N.Y. Comp. Codes R. & Regs. Tit. 20 § 151.17 - Group (formerly combined return) New York State nonresident personal income tax return for nonresident partners

(a) General. A partnership, including a limited liability partnership or a limited liability company that is treated as a partnership for Federal tax purposes, required to file a New York State partnership return pursuant to section 658(c) of the Tax Law (see section 151.4 of this Part) may be granted approval by the Department of Taxation and Finance to file a New York State nonresident personal income tax group return for nonresident partners (hereinafter referred to in this section as group return) on behalf of its qualified partners or limited liability company members (hereinafter referred to in this section as partners) who elect to have the partnership or limited liability company (hereinafter referred to in this section as partnership) file on their behalf. The provisions of section 151.1 of this Part, Parts 106 and 140 of this Title and section 185.3(j) of this Title will not apply if an election is made and permission is granted pursuant to this section. All participating partners must have the same accounting period.

(b)

(1) Request for permission. A partnership electing to file a group return on behalf of its participating partners must request permission to do so by submitting an application on a form prescribed by the department for such purpose (or replica, reproduction, computer-prepared form or other such form containing the prescribed information). The application must be accompanied by an individual power of attorney (or other evidence of authority acceptable to the Department of Taxation and Finance) for each participating partner authorizing a common partner to represent such participating partner in making, executing, or filing the return. The request must be sent to the Assistant Director, Registration and Licensing Services Bureau, New York State Department of Taxation and Finance, Building 8, Room 408, W.A. Harriman Campus, Albany, NY 12227. Request for permission to file a group return must be made by the 30th day following the close of the taxable year for which the election is requested. Permission to file a group return will be restricted to partnerships which have more than 10 electing qualified nonresident partners in each taxable year. Upon receipt of a properly completed application, the department will determine whether or not the initial approval will be granted and will notify the partnership accordingly. The department's approval to file a group return is tentative pending receipt of the final group return, and subject to revision or revocation on audit. A return filed on a group basis does not constitute a request for permission to file a group return. A request to file a group return must include the following information:

(i) the exact name and address of the partnership as shown on the New York State partnership return; and

(ii) the first taxable year for which the group return will be filed.

(2) If subsequent to filing an application, a qualified partner not included in the application elects to participate in the filing of a group return, such partner must submit an individual power of attorney or other evidence acceptable to the Department of Taxation and Finance authorizing the established common partner to represent such partner in making, executing, or filing the return. The power of attorney or other acceptable evidence of authority required for those partners electing to participate after the filing of the application must be attached to the first group return filed on behalf of such partner.

(c) Definition of a qualified nonresident partner. The term qualified nonresident partner means a partner who meets all of the following conditions:

(1) the partner must be a nonresident of New York State for the entire taxable year;

(2) the partner must have maintained no permanent place of abode in New York State at any time during the taxable year;

(3) the partner or the partner's spouse must:

(i) have no New York source income, as determined under section 132.2 of this Subchapter, other than the partner's distributive share of partnership income, as determined under Part 137 of this Title, allocated to New York State. However, nonresident partners with New York source income from sources other than their distributive share of partnership income may be eligible to file on a group return under the provisions of section 151.21 of this Part;

(ii) not be subject to the minimum income tax (see section 602 of the Tax Law); or

(iii) not be subject to the separate tax on the ordinary income portion of a lump sum distribution (see section 603 of the Tax Law); and

(4) the partner must waive the right to claim:

(i) the New York standard or itemized deduction;

(ii) dependent exemptions;

(iii) any credits against New York State personal income tax; and

(iv) a New York State deduction resulting from a capital loss carryover or a net operating loss carryback or carryover, as determined pursuant to section 132.7 of this Title (i.e., either determined before filing, at the time of filing, or after filing).

(d) Form of return on group basis. The group return is required to be filed on the form prescribed by the Department of Taxation and Finance and in the manner prescribed by the department. The group return must contain the special identifying number which will be assigned to each partnership upon approval by the department. This special identifying number will remain in effect each year unless reassigned or revoked. The group return must be signed by a common partner having legal authority to act as agent for all participating partners. In such case, the partner signing the return and each participating partner are individually responsible for his or her part in making and signing the return. Each such common partner or participating partner, as the case may be, will incur liability for those penalties provided by the Tax Law that may be imposed with respect to such individual's acts in making and signing erroneous, false, or fraudulent New York State income tax returns. The group return must be filed with New York State Income Tax, W.A. Harriman Campus, Albany, NY 12227.

(e) The filing of a group return will be considered as a group of separate returns which will meet the individual filing requirements of this Part. The Department of Taxation and Finance retains the right to require the filing of an individual New York State nonresident personal income tax return by any of the individual partners.

(f) A partnership filing a group return must include a detailed schedule indicating the name of the partnership, the special identifying number, and the taxable year as shown on the group return. Also, for each participating partner, the partnership must provide the following information:

(1) the partner's name and address (in alphabetical order by last name or other order acceptable to the Department of Taxation and Finance);

(2) the partner's social security number;

(3) the partner's distributive share of partnership income, as determined under Part 137 of this Title, allocable to New York State;

(4) the partner's New York State personal income tax as determined in accordance with subdivision (g) of this section;

(5) the New York State estimated income tax paid by such partner on an individual basis or the New York State estimated income tax paid on behalf of such partner on a group basis pursuant to section 185.3(k) of this Title, as the case may be;

(6) the balance due or overpayment (any overpayment will not be refunded, but applied to the respective partner's estimated income tax for the following year); and

(7) any other information the Department of Taxation and Finance may require.

(g) New York State personal income tax. For purposes of this section, a participating partner's New York State personal income tax is determined by multiplying such partner's distributive share of partnership income (as determined under Part 137 of this Title) allocable to New York State by the highest effective rate of New York State personal income tax for the applicable taxable year.

(h) The partnership must also attach to its New York State partnership return a copy of the listings of the nonresident partners included in the group return, containing the names and social security numbers of the partners who will be included in the group return for the calendar year within which the taxable year of the partnership ends.

(i) The approval to file a group return for a taxable year will not be revoked subsequent to the filing date of that taxable year simply because the partnership failed to maintain the minimum number of its electing qualified nonresident partners. For example, if a partnership filed a timely group return on behalf of two more than the minimum number of electing qualified nonresident partners for a taxable year and, subsequently, three of the partners file superseding or correcting New York State nonresident personal income tax returns on or before April 15, of the following year, approval to file on a group basis for that taxable year will not be revoked solely for failure to maintain the minimum number of electing qualified nonresident partners. However, unless the partnership has the minimum number of electing qualified nonresident partners for group filing purposes in subsequent taxable years, such approval will be revoked for such subsequent years.

In addition, where a group return is not filed with respect to a taxable year, the approval to file a group return will be revoked for subsequent taxable years unless the partnership requests permission from the department for reinstatement.

(j) Where a partnership elected to file group required installments, pursuant to section 185.3(k)(1) of this Title, and later determines than an individual electing partner will not participate in the filing of a group return or where such individual electing partner fails to qualify, pursuant to subdivision (c) of this section, the partnership should notify the Department of Taxation and Finance, in writing, by the 15th day of the second month following the close of the taxable year in which the partner elects not to participate or fails to qualify, as the case may be. This will allow the department sufficient time to transfer required installments of estimated tax paid on behalf of such partner on a group basis to an individual account. An electing qualified nonresident partner may not change such partner's election to file on a group basis to an individual basis after the 15th day of the fourth month following the close of the taxable year with respect to which the election is effective. Conversely, a partner may not elect to file on a group basis after the 15th day of the fourth month following the close of the taxable year for which the election is requested (see section 161.3 of this Title).

(k) A partnership that has been granted approval by the Department of Taxation and Finance to file a group return on behalf of its nonresident partners must notify the department, in writing, when such partnership decides that it will not be filing a group return for a taxable year. Such a decision will revoke approval by the department for such partnership to file a group return in subsequent taxable years unless the partnership requests permission from the department for reinstatement.

Notes

N.Y. Comp. Codes R. & Regs. Tit. 20 § 151.17