N.Y. Tax Law § 1088: Interest on overpayment

§ 1088. Interest on overpayment.--(a) General.--Notwithstanding the

provisions of section sixteen of the state finance law, interest shall

be allowed and paid as follows at the overpayment rate set by the

commissioner of taxation and finance pursuant to section one thousand

ninety-six, or if no rate is set, at the rate of six percent per annum

upon any overpayment in respect of the tax imposed by article nine or

nine-a:

(1) from the date of the overpayment to the due date of an amount

against which a credit is taken;

(2) from the date of the overpayment to a date (to be determined by

the commissioner) preceding the date of a refund check by not more than

thirty days, whether or not such refund check is accepted by the

taxpayer after tender of such check to the taxpayer. The acceptance of

such check shall be without prejudice to any right of the taxpayer to

claim any additional overpayment and interest thereon.

(3) Late and amended returns and claims for credit or refund.

Notwithstanding paragraph one or two of this subsection, in the case of

an overpayment claimed on a return of tax which is filed after the last

date prescribed for filing such return (determined with regard to

extensions), or claimed on an amended return of tax or claimed on a

claim for credit or refund, no interest shall be allowed or paid for any

day before the date on which such return or claim is filed.

(4) Interest on certain refunds. To the extent provided for in

regulations promulgated by the commissioner of taxation and finance, if

an item of income, gain, loss, deduction or credit is changed from the

taxable year or period in which it is reported to the taxable year or

period in which it belongs and the change results in an underpayment in

a taxable year or period and an overpayment in some other taxable year

or period, the provisions of paragraph three of this subsection with

respect to an overpayment shall not be applicable to the extent that the

limitation in such paragraph on the right to interest would result in a

taxpayer not being allowed interest for a length of time with respect to

an overpayment while being required to pay interest on an equivalent

amount of the related underpayment. However, this paragraph shall not be

construed as limiting or mitigating the effect of any statute of

limitations or any other provision of law relating to the authority of

such commissioner to issue a notice of deficiency or to allow a credit

or refund on an overpayment.

(5) Amounts of less than five dollars. No interest shall be allowed or

paid if the amount thereof is less than five dollars.

(b) Advance payment of tax and estimated tax.--The provisions of

subsections (h) and (i) of section one thousand eighty-seven applicable

in determining the date of payment of tax for purposes of determining

the period of limitations on credit or refund, shall be applicable in

determining the date of payment for purposes of this section.

(c) Tax refund within three months of claim for overpayment. (1) If

any overpayment of tax imposed by article nine or nine-a is credited or

refunded within three months after the last date prescribed (or

permitted by extension of time) for filing the return of such tax on

which such overpayment was claimed or within three months after such

return was filed, whichever is later, or within three months after an

amended return was filed claiming such overpayment or within three

months after a claim for credit or refund was filed on which such

overpayment was claimed, no interest shall be allowed under this section

on any such overpayment. For purposes of this subsection, any amended

return or claim for credit or refund filed before the last day

prescribed (or permitted by extension of time) for the filing of the

return of tax for such year or period shall be considered as filed on

such last day.

(2) In the case of an overpayment of tax credited due to absence of

application by the taxpayer for refund under subsection (a) of section

one thousand eighty-six, where the commissioner notifies the taxpayer

that such overpayment has been so credited within three months after the

last date prescribed (or permitted by extension of time) for filing the

return of such tax on which such overpayment was claimed or within three

months after such return was filed, whichever is later, and where the

taxpayer subsequent to such notice makes a claim for refund of all or

part of such overpayment, no interest shall be allowed under this

section prior to the date of such claim for refund.

(d) Refund of tax caused by carryback.--For purposes of this section,

if any overpayment of tax imposed by article nine-a results from a

carryback of a net operating loss or a net capital loss, such

overpayment shall be deemed not to have been made prior to the filing

date for the taxable year in which such net operating loss or net

capital loss arises. In the case of a taxpayer which has made an

election under subchapter s of chapter one of the internal revenue code,

where an overpayment of tax results from a carryback of a net operating

loss arising in a taxable year ending on or after December thirty-first,

nineteen hundred seventy-six, or from a carryback of a net capital loss

arising in a taxable year ending on or after December thirty-first,

nineteen hundred eighty-one, unless a claim for refund based on such

overpayment has been filed within a period ending twelve months and one

hundred eighty days subsequent to the last day of the taxable year in

which the net operating loss or net capital loss arises, interest on any

resulting refund or credit shall cease to accrue upon the conclusion of

such period. Such filing date shall be determined without regard to

extensions of time to file. For purposes of subsection (c) of this

section any overpayment described herein shall be treated as an

overpayment for the loss year and such subsection shall be applied with

respect to such overpayment by treating the return for the loss year as

not filed before claim for such overpayment is filed. The term "loss

year" means the taxable year in which such loss arises.

(e) No interest until return in processible form.--

(1) For purposes of subsections (a) and (c) of this section, a return

shall not be treated as filed until it is filed in processible form.

(2) For purposes of paragraph one of this subsection, a return is in a

processible form if--

(A) such return is filed on a permitted form, and

(B) such return contains--

(i) the taxpayer's name, address, and indentifying number and the

required signatures, and

(ii) sufficient required information (whether on the return or on

required attachments) to permit the mathematical verification of tax

liability shown on the return.

(f) Overpayment credited against past-due legally enforceable

debts.--If interest is payable pursuant to this section on that portion

of an overpayment which is certified by the commissioner of taxation and

finance to the comptroller as the amount to be credited against a

past-due legally enforceable debt pursuant to the provisions of section

one hundred seventy-one-f of this chapter, or a city of New York tax

warrant judgment debt pursuant to the provisions of section one hundred

seventy-one-l of this chapter, such portion of such an overpayment shall

cease to bear interest on the date of such certification.

(g) Cross-reference.--For provision with respect to interest after

failure to file a report or amended return under subdivision three of

section two hundred eleven or paragraph one of subdivision (e) of

section fifteen hundred fifteen, see subsection (c) of section one

thousand eighty-seven.

(h) Notwithstanding any other provision in this section, for taxable

years beginning on or after January first, two thousand eight and before

January first, two thousand nine, interest will be allowed on an

overpayment on any return or report on which one or more empire zone tax

credits are claimed, only from the one hundred eightieth day after the

taxpayer files with the department an empire zone retention certificate

issued pursuant to subdivision (w) of section nine hundred fifty-nine of

the general municipal law to the empire zone enterprise which is the

basis for the tax credit or credits claimed on the return or report.