N.Y. Tax Law § 687: Limitations on credit or refund

§ 687. Limitations on credit or refund.-- (a) General.-- Claim for

credit or refund of an overpayment of income tax shall be filed by the

taxpayer within (i) three years from the time the return was filed, (ii)

two years from the time the tax was paid, or (iii) in the case of any

overpayment arising from an erroneous denial by the department of

environmental conservation of a certification of completion pursuant to

section 27-1419 of the environmental conservation law, two years from

the time a final determination to the effect that such denial was

erroneous is made and is no longer subject to judicial review, whichever

of such periods expires the latest, or if no return was filed, within

two years from the time the tax was paid. If the claim is filed within

the three year period, the amount of the credit or refund shall not

exceed the portion of the tax paid within the three years immediately

preceding the filing of the claim plus the period of any extension of

time for filing the return unless such claim is for a credit or a

portion thereof provided pursuant to paragraph two or four of subsection

(c), paragraph two or four of subsection (d) or subsection (e) of

section six hundred six of this chapter. If the claim is not filed

within the three year period, but is filed within the two year period,

the amount of the credit or refund shall not exceed the portion of the

tax paid during the two years immediately preceding the filing of the

claim unless such claim is for a credit or a portion thereof provided

pursuant to paragraph two or four of subsection (c), paragraph two or

four of subsection (d) or subsection (e) of section six hundred six of

this chapter. In the case of a claim for credit or refund filed within

the period prescribed in paragraph (iii) of this subsection, the amount

of the credit or refund may exceed the portion of the tax paid within

the applicable period specified in the two immediately preceding

sentences, but only to the extent of the amount of the overpayment

attributable to the denial described in such paragraph. Except as

otherwise provided in this section, if no claim is filed, the amount of

a credit or refund shall not exceed the amount which would be allowable

if a claim had been filed on the date the credit or refund is allowed.

(b) Extension of time by agreement.--If an agreement under the

provisions of paragraph (2) of subsection (c) of section six hundred

eighty-three (extending the period for assessment of income tax) is made

within the period prescribed in subsection (a) for the filing of a claim

for credit or refund, the period for filing a claim for credit or

refund, or for making credit or refund if no claim is filed, shall not

expire prior to six months after the expiration of the period within

which an assessment may be made pursuant to the agreement or any

extension thereof. The amount of such credit or refund shall not exceed

the portion of the tax paid after the execution of the agreement and

before the filing of the claim or the making of the credit or refund, as

the case may be, plus the portion of the tax paid within the period

which would be applicable under subsection (a) if a claim had been filed

on the date the agreement was executed.

(c) Notice of federal change or correction.--A claim for credit or

refund of any overpayment of tax attributable to a federal change or

correction required to be reported pursuant to section six hundred

fifty-nine or by a partner of a partnership required to report a federal

change or correction pursuant to section six hundred fifty-nine-a shall

be filed by the taxpayer within two years from the time the notice of

such change or correction or such amended return was required to be

filed with the commissioner of taxation and finance. If the report or

amended return required by section six hundred fifty-nine or six hundred

fifty-nine-a is not filed within the ninety day period therein

specified, no interest shall be payable on any claim for credit or

refund of the overpayment attributable to the federal change or

correction. The amount of such credit or refund shall not exceed the

amount of the reduction in tax attributable to such federal change,

correction or items amended on the taxpayer's amended federal income tax

return. This subsection shall not affect the time within which or the

amount for which a claim for credit or refund may be filed apart from

this subsection.

(d) Overpayment attributable to net operating loss carryback.--A claim

for credit or refund of so much of an overpayment as is attributable to

the application to the taxpayer of a net operating loss carryback shall

be filed within three years from the time the return was due (including

extensions thereof) for the taxable year of the loss, or within the

period prescribed in subsection (b) in respect of such taxable year, or

within the period prescribed in subsection (c), where applicable, in

respect of the taxable year to which the net operating loss is carried

back, whichever expires the latest.

(e) Failure to file claim within prescribed period.--No credit or

refund shall be allowed or made, except as provided in subsection (f) of

this section or subsection (d) of section six hundred ninety, after the

expiration of the applicable period of limitation specified in this

article, unless a claim for credit or refund is filed by the taxpayer

within such period. Any later credit shall be void and any later refund

erroneous. No period of limitations specified in any other law shall

apply to the recovery by a taxpayer of moneys paid in respect of taxes

under this article.

(f) Effect of petition to tax commission.--If a notice of deficiency

for a taxable year has been mailed to the taxpayer under section six

hundred eighty-one and if the taxpayer files a timely petition with the

tax commission under section six hundred eighty-nine, it may determine

that the taxpayer has made an overpayment for such year (whether or not

it also determines a deficiency for such year). No separate claim for

credit or refund for such year shall be filed, and no credit or refund

for such year shall be allowed or made, except--

(1) as to overpayments determined by a decision of the tax commission

which has become final; and

(2) as to any amount collected in excess of an amount computed in

accordance with the decision of the tax commission which has become

final; and

(3) as to any amount collected after the period of limitation upon the

making of levy for collection has expired; and

(4) as to any amount claimed as a result of a change or correction

described in subsection (c).

(g) Limit on amount of credit or refund.--The amount of overpayment

determined under subsection (f) shall, when the decision of the tax

commission has become final, be credited or refunded in accordance with

subsection (a) of section six hundred eighty-six and shall not exceed

the amount of tax which the tax commission determines as part of its

decision was paid--

(1) after the mailing of the notice of deficiency, or

(2) within the period which would be applicable under subsections (a),

(b) or (c), if on the date of the mailing of the notice of deficiency a

claim had been filed (whether or not filed) stating the grounds upon

which the tax commission finds that there is an overpayment.

(h) Early return.--For purposes of this section, any return filed

before the last day prescribed for the filing thereof shall be

considered as filed on such last day, determined without regard to any

extension of time granted the taxpayer.

(i) Prepaid income tax.--For purposes of this section, any tax paid by

the taxpayer before the last day prescribed for its payment, any income

tax withheld from the taxpayer during any calendar year, and any amount

paid by the taxpayer as estimated income tax for a taxable year shall be

deemed to have been paid by him on the fifteenth day of the fourth month

following the close of his taxable year with respect to which such

amount constitutes a credit or payment.

(j) Return and payment of withholding tax.--Notwithstanding subsection

(h), for purposes of this section with respect to any withholding tax--

(1) if a return for any period ending with or within a calendar year

is filed before April fifteenth of the succeeding calendar year, such

return shall be considered filed on April fifteenth of such succeeding

calendar year; and

(2) if a tax with respect to remuneration paid during any period

ending with or within a calendar year is paid before April fifteenth of

the succeeding calendar year, such tax shall be considered paid on April

fifteenth of such succeeding calendar year.

(k) Running of periods of limitation suspended while taxpayer is

unable to manage financial affairs due to disability. -- (1) In the case

of an individual taxpayer, the running of the periods specified in

subsections (a), (b), and (c) of this section shall be suspended during

any period of such individual's life that such individual is financially

disabled. For purposes of this subsection, an individual taxpayer is an

individual who is subject to any state or local personal income tax or

surcharge administered by the commissioner.

(2) For purposes of paragraph one of this subsection, an individual

taxpayer is financially disabled if such individual is unable to manage

his or her financial affairs by reason of a medically determinable

physical or mental impairment of that individual which can be expected

to result in death or which has lasted or can be expected to last for a

continuous period of not less than twelve months. An individual shall

not be considered to have such an impairment unless proof of the

existence thereof is furnished in such form and manner as the

commissioner may require.

(3) An individual taxpayer shall not be treated as financially

disabled during any period that such individual's spouse or any other

person is authorized to act on behalf of such individual in financial

matters.

(l) Cross reference.-- For provision barring refund of overpayment

credited against tax of a succeeding year, except for good cause shown,

see subsection (e) of section six hundred eighty-six.