N.Y. Tax Law § 171-d: Certain overpayments credited against defaulted governmental education loans

§ 171-d. Certain overpayments credited against defaulted governmental

education loans. (1) The commissioner, on behalf of the tax commission,

shall enter into a written agreement with the president of the New York

state higher education services corporation, on behalf of such

corporation, which shall set forth the procedures for crediting any

overpayment by an individual, estate or trust of income tax imposed by

article twenty-two of this chapter, city personal income tax on

residents imposed pursuant to the authority of article thirty of this

chapter, city income tax surcharge on residents imposed pursuant to the

authority of article thirty-A of this chapter, city earnings tax on

nonresidents imposed pursuant to the authority of former article two-E

of the general city law and city earnings tax on nonresidents imposed

pursuant to the authority of article thirty-B of this chapter and the

interest on such overpayments against the amount of any default in

repayment of any governmental education loan owed by such individual,

estate or trust of which the commissioner has been notified by the

president of the New York state higher education services corporation

pursuant to the provisions of such agreement. For purposes of this

section, "governmental education loan" shall mean any education loan

debt, including judgments, owed to the federal or New York state

government that is being collected by the New York state higher

education services corporation.

(2) Such agreement shall apply only to the amount of a default in

repayment of any governmental education loan debt, including judgments,

being collected by the New York state higher education services

corporation. Such agreement shall require the New York state higher

education services corporation to satisfy the requirements of

subdivision three of section one hundred seventy-one-f of this article.

(3) Such agreement shall include:

(a) the procedure under which the New York state higher education

services corporation shall notify the commissioner of a default in

repayment of a governmental education loan, such procedure to specify

when the commissioner shall be notified and the content of such

notification;

(b) the minimum amount outstanding on a default in repayment of a

governmental education loan against which the commissioner shall,

pursuant to this section, credit an overpayment;

(c) the procedure for reimbursement of the commissioner by the New

York state higher education services corporation for the full cost of

carrying out the procedures authorized by this section;

(d) such other matters as the parties to such agreement shall deem

necessary to carry out the provisions of this section; and

(e) the procedure for reimbursement of the comptroller by the New York

state higher education services corporation for overpayment and interest

thereon which has been credited against the amount of default in

repayment of a governmental education loan owed by a taxpayer filing a

joint return, but which has been refunded by the comptroller, pursuant

to paragraph six of subsection (b) of section six hundred fifty-one of

this chapter, to a spouse not liable for the amount of default in

repayment of a governmental education loan owed by such taxpayer.

(4) (i) In calculating the amount of an overpayment and interest

thereon which shall be credited against the amount of a default in

repayment of a governmental education loan owed by a taxpayer, the

commissioner shall first credit the overpayment and interest thereon

against any:

(A) liability of such taxpayer in respect of any tax imposed by this

chapter;

(B) liability of such taxpayer for any tax imposed pursuant to the

authority of this chapter or any other law if such tax is administered

by the tax commission;

(C) estimated tax for the succeeding taxable year if such taxpayer

claims such overpayment or a portion thereof as a credit against

estimated tax for such succeeding taxable year pursuant to subsection

(e) of section six hundred eighty-six of this chapter or subdivision (e)

of section 11-1786 of the administrative code of the city of New York

for any tax imposed pursuant to the authority of this chapter or any

other law if such tax is administered by the tax commission; and

(D) past-due support owed by the taxpayer pursuant to section one

hundred seventy-one-c of this article.

(E) the amount of a default in repayment of a state university loan or

city university loan pursuant to section one hundred seventy-one-e of

this article.

(F) the amount of a past-due legally enforceable debt owed to a state

agency pursuant to section one hundred seventy-one-f of this article.

(G) the amount of a city of New York tax warrant judgment debt owed to

the city of New York pursuant to section one hundred seventy-one-l of

this article.

(ii) Only the balance remaining, after such overpayment and the

interest thereon has been credited as described in paragraph (i) of this

subdivision, shall be certified as an overpayment plus any interest to

be credited against the amount of a default in repayment of a

governmental education loan, with the remainder to be refunded to the

taxpayer.

(5) The tax commission shall certify to the comptroller the total

amount of the overpayment and the interest on such overpayment, the

amount of such overpayment and the interest on such amount to be

credited against the amount of the default in repayment of a

governmental education loan and the balance of such overpayment and

interest to be refunded to the taxpayer.

(6) The commissioner shall notify the taxpayer making the overpayment,

in writing, of the amount of such overpayment and the interest thereon

certified to the comptroller as the amount to be credited against the

amount of a default in repayment of a governmental education loan. Such

notice shall include notification to any other person who may have filed

a joint return with the taxpayer of the steps such other person may take

in order to secure his or her proper share of the refund.

(7) From the time the state tax commission is notified by the New York

state higher education services corporation of an individual's, estate's

or trust's default in repayment of a governmental education loan under

the agreement provided for in this section, the state tax commission and

the department shall be relieved from all liability to such individual,

estate or trust, their assigns, successors, heirs or representatives for

the amount of an overpayment and interest on such amount certified to

the comptroller to be credited against the amount of default in

repayment of a governmental education loan and such individual, estate

or trust shall have no right to commence a court action or proceeding or

to any other legal recourse against the state tax commission or the

department to recover such overpayment or such interest certified to the

comptroller to be credited against the amount of default in repayment of

a governmental education loan. Provided, however, nothing herein shall

be construed to prohibit such individual, estate or trust from

proceeding against the New York state higher education services

corporation to recover that part of such overpayment or interest thereon

so certified to the comptroller to be credited against the amount of a

default in repayment of a governmental education loan which is greater

than the amount of such default owed by such individual, estate or trust

on the date of such certification.

(8) The tax commission shall promulgate such rules and regulations as

it deems necessary to carry out the provisions of this section.