Tax Law, § 620(b)
The amount of the credit against ordinary tax for income
tax imposed by another jurisdiction is subject to the limitations provided in
this section. Where credit is claimed against ordinary tax for income taxes
imposed by two or more taxing jurisdictions, as defined in section
120.1(b)(2)
of this Part, these limitations must be applied separately to each jurisdiction
for each credit being claimed. See section
120.3
of this Part for the limitations in cases where such credit is claimed for
income taxes imposed by both a state and one or more of its political
subdivisions.
(a) The credit for the
taxable year cannot exceed the income tax payable to the other jurisdiction.
When both a state (other than New York State) and one or more of its political
subdivisions impose income taxes on the same or different amounts of income
derived from sources within such state as defined in section
120.4(d)
of this Part, see section
120.3
of this Part. If a taxpayer on his or her New York State personal income tax
return claims a credit pursuant to this Part for the income tax or taxes (or
any portion thereof) of another jurisdiction, and it is later determined that
the amount of such tax or taxes (or the portion for which credit was claimed)
is more or less than the amount of credit claimed with respect to such tax or
taxes on the taxpayer's New York State personal income tax return, he or she
must file an amended New York State personal income tax return at the address
indicated on the form and in the instructions.
(b) The credit for the taxable year cannot
exceed the amount obtained by multiplying the New York State tax payable (see
section
120.4[b]
of this Part) by a percentage determined by dividing the portion of the
taxpayer's New York income subject to taxation in such other jurisdiction (the
numerator) by the taxpayer's total New York income (the denominator).
(c) The credit for the taxable year cannot
reduce the New York State tax payable to an amount less than would have been
due if the income subject to taxation by the other jurisdiction was excluded
from the taxpayer's New York income.
(d) When a taxpayer elects to claim the
foreign tax credit for Federal income tax purposes, the resident credit for
income tax imposed by a province of Canada will be allowed for the portion of
the Canadian provincial tax that is not claimed for Federal income tax purposes
for the taxable year or a preceding taxable year. If any amount of such portion
of the Canadian provincial tax is claimed for Federal purposes in a succeeding
taxable year, the amount claimed must be added back for New York State purposes
in such succeeding taxable year. The Canadian provincial tax will be treated as
being claimed last for Federal income tax purposes and for purposes of this
subdivision.
