N.Y. Tax Law § 624: Computation of separate tax on the ordinary income portion of lump sum distributions received by resident individuals, estates and trusts

§ 624. Computation of separate tax on the ordinary income portion of

lump sum distributions received by resident individuals, estates and

trusts. (a) Amount of separate tax. The amount of tax imposed under

section six hundred three for any taxable year, with respect to the

ordinary income portion of a lump sum distribution received by a

resident individual, estate or trust is an amount equal to five times

the tax which would be imposed by subsection (c) of section six hundred

one if the recipient of such lump sum distribution were an individual

referred to in such subsection and the New York taxable income were an

amount equal to one-fifth of the excess of:

(1) the total taxable amount of the lump sum distribution for the

taxable year, over

(2) the minimum distribution allowance.

(b) Minimum distribution allowance. For purposes of this section, the

minimum distribution allowance shall be that which is calculated

according to subparagraph (C) of paragraph one of subsection (e) of

section four hundred two of the internal revenue code.

(c) Multiple distributions and distributions of annuity contracts. For

purposes of this section, the rules concerning multiple distributions

and distributions of annuity contracts as specified by paragraph two of

subsection (e) of section four hundred two of the internal revenue code

shall be applicable, except that references to "paragraph (1) (A)" shall

be deemed to be references to this section, and except that only lump

sum distributions (or portions thereof) and distributions of annuity

contracts subject to tax under this article shall be included, and

except that references to the secretary shall be deemed to be references

to the tax commission.

(d) Definitions and special rules. For purposes of this section, the

following provisions shall apply, to the extent applicable to the

taxpayer's federal tax on lump sum distributions: (1) the definitions

and special rules as specified in paragraph four of subsection (e) of

section four hundred two of the internal revenue code; and (2) the

special rules relating to (A) individuals who have attained the age of

fifty before January first, nineteen hundred eighty-six and (B) capital

gains, as specified in paragraphs three, four, five and six of

subsection (h) of section eleven hundred twenty-two of the tax reform

act of nineteen hundred eighty-six as enacted by public law 99-514, but

(i) in the event that paragraph three of such subsection is applicable,

clause (ii) of subparagraph (B) of such paragraph shall be applied using

a rate of five and four-tenths percent, and (ii) in the event that

paragraph five of such subsection is applicable, the words "five" and

"one-fifth" in subsection (a) of this section shall be read as "ten" and

"one-tenth", respectively, and subsection (a) of this section shall be

applied by using the rate of tax specified in subsection (f) of section

six hundred two as such subsection was in effect for taxable years

beginning in nineteen hundred eighty-six.