N.Y. Tax Law § 688: Interest on overpayment

§ 688. Interest on overpayment.--(a) General.--Notwithstanding the

provisions of section sixteen of the state finance law, interest shall

be allowed and paid as follows at the overpayment rate set by the

commissioner pursuant to section six hundred ninety-seven, or if no rate

is set, at the rate of six per cent per annum upon any overpayment in

respect of the tax imposed by this article:

(1) from the date of the overpayment to the due date of an amount

against which a credit is taken;

(2) from the date of the overpayment to a date (to be determined by

the commissioner) preceding the date of a refund check by not more than

thirty days, whether or not such refund check is accepted by the

taxpayer after tender of such check to the taxpayer. The acceptance of

such check shall be without prejudice to any right of the taxpayer to

claim any additional overpayment and interest thereon.

(3) Late returns. Notwithstanding the provisions of paragraph one or

two of this subsection, in the case of a return of tax which is filed

after the last date prescribed for filing such return (determined with

regard to extensions), no interest shall be allowed or paid for any day

before the date on which the return is filed.

(4) Interest on certain refunds. To the extent provided for in

regulations promulgated by the commissioner of taxation and finance, if

an item of income, gain, loss, deduction or credit is changed from the

taxable year or period in which it is reported to the taxable year or

period in which it belongs and the change results in an underpayment in

a taxable year or period and an overpayment in some other taxable year

or period, the provisions of paragraph three of this subsection with

respect to an overpayment shall not be applicable to the extent that the

limitation in such paragraph on the right to interest would result in a

taxpayer not being allowed interest for a length of time with respect to

an overpayment while being required to pay interest on an equivalent

amount of the related underpayment. However, this paragraph shall not be

construed as limiting or mitigating the effect of any statute of

limitations or any other provision of law relating to the authority of

such commissioner to issue a notice of deficiency or to allow a credit

or refund on an overpayment.

(5) Amounts of less than five dollars. No interest shall be allowed or

paid if the amount thereof is less than five dollars.

(b) Advance payment of tax, payment of estimated tax, and credit for

income tax withholding.--The provisions of subsections (h) and (i) of

section six hundred eighty-seven applicable in determining the date of

payment of tax for purposes of determining the period of limitations on

credit or refund, shall be applicable in determining the date of payment

for purposes of this section.

(c) Income tax refund within forty-five days of claim for

overpayment.--If any overpayment of tax imposed by this article is

credited or refunded within forty-five days after the last date

prescribed (or permitted by extension of time) for filing the return of

such tax on which such overpayment was claimed or within forty-five days

after such return was filed, whichever is later, or within six months

after a demand is filed pursuant to paragraph six of subsection (b) of

section six hundred fifty-one of this chapter, no interest shall be

allowed under this section on any such overpayment. In regard to an

amended return claiming such overpayment or a claim for credit or refund

on which such overpayment was claimed, if such overpayment is refunded

within forty-five days of filing such return or such claim, no interest

shall be allowed from the date such return or such claim is filed until

the day the refund is made. For purposes of this subsection, any amended

return or claim for credit or refund filed before the last day

prescribed (or permitted by extension of time) for the filing of the

return of tax for such year shall be considered as filed on such last

day.

(d) Refund of income tax caused by carryback.--For purposes of this

section, if any overpayment of tax imposed by this article results from

a carryback of a net operating loss, such overpayment shall be deemed

not to have been made prior to the filing date for the taxable year in

which such net operating loss arises. Such filing date shall be

determined without regard to extensions of time to file. For purposes of

subsection (c) of this section any overpayment described herein shall be

treated as an overpayment for the loss year and such subsection shall be

applied with respect to such overpayment by treating the return for the

loss year as not filed before claim for such overpayment is filed. The

term "loss year" means the taxable year in which such loss arises.

(e) No interest until return in processible form.

(1) For purposes of subsections (a) and (c) of this section, a return

shall not be treated as filed until it is filed in processible form.

(2) For purposes of paragraph one of this subsection, a return is in a

processible form if--

(A) such return is filed on a permitted form, and

(B) such return contains--

(i) the taxpayer's name, address, and identifying number and the

required signatures, and

(ii) sufficient required information (whether on the return or on

required attachments) to permit the mathematical verification of tax

liability shown on the return.

(f) Overpayment credited against past-due support, or against a

past-due legally enforceable debt, or a city of New York tax warrant

judgment debt, or defaulted guaranteed student, state university or city

university loans.--If interest is payable pursuant to this section on

that portion of an overpayment of tax imposed by this article which is

certified by the commissioner of taxation and finance to the comptroller

as the amount to be credited against past-due support, or against a

past-due legally enforceable debt, or a city of New York tax warrant

judgment debt, or the amount of a default in repayment of a guaranteed

student, state university or city university loan, as the case may be,

pursuant to the provisions of section one hundred seventy-one-c, section

one hundred seventy-one-d, section one hundred seventy-one-e, section

one hundred seventy-one-f or section one hundred seventy-one-l of this

chapter, such portion of such an overpayment shall cease to bear

interest on the date of such certification.

(g) Cross-reference.--For provision with respect to interest after

failure to file notice of federal change under section six hundred

fifty-nine or six hundred fifty-nine-a, see subsection (c) of section

six hundred eighty-seven.

(h) Notwithstanding any other provisions in this section, for taxable

years beginning on or after January first, two thousand eight and before

January first, two thousand nine, interest will be allowed on an

overpayment on any return or report on which one or more empire zone tax

credits are claimed, only from the one hundred eightieth day after the

taxpayer files with the department an empire zone retention certificate

issued pursuant to subdivision (w) of section nine hundred fifty-nine of

the general municipal law to the empire zone enterprise which is the

basis for the tax credit or credits claimed on the return or report.