N.Y. Tax Law § 171-e: Certain overpayments credited against national defense/national direct, health professions or nursing student loans

§ 171-e. Certain overpayments credited against national

defense/national direct, health professions or nursing student loans.

(1) As used in this section only, the term "state university loan" or

"city university loan" refers to loans provided to students at

state-operated units of the state university of New York or the city

university of New York respectively under the national defense/national

direct, health professions or nursing student loan programs.

(2) The commissioner of taxation and finance, on behalf of the tax

commission, shall enter into a written agreement with the state

university of New York or the city university of New York respectively

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 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 a state university

loan or city university loan owed by such individual, estate or trust of

which the commissioner of taxation and finance has been notified by the

state university of New York or the city university of New York

respectively pursuant to the provisions of such agreement.

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

repayment of a state university loan or city university loan as to which

the state and/or state university of New York or the city university of

New York respectively has obtained a judgment or has made a

determination that satisfies the requirements of subdivision three of

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

(4) Such agreement shall include:

(a) the procedure under which the state university of New York or the

city university of New York respectively shall notify the commissioner

of taxation and finance of a default in a repayment of a state

university loan or city university loan, such procedure to specify when

the commissioner of taxation and finance shall be notified and the

content of such notification;

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

state university loan or city university loan against which the

commissioner of taxation and finance shall, pursuant to this section,

credit an overpayment;

(c) the procedure for reimbursement of the commissioner of taxation

and finance by the state university of New York or the city university

of New York respectively for the full cost of carrying out the

procedures authorized by this section;

(d) a provision providing that information furnished to the state

university of New York or the city university of New York respectively

by the commissioner of taxation and finance and the comptroller pursuant

to said agreement shall be considered confidential and shall not be

disclosed except to such federal or state department or agency entitled

to such information;

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

necessary to carry out the provisions of this section; and

(f) the procedure for reimbursement of the comptroller by the state

university of New York or city university of New York for any

overpayment and interest thereon which has been credited against the

amount of default on repayment of a state university loan or a city

university 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 state

university loan or city university loan owed by such taxpayer.

(5) (a) In calculating the amount of an overpayment and interest

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

repayment of a state university loan or city university loan owed by a

taxpayer, the tax commission 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 chapter;

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

interest thereon has been credited as described in paragraph (a) 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 state

university loan or city university loan, with the remainder to be

refunded to the taxpayer if such remainder is not required to satisfy

the amount of a past-due legally enforceable debt pursuant to section

one hundred seventy-one-f of this article, and/or a city of New York tax

warrant judgment debt pursuant to section one hundred seventy-one-l of

this article and/or the amount of a default in repayment of a guaranteed

student loan pursuant to section one hundred seventy-one-d of this

article.

(6) 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 state

university loan or city university loan and the balance of such

overpayment and interest to be refunded to the taxpayer.

(7) The commissioner of taxation and finance 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 state

university loan or city university 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.

(8) From the time the state tax commission is notified by the state

university of New York or the city university of New York respectively

of an individual's, estate's or trust's default in repayment of a state

university loan or city university loan under the agreement provided for

in this section, the state tax commission and the department of taxation

and finance 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 a default in

repayment of such state university loan or city university 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 of taxation and finance to recover such

overpayment or such interest certified to the comptroller to be credited

against the amount of default in repayment of a state university loan or

city university loan. Provided, however, nothing herein shall be

construed to prohibit such individual, estate or trust from proceeding

against the state university of New York or the city university of New

York respectively 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 state university loan or city

university loan which is greater than the amount of such default owed by

such individual, estate or trust on the date of such certification.

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

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