form. In this
event, their income tax liabilities will be separate, except as provided in
subdivision (d) of this section.
(2) For purposes of tax computation only, the
Internal Revenue Code permits the Federal income tax to be determined on a
joint Federal income tax return as though the taxable income reported on such
return were split equally between husband and wife and the income tax computed
separately on each half. Since article 22 of the New York State Tax Law does
not include a similar provision, a husband and wife are not permitted to
determine their New York State personal income tax on either joint or separate
New York State personal income tax returns on the basis of splitting their
combined income.
(c)
Husband and wife with different resident status.
(1) If either the husband or wife is a
resident and the other is a nonresident of New York State, they must file
separate New York State personal income tax returns on separate form IT-201 or
IT-203, regardless of whether they file a joint or separate Federal income tax
return, unless both elect to file a joint New York State resident personal
income tax return in which their joint New York taxable income is determined as
if both were residents. They may elect to do this only if they meet the
following requirements:
(i) they filed a joint
Federal income tax return for the same taxable year; and
(ii) each spouse maintained his or her status
as a resident or nonresident during the entire taxable year.
If they file such a joint New York State resident
personal income tax return, their income tax liabilities will be joint and
several, except as provided in subdivision (e) of this section and in
subsection (e) of section 685 of the Tax Law. If they file separate
New York State personal income tax returns, their income tax liabilities will
be separate.
(2)
If, for Federal income tax purposes, a joint Federal income tax return cannot
be made because either the husband or wife, at any time during the taxable
year, was a nonresident alien, it follows that in accordance with subparagraph
(1)(i) of this subdivision, a joint New York State personal income tax return
cannot be filed in such a case.
(d)
Separate New York State personal
income tax returns filed on a single form; application of payments;
refunds.
If a husband and wife file separate New York State
personal income tax returns on a single form pursuant to subparagraph
(b)(1)(ii) of this section, any excess payment by either spouse (including
withheld and estimated income taxes) may be applied against any balance of
income tax due from the other spouse, and refund of any excess not so applied
may be made payable to both spouses or, if either is deceased, to the executor
or administrator for the estate of the decedent or to the surviving spouse, as
the case may be (see subsection [d] of section 686 of the
Tax Law). However, the provisions of this subdivision will not apply if such
return of either spouse includes a demand that any overpayment made by him or
her be applied only on account of his or her separate
liability.
(e)
Relief
of spouse from New York State personal income tax liability on joint New York
State personal income tax returns.
(1)
If a joint New York State personal income tax return has been filed pursuant to
the provisions of subdivision (b) or (c) of this section for a taxable year,
and on such return there is a substantial understatement of New York State
personal income tax attributable to grossly erroneous items of one spouse, the
other spouse will be relieved of liability for New York State personal income
tax (including interest, penalties and other amounts) for such taxable year to
the extent that such liability is attributable to such substantial
understatement of New York State personal income tax attributable to grossly
erroneous items if:
(i) the other spouse
establishes that, in signing such return, he or she did not know, and had no
reason to know, that there was such substantial understatement; and
(ii) taking into account all the facts and
circumstances, including whether or not the other spouse benefited directly or
indirectly from the grossly erroneous items, it is inequitable to hold the
other spouse liable for the deficiency in New York State personal income tax
for such taxable year attributable to such substantial
understatement.
(2) A
spouse may make application for the relief provided for in this subdivision by
filing with the Tax Commission a sworn statement stating all the facts and
circumstances set forth in subparagraphs (1)(i)-(ii) of this subdivision in
support of such application. The Tax Commission may request additional sworn
statements, testimony under oath or any other proof that it requires to
determine whether the applicant should be relieved of liability for New York
State personal income tax as provided for in this subdivision.
(3) For the purposes of this subdivision:
(i) the term grossly erroneous
items means, with respect to any spouse, any item of New York adjusted
gross income attributable to such spouse which is omitted from New York
adjusted gross income and any claim of a New York deduction, exemption, credit
or basis by such spouse in an amount for which there is no basis in fact or
law;
(ii) the term
substantial understatement means the excess of the amount of
the New York State personal income tax required to be shown on the New York
State personal income tax return for the taxable year, over the amount of New
York State personal income tax imposed which is shown on the New York State
personal income tax return, reduced by any rebate (within the meaning of
section
681[g] of the Tax Law),
which exceeds $100; and
(iii) the
determination of the spouse to whom items of New York adjusted gross income
(other than New York adjusted gross income from property) are attributable will
be made without regard to community property laws.
(4) New York State personal income tax
liability attributable to substantial understatement must exceed specified
percentage of innocent spouse New York adjusted gross income.
(i) Except as provided in subparagraph (iii)
of this paragraph, the provisions of this subdivision shall apply:
(a) if the innocent spouse's New York
adjusted gross income for the most recent taxable year ending before the date
the deficiency notice is mailed is $20,000 or less, only if the liability for
New York State personal income tax described in paragraph (1) of this
subdivision (including interest, penalties and other amounts) attributable to
the substantial understatement is greater than 10 percent of such New York
adjusted gross income;
(b) if the
innocent spouse's New York adjusted gross income for the most recent taxable
year ending before the date the deficiency notice is mailed is more than
$20,000, only if the liability for New York State personal income tax described
in paragraph (1) of this subdivision (including interest, penalties and other
amounts) attributable to the substantial understatement is greater than 25
percent of such New York adjusted gross income.
(ii) For purposes of this paragraph, if the
innocent spouse is married to another spouse at the close of such year, the
spouse's New York adjusted gross income must include the New York adjusted
gross income of the new spouse, whether or not they file a joint New York State
personal income tax return.
(iii)
Exception. The requirement contained in this paragraph that New York State
personal income tax liability (including interest, penalties and other amounts)
attributable to substantial understatement must exceed either 10 percent of the
innocent spouse's New York State adjusted gross income if such spouse's
adjusted gross income for the most recent taxable year ending before the
deficiency notice is mailed is $20,000 or less; or 25 percent of the innocent
spouse's New York State adjusted gross income if such spouse's adjusted gross
income for the most recent taxable year ending before the deficiency notice is
mailed is more than $20,000, shall not apply to a substantial understatement
attributable to an omission from New York adjusted gross income. Therefore,
these relief of spouse provisions will be available without the need to meet
the applicable percentage limitation specified in this paragraph where there is
a substantial understatement attributable to an omission from New York adjusted
gross income.
(5) If a
joint New York State personal income tax return has been made by a husband and
wife for a taxable year and on such return there is a substantial
understatement of tax attributable to grossly erroneous items of one spouse,
and if, pursuant to the provisions of this subdivision, the other spouse is
relieved of liability for New York State personal income tax (including
interest, penalties and other amounts) for such taxable year to the extent that
such liability is attributable to such substantial understatement, and if a
joint New York City personal income tax return or a joint City of Yonkers
income tax surcharge return is made by the spouse for the same taxable year,
then such other spouse shall be relieved of liability for the New York City
personal income tax or the City of Yonkers income tax surcharge, whichever is
applicable, for the taxable year to the extent that such liability is
attributable to such substantial understatement.
(f) Notwithstanding any provision of this
Subchapter to the contrary, if a husband and wife file a joint New York State
personal income tax return, any excess payment and interest thereon by either
spouse may be applied against any past-due support or against any amount of a
default in repayment of a guaranteed student, State University or city
university loan attributable to the other spouse, of which the Department of
Taxation and Finance has been notified pursuant to the provisions of section
171-c,
171-d or
171-e of the Tax Law. In calculating the amount of excess
payment and interest thereon which may be applied against past-due support or
against a default in repayment of a guaranteed student, State University or
city university loan of a spouse, the excess payment will first be applied
against any liability of such spouse in respect of any tax imposed by or
pursuant to the authority of the Tax Law or administered by the Department of
Taxation and Finance and against estimated tax for the succeeding taxable year
if the taxpayer claims such overpayment or a portion thereof as a credit
against estimated tax for such succeeding taxable year. However, the provisions
of this subdivision will not apply to the excess payment of a spouse if such
spouse affixes to the joint New York State personal income tax return a written
demand providing that any overpayment made by him or her be applied only on
account of his or her separate liability and furnishes such other information
as the Tax Department may deem necessary and prescribe by forms and
instructions. (See form IT-280,
Nonobligated Spouse
Allocation.) A spouse may not file an amended New York State personal
income tax return to make such a demand. If a spouse makes a demand that any
overpayment made by him or her be applied only on account of his or her
separate liability, then:
(1) amounts
attributable to withholding from wages of such spouse will be applied only
against the separate liability of such spouse;
(2) amounts attributable to separate payments
of estimated income tax by such spouse will be applied only against the
separate New York State personal income tax liability of such spouse;
and
(3) amounts attributable to
joint payments of estimated income tax and amounts attributable to any other
payment will be applied against the separate New York State personal income tax
liability of each spouse in such proportion as is agreed upon by both spouses;
provided, however, that in the absence of any such agreement, such amounts will
be applied against the separate New York State personal income tax liability of
each spouse in the same proportion which the separate New York State personal
income tax liability of each spouse bears to the total New York State personal
income tax liability of both spouses. In the absence of an agreement between
spouses, the amounts of joint estimated income tax payments and other payments
will be apportioned based upon the following formula:
separate New York State personal income tax
liability of spouse/total New York State personal
income tax liability of both spouses
× amount of estimated income
tax payments
For purposes of this subdivision, the separate New York
State personal income tax liability of each spouse will be determined by the
following formula:
New York adjusted gross income of each
spouse/combined New York adjusted gross income of both
spouses
× total New York State personal income tax liability of
both spouses
Example 1:
Assume that for the calendar year 1987, H had New York
State personal income tax withheld from his wages in the amount of $600. W, his
spouse, received no income during the year. Additionally, H and W made joint
payments of estimated income tax totaling $900. H and W subsequently filed a
joint New York State personal income tax return showing a New York State
personal income tax liability of $1,300. W had defaulted in repayment of a
guaranteed student loan in the amount of $300 and the Department of Taxation
and Finance was so notified in accordance with the provisions of section 171-d of the Tax Law. H did not affix to
their joint New York State personal income tax return a written demand
providing that any overpayment made by him be applied only on account of his
separate New York State personal income tax liability. The overpayment of H and
W in the amount of $200 ($1,500 less $1,300) will be applied against W's
liability for her defaulted student loan. Since the amount owed on the
defaulted student loan exceeded the amount of the overpayment, neither H nor W
will receive any refund of New York State personal income tax.
Example 2:
Assume that for the calendar year 1987, H had New York
adjusted gross income of $20,000 and had New York State personal income tax
withheld from his wages in the amount of $1,600. W, his spouse, had New York
adjusted gross income of $5,000 and had New York State personal income tax
withheld from her wages in the amount of $500. Additionally, H and W made joint
payments of estimated tax totaling $200. H and W filed a joint New York State
personal income tax return showing a combined New York adjusted gross income of
$25,000 and a total New York State income tax liability of $836. H had
defaulted in repayment of a guaranteed student loan in the amount of $1,200 and
the Department of Taxation and Finance was so notified in accordance with the
provision of section 171-d of the Tax Law. W affixed to their
joint New York State personal income tax return a written demand providing that
any overpayment made by her be applied only on account of her separate New York
State income tax liability. The overpayments made by each spouse will be
treated as follows:
| Joint return |
H |
W |
| NY adjusted gross income |
$25,000 |
$20,000 |
$5,000 |
| Total NYS income tax liability |
$ 836 |
| Separate NYS income tax liability |
| $20,000
× $836 = |
| $20,000 + $5,000 |
$ 669 |
| $ 5,000
× $836 = |
| $20,000 + $5,000 |
$ 167 |
| Share of joint estimated income tax payment |
200 |
| $20,000
× $200 = |
| $20,000 + $5,000 |
$ 160 |
| $ 5,000
× $200 = |
| $20,000 + $5,000 |
40 |
| Amount of NYS personal income tax withheld |
2,100 |
1,600 |
500 |
| Overpayment |
$ 1,464 |
$ 1,091 |
$ 373 |
| Amount applied against guaranteed student loan |
1,091 |
1,091 |
0 |
| Amount refunded |
$ 373 |
$ 0 |
$ 373 |
(g) Any reference in subdivision (f) of this
section to "New York State personal income tax" shall be deemed, for purposes
of such subdivision, to include reference to the New York City personal income
tax on residents, the New York City earnings tax on nonresidents, the City of
Yonkers income tax surcharge on residents and the City of Yonkers earnings tax
on nonresidents.
