N.Y. Tax Law § 620: Credit for income tax of another state

§ 620. Credit for income tax of another state. (a) General. A resident

shall be allowed a credit against the tax otherwise due under this

article for any income tax imposed on such individual for the taxable

year by another state of the United States, a political subdivision of

such state, the District of Columbia or a province of Canada, upon

income both derived therefrom and subject to tax under this article. The

term "income tax imposed" in the previous sentence shall not include the

portion of such tax (determined in the manner provided for in section

six hundred twenty-A) which is imposed upon the ordinary income portion

(or part thereof) of a lump sum distribution which is subject to the

separate tax imposed by section six hundred three.

(b) Pass-through entity taxes. (1) A resident shall be allowed a

credit against the tax otherwise due pursuant to this article for any

pass-through entity tax substantially similar to the tax imposed

pursuant to article twenty-four-A of this chapter imposed on the income

of a partnership or S corporation of which the resident is a partner,

member or shareholder for the taxable year by another state of the

United States, a political subdivision of such state, or the District of

Columbia upon income both derived therefrom and subject to tax under

this article.

(2) Such credit shall be equal to the taxpayer's direct share of the

pass-through entity tax paid by the electing partnership or electing S

corporation to such other state, political subdivision of such other

state or the District of Columbia.

(3) However, such credit will be allowed on tax paid only if:

(A) the state of the United States, political subdivision of such

state, or the District of Columbia imposing such tax also imposes an

income tax substantially similar to the tax imposed under this article;

and

(B) in the case of taxes paid by an S corporation, such S corporation

was treated as a New York S corporation.

(c) Limitations. (1) The credit under this section shall not exceed

the percentage of the tax otherwise due under this article determined by

dividing the portion of the taxpayer's New York income subject to

taxation by such other jurisdiction by the total amount of the

taxpayer's New York income.

(2) The credit under this section shall not reduce the tax otherwise

due under this article to an amount less than would have been due if the

income subject to taxation by such other jurisdiction were excluded from

the taxpayer's New York income.

(3) In the case of a taxpayer who elects to claim the foreign tax

credit for federal income tax purposes, the credit under this section

for income tax imposed by a province of Canada shall be allowed for that

portion of the provincial tax not claimed for federal purposes for the

taxable year or a preceding taxable year, provided however, to the

extent the provincial tax is claimed for federal purposes for a

succeeding taxable year, the credit under this section must be added

back in such succeeding taxable year. The provincial tax shall be deemed

to be claimed last for federal income tax purposes and for purposes of

this subsection.

(d) Definition. For purposes of this section New York income means:

(1) the New York adjusted gross income of an individual, or

(2) the amount of the income of an estate or trust, determined as if

the estate or trust were an individual computing his New York adjusted

gross income under section six hundred twelve.