Attention: The deadline to e-file your 2008 return was 10/15/2009, however, you can still use eSmart Tax to prepare, print and mail your 2008 return to the IRS/State for processing

New York Tax Form IT-201 - Resident Income Tax Return (Long Form) Instructions

Instructions for Long Form IT-201

Full-Year Resident Income Tax Return

What's new for 2007?

New York City school tax credit increased - The New York City school tax credit has been increased for New York City residents with federal adjusted gross income (minus any IRA distributions) of $250,000 and less. If you are married filing jointly or a qualifying widow(er), the credit is increased to $290; for all others, the credit is $145. See pages 30 and 101.
Solar energy system equipment credit expanded - Tenant-shareholders in a cooperative housing corporation or condominium owners may now claim a percentage of the qualified expenditures for qualified solar energy system equipment purchased and installed by the cooperative housing corporation or the condominium management association. For additional information, see Form IT-255, Claim for Solar Energy System Equipment Credit.
New subtraction modification for living organ donors - A new subtraction from federal adjusted gross income is available to full-year New York State residents who, while living, donate one or more human organs to another person for human organ transplantation. The subtraction is equal to the unreimbursed expenses incurred by you, relating to your organ donation, for travel, lodging, and lost wages, up to a maximum of $10,000. See pages 23 and 90.
New child and dependent care credit for New York City residents - For tax years beginning on or after January 1, 2007, New York City full-year and part-year residents with federal adjusted gross income of $30,000 or less who paid child care expenses for children under the age of four may be eligible to claim a new refundable New York City child and dependent care credit. This credit may be claimed in addition to the New York State child and dependent care credit. For additional information, see Form IT-216, Claim for Child and Dependent Care Credit, and its instructions.
New historic homeownership rehabilitation credit - A new credit is available for qualified rehabilitation expenditures paid or incurred for the rehabilitation of a qualified historic home located in New York State. To be eligible, you must own and reside in the historic home in the year for which you claim the credit. The credit is equal to 20% of the qualified rehabilitation expenditures. For additional information, see Form IT-237, Claim for Historic Homeownership Credit, and its instructions.
New volunteer firefighters' and ambulance workers' credit - A new $200 refundable credit is available to full-year New York State residents who are active volunteer firefighters or volunteer ambulance workers for the entire tax year for which the credit is claimed. For additional information, see Form IT-245, Claim for Volunteer Firefighters' and Ambulance Workers' Credit.
New rehabilitation of historic properties credit - A new credit for rehabilitation of historic properties is available to taxpayers who are allowed a federal credit with respect to a certified historic structure, as defined under Internal Revenue Code (IRC) section 47(c)(3), located in New York State. The credit is equal to 30% of the federal credit allowed for the same tax year. For additional information, see Form IT-238, Claim for Rehabilitation of Historic Properties Credit, and its instructions.
New Empire State commercial production credit - A new credit is available to qualified commercial production companies, or sole proprietors of qualified commercial production companies, for qualified production costs paid or incurred. For additional information, see Form IT-246, Claim for Empire State Commercial Production Credit.
Extension of tax shelter reporting requirements - The expiration date of the reporting requirements and related administrative provisions concerning the disclosure of certain transactions and related information regarding tax shelters, including those related to New York reportable transactions, has been extended to July 1, 2009. For additional information see TSB-M-07(6)I, Extension of Tax Shelter Provisions.

How do I fill in the forms?

Please follow these guidelines-

Use black ink only (no red or other color ink or pencils) to print or type all entries.
Write your numbers and X marks like this:

1 2 3 4 5 6 7 8 9 0 X

Carefully enter your money amounts so that the dollar amount ends in the box immediately to the left of the decimal point and the cents amount starts in the box immediately to the right of the decimal point.
Do not write in dollar signs, commas, or decimal points when making entries. You can round money entries to the nearest dollar (fifty cents or more is rounded up). If you do round numbers, you must be consistent and round all numbers.
If you make an entry on a line, always fill in the cents area. If rounding or using a whole dollar amount, enter 00 in the cents boxes. Do not make any entry in areas that do not apply to you unless these instructions specifically direct you to do so; treat blank lines as zeros.
Mark an X to fill in boxes as appropriate. Do not use a check mark. Keep your Xs and numerals inside the boxes.

Common words and phrases

To save space and enhance clarity, these instructions may use common abbreviations, including:

EIC = earned income credit federal

federal AGI = federal adjusted gross income

IRC = Internal Revenue Code

IRS = Internal Revenue Service

New York AGI = New York State adjusted gross income

NYS = New York State

NYC = New York City

Instructions

Step 1 - Completing the taxpayer information section

Part A- Name and address

If you received a tax packet by mail, your peel-off name-and-address label is under the flap on the inside front cover. After you complete your return, place the label in the box at the top of your return.

Check the label for accuracy. If the label is correct, go to Part B.

If any information is wrong, cross it out and make the corrections directly on the label. Space is limited so if your name contains more than 36 characters, and it is correct except for missing final characters, do not make a correction.

If you do not have a label, write the following in the spaces provided:

Name: First name, middle initial, and last name for you, and, if you are filing a joint return, your spouse.
Mailing address: PO box or street address, city, state, and ZIP code where you wish to receive your mail (refund and correspondence).

Foreign addresses - Enter the information in the following order: city, province or state, and then country (all in the City, village, or post office box). Follow the country's practice for entering the postal code. Do not abbreviate the country name.

Part B- Permanent home address

If your mailing address is different from your permanent home address (for instance, you use a PO box), enter your permanent home address. Your permanent home address is the address of the dwelling place in New York State where you actually live, whether you or your spouse own or rent it.

If you use a paid preparer and you use the preparer's address as your mailing address, enter the address of your permanent home in the space provided.
If you are a permanent resident of a nursing home, enter the nursing home address.
If you are in the armed forces and your permanent home was in New York State when you entered the military, enter your New York permanent home address regardless of where you are stationed.
If you are married and maintain separate New York State residences and are filing separate New York State returns, enter as your permanent home address the address of your own residence.
If you moved after December 31, 2007, enter your permanent home address as of December 31, 2007, not your current home address. Enter your new home address in the mailing address area if you want your refund and other correspondence sent there.

Part C -Social security numbers

You must enter your social security number(s) whether or not you are using the peel-off label. Be sure your social security numbers are in the same order as your names.

Part D- New York State county of residence

If this information appears correctly on your label, go to Part E.

If you do not have a label, or the information is incorrect, enter the county in New York State where you lived on December 31, 2007. If you live in New York City, use one of the following county names:

If you live in	use county
Bronx	Bronx
Brooklyn	Kings
Manhattan	New York
Queens	Queens
Staten Island	Richmond

Part E- School district name and code

If you do not have a label or your school district code number is missing or incorrect:

Enter the correct code number and the name of your school district. This is the district where you were a resident on December 31, 2007. School districts and code numbers are on pages 42 through 45. If you do not know the name of your school district, contact your nearest public school.

You must enter your school district name and code number even if you were absent from the school district temporarily, if the school your children attended was not in your school district, or if you had no children attending school. Incorrect district names and code numbers may affect school aid.

Part F- Decedent information

If the taxpayer whose name is listed first on the return died after December 31, 2006, enter the date of death in the boxes labeled Taxpayer's date of death, in month, day, and last two digits of year order. If the taxpayer whose name is listed second died after December 31, 2006, enter the date of death in the boxes labeled Spouse's date of death. See Deceased taxpayers on page 39.

Step 2 - Filing status and items B through E

Item (A)

In nearly all cases you must use the same filing status that you used on your federal return. If you did not have to file a federal return, use the filing status you would have used if you had filed.

The only exceptions to this rule apply to married individuals who file a joint federal return and:

one spouse is a New York State resident and the other is a nonresident or part-year resident. In this case, you must either: (a) file separate New York returns using filing status 3; or (b) file jointly, as if you both were New York State residents, using filing status 2.
you are unable to file a joint New York return because the address or whereabouts of your spouse is unknown, you can demonstrate that reasonable efforts have been made to locate your spouse, and good cause exists for the failure to file a joint New York return. In this case, you may file a separate New York return using filing status 3.
your spouse refuses to sign a joint New York return, reasonable efforts have been made to have your spouse sign a joint return, there exists objective evidence of alienation from your spouse such as judicial order of protection, legal separation under a decree of divorce or separate maintenance, or living apart for the twelve months immediately preceding application to file a separate return or commencement of an action for divorce or commencement of certain family court proceedings, and good cause exists for the failure to file a joint New York return. In this case, you may file a separate New York return using filing status 3.

Item (B)

If you itemized your deductions on your 2007 federal income tax return, mark an X in the Yes box. If you claimed the standard deduction on your federal return, mark an X in the No box.

Item (C)

If you can be claimed as a dependent on another taxpayer's federal return, you must mark an X in the Yes box. You must mark the Yes box even if the other taxpayer did not claim you as a dependent. For example, if another taxpayer was entitled to claim you as a dependent on his or her federal return, but chose not to so that you can claim the federal education credit, you must mark the Yes box.

Item (D)

Please help us reduce waste and taxpayer-financed paper, printing, and mailing costs. Mark an X in the box if you do not need a New York State income tax packet next year. Most taxpayers do not need a full tax packet with forms and instr uctions because they can download them from our Web site at www.nystax.gov , use our fax-on-demand system, or get them at some post offices, libraries, or community centers (see Need help? on the back cover). Other taxpayers e-file, use tax preparation software, or go to an accountant or tax preparer to have their returns completed. Please note that if you e-file, use software, or use a preparer, we will not send you a tax packet next year.

If we sent you a tax packet this year and you are using an original paper return (For m IT-150 or IT-201) from your packet, we will automatically send you a tax packet next year unless you mark an X in the box (next year's forms will be available in Januar y 2009). Consider your situation for next year and whether you will actually need these paper tax forms again. If not, mark an X in the box.

Item (E)

If you, or your spouse if married filing jointly, maintained or had use of an apar tment or living quar ters in New York City during any part of 2007, mark an X in the box for Item E.

Living quarters include a house, apartment, co-op, or any other dwelling that you or your spouse maintain or pay for, or that is maintained for your primary use by another person, family member, or employer. For example, if a company leases an apar tment for the principal, but not exclusive, use of the company's president or chief executive officer, that individual would be considered as maintaining living quarters in New York City even though others might use the apartment occasionally.

Note: You may be considered a New York City resident if you spend 184 days or more (a par t of a day is a day for this purpose) in New Yor k City. See the definition of Resident, nonresident and part-year resident on page 36. If you meet the definition, complete the New York City resident taxes and credits lines (47 through 53, and 67 and 68) on Form IT-201. See the instructions on pages 98 through 100, and 103 and 104.

Item (F)

New York City residents and part-year residents only: Enter in the applicable box the number of months you and your spouse (if filing a joint return) lived in New York City during 2007. We need this information to verify your New York City school tax credit.

All other taxpayers should leave the boxes at Item (F) blank.

Item (G)

If you qualify for one or more of the four special conditions below, enter the specified 2-digit code(s).

Code 01 Combat zone - Enter this code if you qualify for an extension of time to file and pay your tax due under the combat zone or contingency operation relief provisions. See Publication 361, New York State Income Tax Information for Military Personnel and Veterans.

Code 02 Combat zone, killed in action (KIA) - Enter this code if you are filing a return on behalf of a member of the armed forces who died while serving in a combat zone. See Publication 361 for information on filing a claim for tax forgiveness.

Code 03 Out of the country - Enter this code if you qualify for an automatic two-month extension of time to file your federal return because you are out of the country. For additional information, see When to file/Important dates on the back cover.

Code 04 Nonresident aliens - Enter this code if you are a U.S. nonresident alien for federal income tax purposes and you qualify to file your federal income tax return on or before June 15, 2008. The filing deadline for your New York return is similarly extended until June 15, 2008.

Code E5 Extension of time to file beyond six months - Enter this code if you qualify for an extension of time to file beyond six months under section 157.3(b)(1)(i) of the personal income tax regulations because you are outside the United States and Puerto Rico.

Step 3 - Federal income and adjustments

Lines 1 through 18 Federal income tax return information

The computation of your New York State (and New York City and Yonkers) income tax is based on information you reported on your federal income tax return, including your income and federal adjustments to income. If you did not file a federal return, you must report the same income and adjustments that you would have reported for federal income tax purposes if you had filed a federal return.

Use the chart below to complete lines 1 through 18.

Be sure to enter your total other income on line 15 and your total federal adjustments to income on line 17. Write each type of income and each adjustment and its amount in the Identify areas as shown above in the shaded examples on lines 15 and 17. If you need more room, attach a list showing each type of income and each adjustment and its amount.

Caution: Do not leave line 18 blank.

To completeForm IT-201, line:	if you filed Form 1040EZ, transfer the amount from line:	if you filed Form 1040A, transfer the amount from line:	or, if you filed Form 1040,transfer the amountfrom line:	and attach a copy of the following federal forms:
1	1	7	7
2	2	8	8a
3		9a	9a
4			10
5			11
6			12	Schedule C or C-EZ
7		10	13	Schedule D, if required
8			14	Form 4797
9		11b	15b
10		12b	16b
11			17	Schedule E
12			18	Schedule F
13	3	13	19
14		14b	20b
15			21
16		15	22
17		20	36
18	4	22	38

Step 4 - New York adjustments/New York adjusted gross income

Overview - The computation of your New York State income tax is based on your New York adjusted gross income (New Yor k AGI), which is your federal adjusted gross income (federal AGI) modified by certain New York adjustments (New York additions and New York subtractions).

New York State taxes certain items of income not taxed by the federal government. You must add these New York additions to your federal AGI. Enter any of the listed additions on lines 20 through 23.

Similarly, New York State does not tax cer tain items of income taxed by the federal government. You must subtract these New York subtractions from federal AGI on lines 25 through 31.

Partners - If you have income from a par tnership, include any New York adjustments that apply to that income. Obtain your share of partnership additions and subtractions from your partnership.

The New York additions relating to your partnership income will be shown on your Form IT-204-IP, New York Partner's Schedule K-1, lines 20a through 20f. If you have an addition to your partnership income relating to interest income on state and local bond obligations (EA-3), include that amount on your Form IT-201, line 20. If you have an addition to your partnership income relating to New York's 529 college saving program distributions (EA-18), include that amount on your Form IT-201, line 22 (see the instructions for line 22). For all other additions relating to your partnership income, write in the applicable item number(s) (EA-1 through EA-19) and the amount of each addition in the white Identify area of line 23. Enter the total amount of these additions, and any other additions reported on line 23, in the money column

Beneficiaries (estates and trusts) - If you have income from an estate or tr ust, any New York adjustments that apply to that income, as well as any additions to or subtractions from federal itemized deductions, will be shown in your share of a single fiduciary adjustment. If the adjustment is a net addition, enter this amount on line 23; if the adjustment is a net subtraction, enter this amount on line 31. Identify this item as FA.

If you filed federal Form 4970, Tax on Accumulation Distribution of Trusts , the income you reported on line 1 of For m 4970 is not included on line 11 of Form IT-201 because the IRC considers the distribution part of federal gross income. You must therefore include on line 23 the amount of income you reported on Form 4970, line 1, less any interest income on state and local bonds and obligations of New York State and its local governments (that was included on Form 4970, line 5). Be sure to identify the source of this income as Form 4970 income.

S Corporation shareholders - If you are a shareholder of a federal S corporation for which the election to be a New York S corporation was in effect for the taxable year, include any of the following additions and subtractions that apply to your pro rata share of S corporation items of income, gain, loss, or deduction. Additions A-24, A-25, and A-26, and subtraction S-32 do not apply to you since they apply only to nonelecting S cor porations. If the election to treat the cor poration as a New York S corporation terminated dur ing the taxable year, you must make the additions and subtractions only to the extent they are attributable to the period for which the election to be a New York S corporation was in effect. Obtain your share of S corporation items of income, gain, loss, and deduction from the S corporation.

If you are a shareholder of an S corporation that was eligible to make the election to be a New York S corporation for the taxable year but did not make the election, include additions A-24, A-25, A-26, and subtraction S-32.

If you were not eligible to make the election to treat your corporation as a New York S corporation because the corporation was not subject to Ar ticle 9-A, general business corporation franchise tax, or Article 32, banking corporation franchise tax, include any of the following additions and subtractions that apply to your pro rata share of S corporation items of income, gain, loss, or deduction. Additions A-23, A-24, A-25, and A-26, and subtractions S-31 and S-32 do not apply to you since they apply only to electing and nonelecting New York S corporations.

If a gain or loss is recognized on your federal income tax return due to the disposition of stock or indebtedness of an S corporation that did not elect to be a New York S corporation for any taxable year after December 31, 1980, make addition A-26 or subtraction S-31, whichever applies to you.

You must make the adjustments for the tax year of the S corporation that ends in your tax year.

New York additions

Line 20 Interest income on state and local bonds and obligations

Do you have interest income from state and local bonds and obligations from states other than New York State or its local governments?

If No , go to line 21.

If Yes , enter any such interest income that you received or that was credited to you during 2005 that was not included in your federal AGI. This includes interest income on state and local bonds, interest and dividend income from tax-exempt bond mutual funds, and tax-exempt money market funds that invest in obligations of states other than New York.

If you purchased a bond between interest dates, include the amount of interest you received during the year, less the seller's accrued interest (the amount accrued from the interest date preceding your purchase to the date you purchased the bond). If you sold a bond between interest dates, include the amount of interest you received during the year plus the accrued interest amount (the amount accrued from the interest date preceding the date you sold the bond to the date you sold the bond). You should have received this information when you purchased the bond.

Line 21 Public employee 414(h) retirement contribution

Are you a public employee of NYS or its local governments?

If No , go to line 22.

If Yes , enter the amount of 414(h) retirement contributions, if any, shown on your wage and tax statement(s), federal Form W-2, if you are:

a Tier 3 or Tier 4 member of the NYS and Local Retirement Systems, which include the NYS Employees' Retirement System and the NYS Police and Fire Retirement System; or
a Tier 3 or Tier 4 member of the NYS Teachers' Retirement System; or
an employee of the State or City University of New York who belongs to the Optional Retirement Program; or
a member of any tier of the NYC Employees' Retirement System, the NYC Teachers' Retirement System, the NYC Board of Education Retirement System, the NYC Police Pension Fund or the NYC Fire Department Pension Fund; or
a member of the Manhattan and Bronx Surface Transit Operating Authority (MABSTOA) Pension Plan.

Do not enter contributions to a section 401(k) deferred arrangement, section 403(b) annuity or section 457 deferred compensation plan.

Line 22 New York's 529 college savings program distributions

Did you make a withdrawal during 2007 from an account established under New York's 529 college savings program?

If No , go to line 23.

If Yes , and the withdrawal was a nonqualified withdrawal, you must complete the worksheet below.

A withdrawal is nonqualified if: 1) the funds are used for purposes other than the higher education of the designated beneficiary; 2) the withdrawal is actually disbursed in cash or in-kind from the college savings program, even if the amount withdrawn is reinvested in New York's 529 college savings program within the Internal Revenue Code 60-day rollover period; or 3) on or after January 1, 2003, the funds are transferred from New York's 529 college savings program to another state's program (whether for the same beneficiary or for the benefit of another family member). However, nonqualified withdrawals do not include any withdrawals made in tax year 2007 as a result of the death or disability of the designated beneficiary, regardless of how the funds are used.

Note: Transfers between accounts of family members not disbursed in cash or in-kind within New York's program are not considered distributions and are therefore not required to be added back as nonqualified withdrawals.

Include the applicable amounts from all existing accounts you own on lines 1 through 7 of the worksheet below. Do not include amounts applicable to accounts that were closed in a prior tax year. If you are filing a joint return, include the applicable amounts from all existing accounts owned by you and your spouse.

Also include on lines 1 and 2 your share of any amounts withdrawn or contributed by a partnership of which you are a partner. The partnership should provide this information to you. A partnership includes a limited liability company (LLC) that has elected to be treated as a partnership for federal income tax purposes.

Please note: Before completing the worksheet below, you must first compute your Form IT-201, line 30, subtraction for New York's 529 college savings program for 2007. See page 87.

Worksheet

1. Total current and prior years' nonqualified withdrawals (see pg. 82) from your account(s)..	1.__________
2. Total current and prior years' contributions to your account(s)...........................................	2.__________
3. Total current year's (S-2) subtraction modification (from line 1 of Worksheet for line 30 on page 87) and prior years' subtraction modifications* ..............................	3.__________
4. Subtract line 3 from line 2...............................	4.__________
5. Total prior years' addition modifications**.......	5.__________
6. Add lines 4 and 5............................................	6.__________
7. Subtract line 6 from line 1. This is your current year addition modification. Enter this amount on Form IT-201, line 22...............	7.__________
If line 7 is 0 (zero) or less, there is no addback.

* These amounts are included in line 28 of your 1998, 1999, and 2000 Form IT-201 (S-26 subtraction modification); on Form IT-201-I, line 29 worksheet, line 1, for tax years 2001 through 2004; in line 19 of your 2005 and 2006 Form IT-150 (S-2 subtraction modification); and on Form IT-201-I, line 30 worksheet, line 1, for tax years 2005 and 2006.
** These amounts are included in line 21 of your 1998, 1999 (A-23 addition modification), and 2000 (A-22 addition modification) Form IT-201; on line 21 of your 2001 through 2004 Form IT-201; in line 14 of your 2005 and 2006 Form IT-150 (A-1 addition modification); and on line 22 of your 2005 and 2006 Form IT-201.
Keep this worksheet with your copy of your tax return.

Line 23 Other additions

Use this line to report the following additions that are not specifically listed on Form IT-201.

Write in the applicable item number(s) (A-1 through A-26) and the amount of each addition in the white Identify area. Enter the total amount of these other additions in the money column.

A-1 Income from certain obligations of U.S. government agencies or instrumentalities

If, during 2007, you received or were credited with any interest or dividend income from any U.S. government authority, commission, or instrumentality that federal laws exempt from federal income tax but do not exempt from state income tax, then include that income. If you are uncertain whether a particular federal bond or obligation is subject to state income tax, contact the Tax Department (see Need help? on the back cover).

A-2 Interest expense on loans used to buy obligations exempt from NYS tax, amortized bond premium on bonds that are exempt from NYS tax and other expenses relating to the production of income exempt from NYS tax

If your federal AGI includes a deduction for interest expense used to buy bonds, obligations, or securities whose interest income is taxable for federal purposes but exempt from New York State tax, then include that interest expense.
If your federal AGI includes a deduction for the amortization of bond premiums on bonds whose interest income is taxable for federal purposes but exempt from NYS tax, then include that amortized premium.
If your federal AGI includes a deduction for expenses relating to the production of income which is taxable for federal purposes but exempt from New York State tax, then include that interest expense.

A-3 New York City flexible benefits program (IRC 125)

If your wage and tax statement(s), federal Form W-2, show(s) that an amount was deducted or deferred from your salary under a flexible benefits program established by New York City or certain other New York City public employers on your behalf, then include this amount. Certain other New York City public employers include:

City University of New York;
NYC Health and Hospitals Corporation;
NYC Transit Authority;
NYC Housing Authority;
NYC Off-Track Betting Corporation;
NYC Board of Education;
NYC School Construction Authority;
NYC Rehabilitation Mortgage Insurance Corporation;
Manhattan and Bronx Surface Transit Operating Authority; and
Staten Island Rapid Transit Authority

A-4 Health insurance and the welfare benefit fund surcharge

If you were a career pension plan member of the NYC Employees' Retirement System or the NYC Board of Education Retirement System, and if your wage and tax statement(s), federal Form W-2, show an amount that was deducted from your salary for health insurance and the welfare benefit fund surcharge, then include this amount.

A-5 Special additional mortgage recording tax deduction

If you deducted special additional mortgage recording tax in figuring your federal AGI and in a prior year you were allowed a New York State personal income tax credit for that tax, then include the amount.

A-6 Special additional mortgage recording tax basis adjustment

If property on which you paid a special additional mortgage recording tax was sold or disposed of, and a special additional tax was paid on or before January 1, 1988, and in a prior year you claimed a New York State personal income tax credit for that tax, then include the amount, if any, of the federal basis of the property that was not adjusted to reflect the amount of the credit allowed.

A-7 Sales or dispositions of assets acquired from decedents

Note : This adjustment is not required for property acquired from decedents who died on or after February 1, 2000.

Assets of decedents can sometimes have different bases for state and federal tax purposes. This requires adjustments in the gain or loss on the sale or disposition of those assets.

If , during the tax year, there was a sale or other disposition of any assets that had been inherited or sold or disposed of directly by the estate of a decedent, and if the estate of the decedent was not large enough to require a federal estate tax return, and if the executor or administrator of that estate had valued those assets for New York State income tax purposes at less than their value for federal income tax purposes, then include the difference between (a) the gain or loss on that sale or disposition that you figured into your federal AGI for the tax year and (b) the gain or loss that would have resulted if the assets had been valued the same for New York State income tax purposes as for federal income tax purposes.

A-8 Disposition of solar and wind energy systems

If in any tax year beginning on or after January 1, 1981, and ending before December 31, 1986, you took a New York State solar and wind energy credit on property, and if that property was sold or otherwise disposed of in 2007, and if a reportable gain resulted for federal income tax purposes from that sale or disposition, and if you had included the cost of the energy system in the federal basis of the property but did not reduce the federal basis by the state credit, then include the amount of the credit you had previously claimed.

A-9 New business investment; deferral recognition

If , in any tax year beginning on or after January 1, 1982, and before 1988, you chose to subtract all or a portion of a long term capital gain from your federal AGI because you reinvested that amount in a new New York business, and you sold that reinvestment in 2005, then include the amount that you previously subtracted.

A-10 Qualified emerging technology investments (QETI)

If you elected to defer the gain from the sale of QETI because you reinvested in a New York qualified emerging technology company, and if you sold that reinvestment in 2007, then you must include the amount previously deferred. See subtraction S-14 on page 89.

Did you file federal Schedule(s) C, E, or F?

If No , go to the instructions for line 25.

If Yes , see addition modifications A-11 through A-26.

A-11 Personal income taxes and unincorporated business taxes deducted in determining federal adjusted gross income

You may not deduct personal income taxes or unincorporated business taxes in computing your New York State adjusted gross income.

If you included a deduction for state, local, or foreign income taxes, including unincorporated business taxes, when figuring your federal AGI, then you must include the amount of that deduction. For example, if you operated a business and deducted New York City unincorporated business tax on your federal Form 1040, Schedule C, as an expense of doing business, include this tax amount.

Partners - Include your distributive share of state, local, or foreign income taxes, including unincorporated business taxes, deducted in figuring net income.

S corporation shareholders - If you are a shareholder of a federal S corporation for which a New York S election was in effect, and if that corporation deducted taxes imposed by Article 9-A (general business corporation franchise tax), or Article 32 (banking corporation franchise tax), of the New York State Tax Law, then include your pro rata share of those taxes. (However, you do not need to include state or local taxes of another state, political subdivision of another state, or the District of Columbia.)

A-12 Percentage depletion

If you claimed a deduction on your federal return for percentage depletion, then include the amount deducted in figuring your federal AGI. Also see subtraction S-22 on page 90.

A-13 Safe harbor leases (see IRC section 168(f)(8))

If , in figuring your federal AGI, you took deductions attributable to a safe harbor lease (except for mass transit vehicles) made under an election provided for by IRC section 168(f)(8) as it was in effect for agreements entered into prior to January 1, 1984, then include those deductions. Also see A-14, S-24, and S-25.

A-14 Safe harbor leases

If your financial matters in 2007 involved a safe harbor lease (except for mass transit vehicles) made under an election provided for by section 168(f)(8) of the IRC as it was in effect for agreements entered into prior to January 1, 1984, then you must include the income that you would have included in your federal AGI if such an election had not been made. Also see A-13, S-24, and S-25.

A-15 Accelerated cost recovery system (ACRS) deduction

If you claimed ACRS depreciation on your federal return for:

property placed in service during tax years 1981 through 1984 (other than 280F property); or
property placed in service outside New York State for 1985 through 1993 (other than 280F property) and you elect to continue using IRC 167 depreciation ( see TSB-M-99(1)l );

then include the amount that was deducted in figuring your federal AGI. You must attach Form IT-399, New York State Depreciation Schedule.

A-16 ACRS property; year of disposition adjustment

If you disposed of property which was depreciated for federal purposes using ACRS, and if ACRS depreciation was not allowed for state purposes (see A-15), then you must complete Part 2 of Form IT-399, New York State Depreciation Schedule, to figure the amount to include. Also see S-27 on page 91.

A-17 Farmers' school tax credit

If you claimed the farmers' school tax credit on your 2006 New York State tax return, and if you deducted your school taxes in figuring your federal AGI on your 2006 federal return, then you must include the amount of the credit claimed for 2006 on this year's return. However, do not make this modification if you were required to report the amount of the credit as income on your 2007 federal return.

A-18 Sport utility vehicle expense deduction

If you claimed an IRC section 179 deduction on your federal return with respect to a sport utility vehicle that weighs more than 6,000 pounds, and you are not an eligible farmer as defined for purposes of the farmers' school tax credit (see Form IT-217-I, Instructions for Form IT-217 , Claim for Farmers' School Tax Credit ), then include the amount of that deduction.

A sport utility vehicle is any four-wheeled passenger vehicle manufactured primarily for use on public streets, roads, and highways. However, sport utility vehicle does not include (1) any ambulance, hearse, or combination ambulance-hearse used directly in a trade or business; (2) any vehicle used directly in the trade or business of transporting persons or property for compensation or hire; or (3) any truck, van, or motor home. A truck is any vehicle that has a primary load-carrying device or container attached, or is equipped with an open cargo area or covered box not readily accessible from the passenger compartment.

A-19 IRC section 168(k) property depreciation

With the exception of resurgence zone property and New York liberty zone property described in IRC section 1400L(b)(2), New York State does not follow the federal depreciation rules for IRC section 168(k) property placed in service inside or outside New York State on or after June 1, 2003. If you claimed a depreciation deduction for such property, and if no exception for resurgence zone or New York liberty zone property applies, then complete Part 1 of Form IT-398, New York State Depreciation Schedule for IRC Section 168(k) Property, to determine the amount to include. Attach Form IT-398 to your return.

A-20 Special depreciation

If you made an election for tax years beginning before 1987 for:

special depreciation,
research and development expenditures,
waste treatment facility expenditures,
air pollution control equipment expenditures, or
acid deposition control equipment,

then include the amount of depreciation or expenditures relating to these items that was deducted in determining your federal AGI. Also see subtraction S-23 on page 90.

A-21 Royalty and interest payments made to a related member or members

For tax years beginning on or after January 1, 2003, New York requires certain taxpayers to add back deductions they took on their federal return for certain royalty payments for the use of intangible property, such as trademarks or patents, and interest payments they made to a related member or members. Include the amount for any such payments you deducted on your federal return. See Tax Law section 612 (r).

A-22 Environmental remediation insurance premiums

If you paid premiums on or after April 1, 2007, for environmental remediation insurance and you claimed a deduction for such premiums and you also claimed the environmental remediations insurance credit, then include the amount of the environmental remediations insurance credit allowed.

Additions A-23, A-24, A-25, A-26 apply to S corporation shareholders only. For additional information, see New York State Publication 35, New York Tax Treatment for S Corporations and Their Shareholders.

A-23 S corporation shareholders; reduction for taxes

If you are a shareholder of an S corporation for which a New York S corporation election was in effect for the taxable year, then include your pro rata share of the S corporation's reductions for taxes imposed on built-in gains and reductions for taxes imposed on excess net passive income as described in IRC sections 1366(f)(2) and (3).

A-24 S corporation shareholders; pass-through loss or deduction items

If you are a shareholder of an S corporation which is a New York C corporation, then include any S corporation pass-through items of loss or deduction you took into account in figuring your federal AGI, pursuant to IRC section 1366.

A-25 S corporation shareholders

If you did not include S corporation distributions in your federal AGI due to the application of IRC sections 1368, 1371(e), or 1379(c), and if these distributions were not previously subject to New York personal income tax because the corporation was a New York C corporation, then include these distributions.

A-26 S corporation shareholders; disposition of stock or indebtedness with increased basis

Federal law requires holders of stock or indebtedness in a federal S corporation to include undistributed taxable income in their federal AGI and take a corresponding increase in basis. New York law requires a similar increase in basis on disposition of the stock or indebtedness where the federal S corporation is or was a New York C corporation.

If you reported a federal gain or loss because of the disposition of stock or indebtedness of an S corporation, and if that S corporation was a New York C corporation for any taxable year beginning after December 31, 1980 (in the case of a corporation taxable under Article 9-A, general business corporation tax), or December 31, 1996 (in the case of a corporation taxable under Article 32, banking corporation franchise tax), then include the increase in the basis of the stock or indebtedness that is due to the application of IRC sections 1376(a) (as in effect for taxable years beginning before January 1, 1983) and 1367(a)(1)(A) and (B) for each taxable year that a New York S election was not in effect.

New York subtractions

Line 26 Pensions of New York State and local governments and the federal government

Did you receive a pension or other distribution from a NYS or local government pension plan or federal government pension plan? If No , go to line 27.

If Yes , and the pension or distribution amount was included in your federal AGI, enter any pension you received, or distributions made to you from a pension plan which represents a return of contributions in a year prior to retirement, as an officer, employee, or beneficiary of an officer or employee of:

NYS, including State and City University of New York and NYS Education Department employees who belong to the Optional Retirement Program.
- Optional Retirement Program members may only subtract that portion attributable to employment with the State or City University of New York or the NYS Education Department.
Certain public authorities, including:
- Metropolitan Transit Authority (MTA) Police 20-Year Retirement Program;
- Manhattan and Bronx Surface Transit Operating Authority (MABSTOA); and
- Long Island Railroad Company.
Local governments within the state, including:
- NYS Teachers' Retirement System;
- NYC Teachers' Retirement System;
- NYC Teachers' Retirement IRC 403(b) plan; and
- NYC variable supplemental funds (VSF), including:
  - Transit Police Officers' VSF
  - Transit Police Superior Officers' VSF
  - Housing Police Officers' VSF
  - Housing Police Superior Officers' VSF
  - Police Officers' VSF Police Superior Officers' VSF
  - Firefighters' VSF Fire Officers' VSF
  - Corrections Officers' VSF
  - Corrections Captain and Above VSF.
The United States, its territories, possessions (or political subdivisions thereof), or any agency or instrumentality of the United States (including the military), or the District of Columbia.

You may not subtract pension payments or return of contributions that were attributable to your employment by an employer other than a New York public employer, such as a private university, and any portion attributable to contributions you made to a supplemental annuity plan which was funded through a salary reduction program. However, these payments may qualify for the pension and annuity income exclusion described in the instructions for line 29 below.

Line 28 Interest income on U.S. government bonds

Did you include interest income from U.S. government bonds or other U.S. government obligations on lines 2, 6, or 11? If No , go to line 29.

If Yes , enter the amount of interest income earned from bonds or other obligations of the U.S. government.

Dividends you received from a regulated investment company (mutual fund) that invests in obligations of the U.S. government and meet the 50% asset requirement each quarter qualify for this subtraction. The portion of such dividends that may be subtracted is based upon the portion of taxable income received by the mutual fund that is derived from federal obligations.

Contact the mutual fund for further information on meeting the 50% asset requirement and figuring your allowable subtraction (if any).

If you include an amount on line 28 from more than one line on Form IT-201, attach a schedule showing the breakdown from each line.

Do not list the same interest more than once on lines 28 and 31; see the instructions for line 31, subtractions S-1 and S-3 on page 87 and 88.

Line 29 Pension and annuity income exclusion

Did you enter an amount on line 9 or 10 that was not from a NYS or local government pension plan or federal government pension plan? If No , go to line 30.

If Yes , and you were 59½ before January 1, 2007, enter the qualifying pension and annuity income included in your 2007 federal AGI, but not more than $20,000 . If you became 59½ during 2007, enter only the amount received after you became 59½, but not more than $20,000 . If you received pension and annuity income and are married, or received pension and annuity income as a beneficiary, see below.

$20,000 limit - You may not take a pension and annuity income exclusion that exceeds $20,000, regardless of the source(s) of the income.

Qualifying pension and annuity income includes:

periodic payments for services you performed as an employee before you retired;
periodic and lump-sum payments from an IRA, but not payments derived from contributions made after you retired;
periodic distributions from government (IRC section 457) deferred compensation plans;
periodic distributions from an annuity contract (IRC section 403(b)) purchased by an employer for an employee and the employer is a corporation, community chest, fund, foundation, or public school;
periodic payments from an HR-10 (Keogh) plan, but not payments derived from contributions made after you retired;
lump-sum payments from an HR-10 (Keogh) plan, but only if federal Form 4972 is not used. Do not include that part of your payment that was derived from contributions made after you retired;
periodic distributions of benefits from a cafeteria plan (IRC section 125) or a qualified cash or deferred profit-sharing or stock bonus plan (IRC section 401(k)), but not distributions derived from contributions made after you retired.

Married taxpayers - If you both qualify, you and your spouse can each subtract up to $20,000 of your own pension and annuity income. However, you cannot claim any unused part of your spouse's exclusion.

Example: A husband and wife, both age 62, included total pension and annuity income of $45,000 in their federal AGI on their 2007 joint federal tax return. The husband received qualifying pension and annuity payments totaling $30,000 and the wife received qualifying payments totaling $15,000. They are filing a joint 2007 New York State resident personal income tax return. The husband may claim the maximum pension and annuity income exclusion of $20,000, and the wife may claim an exclusion of $15,000, for a total pension and annuity income exclusion of $35,000.

Beneficiaries - If you received a decedent's pension and annuity income, you may make this subtraction if the decedent would have been entitled to it, had the decedent continued to live, regardless of your age.

If the decedent would have become 59½ during 2007, enter only the amount received after the decedent would have become 59½, but not more than $20,000. If the decedent has more than one beneficiary, the decedent's $20,000 pension and annuity income exclusion must be allocated among the beneficiaries in the same ratio as the distribution, so that the total exclusion attributable to the decedent does not exceed $20,000.

Example: A taxpayer received pension and annuity income totaling $6,000 as a beneficiary of a decedent who was 59½ before January 1, 2007. The decedent's total pension and annuity income was $24,000, shared equally among four beneficiaries. Each beneficiary is entitled to one-quarter of the decedent's pension exclusion, or $5,000 ($20,000 divided by 4). The taxpayer also received a qualifying pension and annuity payment of $14,000 in 2007. The taxpayer is entitled to claim a pension and annuity income exclusion of $19,000 ($14,000 attributable to the taxpayer's own pension and annuity payment, plus $5,000 received as a beneficiary*).

* The total amount of the taxpayer's pension and annuity income exclusion that can be applied against the taxpayer's pension and annuity income received as a beneficiary is limited to the taxpayer's share of the decedent's pension and annuity income exclusion.

Disability exclusion - If you are also claiming the disability income exclusion, the total of your pension and annuity income exclusion and disability income exclusion cannot exceed $20,000.

Line 30 New York's 529 college savings program deduction/earnings distributions

During 2007, did you make contributions to or a withdrawal from one or more tuition savings accounts established under New York's 529 college savings program? If No , go to line 31. If you made contributions, enter the amount up to $5,000 ($10,000 for married taxpayers filing a joint return) on line 1 of the worksheet below.

If you made a withdrawal and part of the withdrawal was included in your federal AGI on line 21 of federal Form 1040, then enter that amount on line 2 of the worksheet below.

Line 31 Other subtractions

Use this line to report the following subtractions that are not specifically listed on Form IT-201. Write in the applicable item number(s) (S-1 through S-32) and the amount of each subtraction in the white Identify area on line 31. Enter the total amount of these subtractions on line 31 in the money column.

S-1 Certain investment income from U.S. government agencies

Include any interest or dividend income on bonds or securities of any U.S. authority, commission, or instrumentality that is exempt from state income taxes under federal laws (but that you included in your federal AGI).

S-2 Certain railroad retirement income and railroad unemployment insurance benefits

Include supplemental annuity or Tier 2 benefits received under the Railroad Retirement Act of 1974, or benefits received under the Railroad Unemployment Insurance Act that are exempt from state income taxes under federal laws (but that you included in your federal AGI).

S-3 Certain investment income exempted by other New York State laws

Include any interest or dividend income from any obligations or securities authorized to be issued and exempt from state taxation under the laws of New York State. (For example, income received from bonds, mortgages, and income debenture certificates of limited dividend housing corporations organized under the Private Housing Finance Law.)

S-4 Disability income exclusion

Complete Form IT-221, Disability Income Exclusion, to compute your disability income exclusion if you were not yet 65 when your tax year ended, and you retired on disability, and you were permanently and totally disabled when you retired.

S-5 Long-term residential care deduction

If you were a resident in a continuing-care retirement community that was issued a certificate of authority by the NYS Department of Health, then include the portion of the fees you paid during the year that were attributable to the cost of providing long-term care benefits to you under a continuing care contract. However, do not enter more than the premium limitation shown for your age in the Limitation table below. If you and your spouse both qualify, you may each take the subtraction. However, you cannot claim any unused part of your spouse's subtraction.

S-6 New York organized militia income

Include income that you received as a member of the New York organized militia for performing active service within NYS due to emergency state active duty orders issued pursuant to section six of the Military Law that was included in your federal AGI. Do not include any income you receive for regular duties in the organized militia (for example, pay received for the annual two-week training program) or any income received because you were called to active duty in the United States armed forces. Members of the NYS organized militia include the New York Army National Guard, the New York Air National Guard, the New York Naval Militia, and the New York Guard.

S-7 Loss from the sale or disposition of property that would have been realized if a federal estate tax return had been required

Note : This subtraction cannot be made for property acquired from decedents who died on or after February 1, 2000.

If you acquired a decedent's property and, as valued by the executor, the estate was insufficient to require a federal estate tax return, and if a loss on the sale would have been realized if a federal estate tax return had been required, then include the amount of the loss.

S-8 Accelerated death benefits received that were includable in federal adjusted gross income

Include any amount you included in your federal AGI that was received by any person as (a) an accelerated payment or payments of part or all of the death benefit or special surrender value under a life insurance policy, or (b) a viatical settlement, as a result of a terminal illness (life expectancy of 12 months or less), or of a medical condition requiring extraordinary medical treatment, regardless of life expectancy.

S-9 Contributions for Executive Mansion, natural and historical resources, not deducted elsewhere

Include contributions you made, not deducted elsewhere, (a) to preserve, improve, and promote the Executive Mansion as a New York State historical resource, or (b) to the Natural Heritage Trust to preserve and improve the natural and historical resources of NYS. Do not include amounts you deducted in determining federal AGI or New York itemized deductions.

S-10 Distributions made to a victim of Nazi persecution

Include amounts you included in your federal AGI from an eligible settlement fund or grantor trust as defined by section 13 of the Tax Law (because you were persecuted or targeted for persecution by the Nazi regime), or distributions received because of your status as a victim of Nazi persecution, or as a spouse or heir of the victim (successors or assignees, if payment is from an eligible settlement fund or grantor trust).

S-11 Items of income related to assets stolen from, hidden from, or otherwise lost to a victim of Nazi persecution

Include items of income you included in your federal AGI attributable to, derived from, or in any way related to assets stolen from, hidden from, or otherwise lost to a victim of Nazi persecution immediately prior to, during, and immediately after World War II, including but not limited to interest on the proceeds receivable as insurance under policies issued to a victim of Nazi persecution by European insurance companies immediately prior to and during World War II, or as a spouse or heir of such victim.

However, do not include income attributable to assets acquired with assets as described above or with the proceeds from the sale of any asset described above. Also, do not include any income if you were not the first recipient of the asset, or if you are not a victim of Nazi persecution, or a spouse or descendent of a victim.

S-12 Professional service corporation shareholders

If in a taxable year ending after 1969 and beginning before 1988, you included in your federal AGI deductions made by a plan acquired through membership in a professional service corporation (PSC), then include the portion of those deduction that can be allocated to pension, annuity, or other income you received from the plan, and were included in your 2007 federal AGI.

S-13 Gain to be subtracted from the sale of a new business investment reported on your federal income tax return

If you reported a capital gain on your federal income tax return from the sale of a new business investment, as defined in NYS Tax Law section 612(o), that was issued before 1988 and was held at least six years, then include one-hundred percent (100%) of that federal gain.

S-14 Qualified emerging technology investments (QETI)

In general, you may defer the gain on the sale of QETI that are 1) held for more than 36 months, and 2) rolled over into the purchase of replacement QETI within 365 days from, and including, the date of sale. However:

You must recognize any gain to the extent that the amount realized on the sale of the original QETI exceeds the cost of replacement QETI;
You must add back any deferred gain in the year you sell the replacement QETI; and
The gain deferral applies only to QETI sold on or after March 12, 1998, that was held for more than 36 months.

If you elect to defer the gain from the sale of QETI, then include the amount of the deferred gain. This amount may not exceed the amount of the gain included in your federal AGI.

If the purchase of replacement QETI within the 365-day period occurred in the same taxable year as the sale of the original QETI, or in the following taxable year and before the date you filed your personal income tax return, then, take the deduction on that return.
If the purchase of replacement QETI within the 365-day period occurred in the following taxable year and on or after the date you filed your personal income tax return, then you must file an amended return to claim the deduction (see Form IT-201-X, Amended Resident Income Tax Return, on page 10).
If the deferred gain must be included in a subsequent year's tax return because the replacement QETI has been sold, then include that amount as an addition to federal AGI (see A-10 on page 84).

A QETI is an investment in the stock of a corporation, or an ownership interest in a partnership or limited liability company (LLC) that is a qualified emerging technology company, or an investment in a partnership or an LLC to the extent that such partnership or LLC invests in such companies. The taxpayer must acquire the investment as provided in IRC section 1202(C)(1)(B), or from a person who acquired it pursuant to that section. IRC section 1202(c)(1)(B) requires the acquisition to be original issue from the company, either directly or through an underwriter, and in exchange for cash, services, or property (but not in stock).

A qualified emerging technology company (QETC) is a company that is located in New York State, has total annual product sales of 10 million dollars or less, and meets either of the following criteria:

its primary products or services are classified as emerging technologies; or
it has research and development activities in New York State and its ratio of research and development funds to net sales equals or exceeds the average ratio for all surveyed companies classified (as determined by the National Science Foundation in its most recent Survey of Industry Research and Development, or any comparable successor survey, as determined by the Tax Department).

S-15 Sales or dispositions of assets acquired before 1960 with greater state than federal bases

New York State income tax laws prior to 1960 and current laws regarding depletion can result in a difference in the state and federal adjusted bases of certain assets. If you realize a federally taxable gain from the sale of an asset that had a higher adjusted basis for state tax purposes, you may make an adjustment to reduce your gain for state tax purposes.

If your federal AGI included gain that was from either :

property that had a higher adjusted basis for NYS income tax purposes than for federal tax purposes on December 31, 1959 (or on the last day of a fiscal year ending during 1960); or
property that was held in connection with mines, oil or gas wells, and other natural deposits and that had a higher adjusted basis for NYS income tax purposes than for federal tax purposes when sold;

then include the lesser of the gain itself or the difference in the adjusted bases.

Note: If you divide gain with respect to jointly owned property between you and your spouse, then you must also divide any subtraction for different adjusted bases between you and your spouse.

S-16 Income earned before 1960 and previously reported to New York State

Include any income (including annuity income) or gain you included in your 2007 federal AGI that you (or the decedent or estate or trust from whom you acquired the income or gain) properly reported to NYS prior to 1960 (or during a fiscal year ending in 1960.)

S-17 Living organ donors

If during 2007 you were a living donor who donated one or more of your organs to another person for human organ transplantation, then include unreimbursed expenses incurred for travel, lodging, and lost wages, up to a maximum of $10,000. You may claim this subtraction only once during your lifetime.

Did you file federal Schedule(s) C-EZ, C, E, or F?

If No, go to the instructions for line 34.

If Yes, see subtraction modifications S-18 through S-33.

S-18 Trade or business interest expense on loans used to buy federally tax exempt obligations that are taxable to New York State

You may deduct interest expense you incur to buy an obligation that generates investment income that is taxable to a trade or business. If you included, on either line 20 or line 23, interest income from bonds or other obligations that is federally tax exempt but taxable to NYS, and the expense you incurred in buying the obligation is attributable to a trade or business you carried on, then include that expense.

S-19 Trade or business expenses (other than interest expense) connected with federally tax-exempt income that is taxable to New York State

You may deduct expenses you incur to acquire or maintain income that is taxable to a trade or business. If you included, on either line 20 or line 23, income that is federally tax exempt but taxable to NYS, and if the expense you incurred to either produce or collect that income or manage, conserve or protect the assets that produce that income was not deducted for federal purposes, and if those expenses are attributable to a trade or business you carried on, then include that expense.

S-20 Amortizable bond premiums on bonds that are owned by a trade or business and the interest on which is federally tax-exempt income but taxable to New York State

You may deduct expenses you incur to buy an obligation that generates investment income that is taxable to a trade or business.

If you are including, on either line 20 or line 23, interest income that is federally tax exempt but taxable to New York State, and if those bonds were bought for more than their face value (i.e., at a premium), and if you did not reduce your federal AGI by deducting the amortization of that premium attributable to 2007, and if those bonds were owned by a trade or business carried on by you in 2007 (as opposed to personal investments), then include that amortization.

S-21 Wage and salary expenses allowed as federal credits but not as federal expenses

If you took a federal Indian employment credit, a work opportunity credit, or an empowerment zone employment credit for wages and salaries paid to one or more people in certain groups, then include the amount of such wages you did not deduct on your federal return.

S-22 Cost depletion

If you are making addition A-12 for any percentage depletion, then include the cost depletion that IRC section 611 would allow on that property without any reference to either IRC section 613 or 613-a.

S-23 Special depreciation expenditures

You may carry over excess expenditures you incurred in taxable years beginning before 1987 in connection with depreciable, tangible business property located in New York State to the following taxable year or years, and deduct such expenditures in computing your New York AGI for that year or years, if the expenditures exceed your New York AGI for that year before the allowance of those expenditures. Complete Form IT-211, Special Depreciation Schedule , to compute the amount to include. Attach Form IT-211 to your return.

S-24 Safe harbor leases

Include any amount you included in federal AGI (except for mass transit vehicles) solely because you made the safe harbor election on your federal return for agreements entered into before January 1, 1984.

S-25 Safe harbor leases

Include any amount that you could have excluded from federal AGI (except for mass transit vehicles) had you not made the safe harbor election on your federal return for agreements entered into before January 1, 1984.

S-26 New York depreciation allowed

If you claimed ACRS depreciation on your federal return for:

property placed in service during tax years 1981 through 1984 (except IRC section 280F property); or
property placed in service outside New York State for 1985 through 1993 (except IRC section 280F property) and you elect to continue using IRC section 167 depreciation (see TSB-M-99(1)I);

then include the amount of your New York depreciation. Complete and attach Form IT-399, New York State Depreciation Schedule, to your return.

S-27 ACRS (year of disposition adjustment)

If you disposed of property in 2007 that was depreciated for federal purposes using ACRS, and if your total federal ACRS deduction exceeds your New York depreciation deduction for that property, then complete Part 2 of Form IT-399, New York State Depreciation Schedule , to compute the amount to include. See addition A-16, on page 84. Attach Form IT-399 to your return.

S-28 Sport utility vehicle expense deduction recapture

If you previously claimed an IRC section 179 deduction with respect to a sport utility vehicle that weights more than 6,000 pounds, and you had to recapture any amount of that deduction in computing your federal AGI for 2007, and if you are not an eligible farmer as defined for the farmers' school tax credit, then include the recapture amount. (See addition A-18 on page 84 for the definition of a sport utility vehicle.)

S-29 IRC section 168(k) property depreciation

With the exception of resurgence zone property and New York liberty zone property described in IRC section 1400L(b)(2), New York State does not follow the federal depreciation rules for IRC section 168(k) property placed in service inside or outside New York State on or after June 1, 2003. If you claimed a depreciation deduction for such property, and if no exception for resurgence zone or New York liberty zone property applies, then complete Part 1 of Form IT-398, New York State Depreciation Schedule for IRC Section 168(k) Property , to compute the amount of New York depreciation to include. Attach Form IT-398 to your return.

S-30 IRC section 168(k) property (year of disposition adjustment)

If you dispose of IRC section 168(k) property placed in service inside or outside New York State on or after June 1, 2003 (except for resurgence zone property, and New York liberty zone property described in IRC section 1400L(b)(2)), and your total federal depreciation deduction is more than your New York depreciation deduction for that property, then complete Part 2 of Form IT-398, New York State Depreciation Schedule for IRC Section 168(k) Property , to compute the amount of the disposition adjustment to include. Attach Form IT-398 to your return.

S-31 Royalty and interest payments made to a related member or members

For tax years beginning on or after January 1, 2003, New York requires taxpayers to add back deductions they took on their federal return for certain royalty payments for the use of intangible property, such as trademarks or patents, and interest payments they made to a related member or members. See instructions for A-21 on page 85. In such a case, the recipient of the payments must subtract the payments in computing New York AGI. If you received such a related member payment, include the amount you included in your federal taxable income. See section 612(r) of the Tax Law.

Subtractions S-31 and S-32 apply to S corporation shareholders only. For additional information, see New York State Publication 35, New York Treatment of S Corporations and Their Shareholders.

S-32 S corporation shareholders

If , you reported a federal gain or loss because of the disposition of stock or indebtedness of an S corporation, and if that S corporation was a New York C corporation for any taxable year beginning after December 31, 1980 (in the case of a corporation taxable under Article 9-A, general business corporation tax), or December 31, 1996 (in the case of a corporation taxable under Article 32, banking corporation franchise tax), then include the reduction in basis of the stock or indebtedness that is due to the application of IRC section 1376(b) (as in effect for taxable years beginning before January 1, 1983) and 1367(a)(2)(B) and (C) for each taxable year that the New York election was not in effect.

If , with respect to stock described above, you made any New York additions to federal AGI required under addition A-25 on page 85, then include the total of those additions. See New York Tax Law section 612(b)(20).

S-33 S corporation shareholders - pass-through income

If you included in your federal AGI any S corporation pass-through income pursuant to IRC section 1366 and the corporation is a New York C corporation, then include the pass-through income.

Line 33 New York adjusted gross income

Do not leave line 33 blank.

Step 5 - Standard or itemized deduction

Line 34 Standard or itemized deduction

Follow these steps to determine which deduction to use:

If you took the standard deduction on your federal return, or if you did not have to file a federal return, you must take the New York standard deduction. Use the standard deduction table on page 2 of Form IT-201 to find the standard deduction amount for your filing status. Enter the amount on line 34, mark an X in the Standard box, and go to line 35.
If you itemized deductions on your federal return, use the itemized deduction worksheet on page 2 of Form IT-201 and the instructions below to compute your New York itemized deduction. Compare the line p amount from the worksheet to your New York standard deduction amount from the standard deduction table, also on page 2. For greater tax savings, enter the larger of these amounts on line 34 and mark an X in the appropriate box, Standard or Itemized.

Caution: If you are married and filing separate returns (filing status .), both of you must take the standard deduction unless both of you itemized deductions on your federal returns and both of you elect to itemize deductions on your New York returns.

Note: If you paid qualified college tuition expenses, your New York itemized deduction may be increased to an amount greater than your New York standard deduction as shown in the table on Form IT-201. You should complete the New York State itemized deduction worksheet on Form IT-201 to determine if your allowable New York itemized deduction is greater than your standard deduction.

New York itemized deduction overview – The starting point in computing your New York itemized deduction amount is your federal itemized deductions from federal Schedule A. However, differences between federal and New York State tax laws make it necessary to make certain adjustments to your federal itemized deductions in computing your New York itemized deduction.

The subtraction adjustments on line i of the NYS itemized deduction worksheet reflect the fact that New York does not allow certain federal itemized deductions such as the federal deduction for state and local income taxes. Because of limits on certain federal deductions, and the overall limit on federal itemized deductions applicable to higher income taxpayers, it may be necessary for you to complete one or more worksheets to determine the amount of the New York subtraction adjustment.

New York State itemized deduction worksheet instructions (page 2, Form IT-201)

Lines a through h

Enter the amounts from the designated lines of your federal Schedule A (Form 1040).

Line i - Subtraction adjustments A through F

To compute your New York itemized deduction, you must subtract certain amounts deducted on your federal return that cannot be deducted on your state return. Follow these steps:

Add the amounts of the adjustments described in items A through F below and on page 93. If this total includes any of the adjustments described in items B through F, list them on a separate piece of paper marked Itemized deduction worksheet-subtraction adjustments. Identify the amount of each adjustment by letter (B through F) and attach that paper to your return.

A. State, local, and foreign income taxes from federal Schedule A, lines 5 and 8.

B. Ordinary and necessary expenses paid or incurred in connection with income, or property held for the production of income, which is exempt from New York income tax but only to the extent included in total federal itemized deductions.

C. Amortization of bond premium attributable to 2007 on any bond whose interest income is exempt from New York income tax, but only to the extent included in total federal itemized deductions.

D. Interest expense on money borrowed to purchase or carry bonds or securities whose interest is exempt from New York income tax, but only to the extent included in total federal itemized deductions.

E. If you are a shareholder of a federal S corporation that could elect but did not elect to be a New York S corporation, any S corporation deductions included in your total federal itemized deductions. If an S corporation short year is involved, you must allocate those deductions.

F. Premiums paid for long-term care insurance to the extent deducted in determining federal taxable income (from line 5 of Worksheet 1 below).

Worksheet 1- Long-term care adjustment
1. Amount of long-term care premiums included on federal Schedule A, line 1 .................	1._________
2. Amount from federal Schedule A, line 1................	2._________
3. Divide line 1 by line 2 and round to the fourth decimal place..............................................	3._________
4. Amount from federal Schedule A, line 4................	4._________
5. Multiply line 4 by line 3..........................................	5._________

If the amount on Form IT-201, line 18, is $156,400 or less ($78,200 if married filing separately), enter the total of your subtraction adjustments on line i.

If the amount on Form IT-201, line 18, is greater than $156,400 ($78,200 if married filing separately), you must complete Worksheet 2 below.

Worksheet 2
1. Enter amount from line 11 of the federal itemized deduction worksheet in the instructions for line 29 of federal Form 1040, Schedule A........	1.________
2. Enter amount from federal itemized deduction worksheet, line 3...................................	2.________
3. Divide line 1 by line 2 and round to the fourth decimal place........................................	3.________
4. Amount of subtraction adjustment A (see page 92)........................................................	4.________
5. Amount of subtraction adjustments B (see page 92) and C (described above) that are included in total federal itemized deductions from federal Schedule A, line 29, before any federal disallowance. Also include that portion of the deductions under subtraction adjustment E that is included in lines 19, 27, and 28 of federal Schedule A (e.g., contributions)............................	5.________
6. Add line 4 and line 5..............................................	6.________
7. Multiply line 6 by line 3..........................................	7.________
8. Subtract line 7 from line 6.....................................	8.________
9. Enter the amount of subtraction adjustments D and E described above, excluding that portion of E included in line 5 above..............	9.________
10. Enter the amount from Worksheet 1, line 5.........	10.________
11. Add lines 8, 9, and 10. Enter the total on Form IT-201, itemized deduction worksheet, line i. ..............................	11.________

Partners - Include on line i the subtractions described above that apply to your share of partnership deduction items. Obtain your share of partnership items from your Form IT-204-IP, lines 26a through 26f.

S corporation shareholders - If you are a shareholder of a federal S corporation that is a New York S corporation, or if you were not eligible to make the election to treat your corporation as a New York S corporation because the corporation is not subject to Article 9-A, general business corporation franchise tax, or Article 32, banking corporation franchise tax, include on line i subtractions B, C, D, and F described above that apply to your pro rata share of S corporation items of income, loss or deduction. If the election to be a New York S corporation terminated during the tax year, you must allocate those items. Obtain your share of S corporation items from the S corporation.

If you are a shareholder of a federal S corporation that could, but did not, elect to be a New York S corporation, include subtraction E only.

Line j

Subtract line i from line h and enter the result.

If you made no entry on line i, enter the amount from line h on line j.

Line k - Addition adjustments G, H, and I

In computing your New York itemized deduction, you may add certain amounts that you were not entitled to deduct on your federal return but that you may deduct on your New York State return.

List any of the addition adjustments below that apply to you on a separate piece of paper marked Itemized deduction worksheet - addition adjustments. Identify the amount of each adjustment that applies to you by item letter (G, H, and I). Add all of your addition adjustments and enter the total on line k. Attach that paper to your return.

G. Interest expense on money borrowed to purchase or carry bonds or securities whose interest is subject to New York income tax, but exempt from federal income tax, if this interest expense was not deducted on your federal return or shown as a New York subtraction.

H. Ordinary and necessary expenses paid or incurred during 2007 in connection with income, or property held for the production of income, which is subject to New York income tax but exempt from federal income tax, if these expenses were not deducted on your federal return or shown as a New York subtraction.

I. Amortization of bond premium attributable to 2007 on any bond whose interest income is subject to New York income tax, but exempt from federal income tax, if this amortization was not deducted on your federal return or shown as a New York subtraction.

Partners - Include on line k the additions described above that apply to your share of partnership deduction items. Obtain your share of partnership items from your Form IT-204-IP, lines 24a through 24f.

S corporation shareholders - If you are a shareholder of a federal S corporation that is a New York S corporation for the tax year, or if you were not eligible to make the election to treat your corporation as a New York S corporation because the corporation is not subject to Article 9-A, general business corporation franchise tax, or Article 32, banking corporation franchise tax, include on line k additions G through I, described on page 93, that apply to your pro rata share of S corporation items of income, loss or deduction. If the election to be a New York S corporation terminated during the tax year, you must allocate those items. Obtain your share of S corporation items from the S corporation.

Line l

Add lines j and k and enter the total on line l.

If you made no entry on line k, enter the amount from line j on line l.

Line m - Itemized deduction adjustment

Enter the amount of your itemized deduction adjustment. If Form IT-201, line 33 is:

$100,000 or less, leave line m blank and go to line n;
more than $100,000 but not more than $475,000, fill in Worksheet 3 below;
more than $475,000 but not more than $525,000, fill in Worksheet 4 below; or
more than $525,000, enter 50% (.50) of line l on line m.

Worksheet 3
1. New York adjusted gross income from Form IT-201, line 33................................................	1.________
2. Filing status 1 or 3 enter $100,000 or filing status 4. enter $150,000, or filing status 2 or5 enter $200,000.................	2.________
3. Subtract line 2 from line 1. (If line 2 is more than line 1, leave line m on Form IT-201 itemized deduction worksheet blank. Do not continue with this worksheet.) ............................................	3.________
4. Enter the lesser of line 3 or $50,000.......................	4.________
5. Divide line 4 by $50,000 and round to the fourth decimal place..........................................	5.________
6. Enter 25% (.25) of Form IT-201 itemized deduction worksheet, line l......................................	6.________
7. Multiply line 5 by line 6............................................	7.________
Transfer this amount to Form IT-201 itemized deduction worksheet, line m.

Worksheet 4
1. Enter the excess of New York adjusted gross income over $475,000 (cannot exceed $50,000)....	1.________
2.Divide line 1 by $50,000 and round to the fourth decimal place................................................	2.________
3. Enter 25% (.25) of Form IT-201 itemized deduction worksheet, line l......................................	3.________
4. Multiply line 2 by line 3...........................................	4.________
5. Add lines 3 and 4....................................................	5.________
Transfer this amount to Form IT-201 itemized deduction worksheet, line m.

Line n

Subtract line m from line l.

If you made no entry on line m, enter the amount from line l on line n.

Line o- College tuition itemized deduction

Did you, your spouse, or your dependent(s) pay any college tuition expenses during 2007? If No, enter 0 and go to line p. If Yes, you may be eligible to claim either the college tuition itemized deduction or the college tuition credit. However, you cannot claim both.

Complete Form IT-272, Claim for College Tuition Credit or Itemized Deduction, to compute your college tuition itemized deduction. Attach Form IT-272 to your return.

Line 36 Dependent exemptions

Unlike on your federal return, you may not take personal exemptions for yourself and for your spouse on your New York State return.

Enter the number of your dependent exemptions from the Dependent exemption worksheet, line e, below.

If you do not have to file a federal return, enter on lines a, b, and d of the worksheet the number of exemptions that would be allowed for federal income tax purposes.

Dependent exemption worksheet
Check only one box:
____If you filed federal Form 1040EZ, enter 0 on line 36.
____If you filed federal Form 1040A or 1040, complete this worksheet.
a. Enter the number of exemptions claimed on federal Form 1040A or 1040, line 6d....................	a._________
b. See Line b instructions below...............................	b._________
c. Add lines a and b..................................................	c._________
d. Enter the total number of boxes checked on federal Form 1040A or 1040, line 6a and line 6b....	d._________
e. Subtract line d from line c. This is the number of your dependent exemptions to enter in the box(es) on Form IT-201, line 3 (see Example below)......	e._________
Line b instructions – If on your federal return you were entitled to claim a dependent as an exemption but chose not to, include that dependent on line b.
Example: If you were entitled to claim a dependent on your federal return but chose not to in order to allow your dependent to claim the federal education credit on his or her federal tax return, you may still claim him or her as a dependent on your New York return.

Lines 37 and 38 Taxable income

Subtract line 36 from line 35. The result is your taxable income. Enter this amount on both line 37 and line 38. If line 36 is more than line 35, leave line 37 and line 38 blank.

Step 6 - Tax computation

Line 39 New York State tax

Is line 33 (your New York AGI) $100,000 or less?

If Yes, find your New York State tax using the New York State Tax Table on pages 46 through 53, or if line 38 is $65,000 or more, use the New York State tax rate schedule on page 55. Enter the tax due on line 39.

If No, see Tax Computation - New York AGI of more than $100,000, on page 54.

Line 40 New York State household credit

If you marked the Yes box at item (C) on the front of Form IT-201, you do not qualify for this credit and should go to line 41. If you marked No, use the appropriate table (1, 2, or 3) below or on page 96 to determine the amount to enter on line 40.

Line 41 Resident credit

Did you have income from sources outside New York State and pay income tax to another state, a local government of another state, the District of Columbia, or to a province of Canada? If No, go to line 42.

If Yes, complete Form IT-112-R, New York State Resident Credit, and, if applicable, Form IT-112-C, New York State Resident Credit for Taxes Paid to a Province of Canada. Enter the total amount of resident credit on line 41 and attach either form or both forms to your return.

Line 42 Other New York State nonrefundable credits

See the credit charts on pages 6 through 9 for a listing of nonrefundable credits. If you are claiming any nonrefundable credits, complete the appropriate credit forms and Form IT-201-ATT. Transfer the amount of nonrefundable credits to line 42. You must attach the completed credit forms and Form IT-201-ATT to your return.

Line 45 Net other New York State taxes

See the Other credits and taxes chart on pages 111 and 112. If you are subject to any other taxes, complete the appropriate forms and Part 2 of Form IT-201-ATT. Transfer the total amount of net other New York State taxes to line 45. You must attach the completed forms and Form IT-201-ATT to your return.

Line 47 New York City resident tax (NYC residents only; part-year residents, see line 50.)

Caution: If you are married and filing a joint New York State return and only one of you was a resident of New York City for all of 2007, do not enter an amount here. See the instructions for line 51 on page 98.

Is line 38 (your New York taxable income) less than $65,000?

If Yes, find your New York City resident tax using the New York City Tax Table on pages 56 through 63. Enter the tax on line 47.

If No, find your New York City resident tax using the New York City tax rate schedule on page 64. Enter the tax on line 47.

Line 48 New York City household credit (NYC residents only)

If you marked the Yes box at item (C) on the front of Form IT-201, you do not qualify for this credit and should go to line 49.

If you marked No, use the appropriate table (4, 5, or 6) below to determine the amount to enter on line 48.

Line 50 Part-year New York City resident tax

If you were a New York City resident for only part of 2007, complete Form IT-360.1, Change of City Resident Status. Enter the tax amount on line 50 and attach Form IT-360.1 to your return. For more information see Form IT-360.1-I, Instructions for Form IT-360.1.

Line 51 Other New York City taxes

Enter the total amount of other New York City taxes from Form IT-201-ATT, Part 3, line 34.

Caution: If you are married and filing a joint New York State return and only one of you was a resident of New York City for all of 2007, compute on a separate sheet of paper the NYC resident tax on the New York State taxable income of the city resident as if you had filed separate federal returns reduced by the NYC household credit (if applicable). The spouse that was a part-year NYC resident in 2007 should compute his or her part-year NYC resident tax on Form IT-360.1. Transfer the combined tax amounts of both spouses from your separate sheet to line 51. Be sure to write the name and social security number of the city resident and Taxable income of New York City resident on that paper. Attach it to your return.

If one spouse was a resident of New York City and the other a nonresident for all of 2007, compute on a separate sheet of paper the NYC resident tax on the New York State taxable income of the city resident as if you had filed separate federal returns reduced by the NYC household credit (if applicable). Transfer the amount from your separate sheet to line 51. Be sure to write the name and social security number of the city resident and Taxable income of New York City resident on that paper. Attach it to your return. If you are self-employed and carry on a trade, business, or profession in New York City, you may also be required to file Form NYC-202, New York City Unincorporated Business Tax Return. Since New York State does not administer the NYC unincorporated business tax, do not file your Form NYC-202 with your state return.

Line 53 New York City nonrefundable credits

Can you claim either the NYC unincorporated business tax (UBT) credit or the New York City accumulation distribution credit? (See the charts on pages 6 through 9.) If No, go to line 54.

If Yes, complete Section C of Form IT-201-ATT and enter the amount from Form IT-201-ATT, line 10, on line 53.

Line 55 Yonkers resident income tax surcharge

Were you a full-year resident of Yonkers, and did you make an entry of more than 0 on line 46? If No, go to line 56.

If Yes, complete the Yonkers Worksheet below and enter the amount from line l.

Yonkers worksheet
a. Amount from line 46.........................................	a._________
b. Amount from Form IT-213, Claim for Empire State Child Credit, line 16, or line 17 if an amount is entered on line 17........	b._________
c. Amount from Form IT-214, Claim for Real Property Tax Credit, line 33.............................	c._________
d. Amount from Form IT-216, Claim for Child and Dependent Care Credit, line 14 (New York filing status . taxpayers, see instructions for Form IT-216)............................	d._________
e. Amount from Form IT-215, Claim for Earned Income Credit, line 16 (New York filing status . taxpayers transfer the amount from Form IT-215, line 17)...............................	e._________
f. Amount from Form IT-209, Claim for Noncustodial Parent New York State Earned Income Credit, line 32 or, if an amount is entered on line 42, the larger of line 32 or line 42..............................................................	f._________
g. If you elected to claim the college tuition credit, the amount from Form IT-272, Claim for College Tuition Credit or Itemized Deduction, line 5 or 7, whichever applies........	g._________
h. Amount from Form IT-201-ATT, Other Tax Credits and Taxes, line 13...............................	h._________
i. Add lines b through h.......................................	i._________
j. Subtract line i from line a................................	j._________
k. Yonkers resident tax rate (10%).......................	k._______.1
l. Multiply line i by line k. Enter this amount on Form IT-201, line 55....................................	l._________

If you are filing jointly (filing status .) and only one spouse was a Yonkers resident for all of 2007, compute on a separate sheet of paper the Yonkers resident income tax surcharge on the New York State tax of the Yonkers resident as if you had filed separate federal returns. Enter the amount computed on line 55. Be sure to write the name and social security number of the Yonkers resident and Yonkers resident income tax surcharge on that paper, and attach it to your return.

Line 56 Yonkers nonresident earnings tax

If you were not a resident of Yonkers, did you earn wages or conduct a trade or business there either as an individual or as a member of a partnership? If No, go to line 57.

If Yes, complete Form Y-203, Yonkers Nonresident Earnings Tax Return. Enter the amount of tax on line 56 and attach Form Y-203 to your return.

Line 57 Part-year Yonkers resident income tax surcharge

If you were a resident of Yonkers for only part of 2007, complete Form IT-360.1, Change of City Resident Status. Enter the tax amount on line 57 and attach Form IT-360.1 to your return.

Line 59 Sales or use tax

See pages 66 through 72 for information on New York State and local sales or use tax, and how to calculate sales or use tax due.

If you do not owe any New York State or local sales or use tax, you must enter 0 on line 59. Do not leave line 59 blank. Then continue with the instructions for line 60.

Step 7 - Voluntary contributions

Line 60 (60a through 60g)

You may make voluntary contributions to the funds listed below. Enter the whole dollar amount (no cents, please) of your contribution(s) in the amount boxes (lines 60a through 60g). Enter the total amount of all your contributions combined on line 60.

Your contribution(s) will reduce your refund or increase your tax payment. You cannot change the amount(s) you give after you file your return.

Return a Gift to Wildlife - Your contribution will benefit New York's fish, wildlife, and marine resources, and you will receive a free issue of Conservationist magazine. For more information about New York State's environmental conservation programs go to www.dec.state.ny.gov. For information about Conservationist, go to www.TheConservationist.org.
Missing and Exploited Children Clearinghouse (MECC) Fund - (Missing / Exploited Children Fund) - Each year over 20,000 children are reported missing in New York State. Your contribution will benefit the New York State Missing and Exploited Children Clearinghouse. This organization works with police agencies and parents to locate missing children and to promote child safety through education. Contributions are used to distribute educational materials, disseminate missing child alerts, and conduct investigative training for police officers. For additional information about services and free safety publications visit www.criminaljustice.state.ny.us or call 1 800 FIND-KID (346-3543). Also see Publication 40, Missing Children and Young Adults.
Breast Cancer Research and Education Fund (Breast Cancer Research Fund) - Your contributions to the Breast Cancer Research and Education Fund have supported ground-breaking research projects in New York State. More dollars will support more studies that bring us closer to the cures and prevention of breast cancer. Help make breast cancer a disease of the past. Your contribution will be used to fund important biomedical research studies and education projects. New York State will match your contribution to the Breast Cancer Research and Education Fund, dollar for dollar.
Alzheimer's Disease Fund (Alzheimer's Fund) - Contributions to this fund support services provided by the Alzheimer's Disease Program administered by the New York State Department of Heath. This program is designed to provide education, counseling, respite, support groups, and other supportive services to people with Alzheimer's disease, their families, caregivers, and health care professionals.
United States Olympic Committee / Lake Placid Olympic Training Center (Olympic Fund) - Contributions to this fund help support the Olympic Training Center in Lake Placid. The $16 million complex is one of just three U.S. Olympic training centers in the United States. The center is used primarily by U.S. athletes who are training to compete in future winter and summer Olympic and Paralympic sports. Individual contributions must be $2. If you are married filing jointly and your spouse also wants to contribute, enter $4.
Prostate Cancer Research, Detection, and Education Fund (Prostate Cancer Research Fund) - Your contribution will benefit the New York State Coalition to Cure Prostate Cancer. The coalition coordinates and manages prostate cancer research, detection, and education efforts in our state. New York State will match your contribution to the Prostate Cancer Research, Detection, and Education Fund, dollar for dollar.
World Trade Center Memorial Foundation Fund (WTC Memorial Fund) - Your contribution to the World Trade Center Memorial Foundation Fund will help create the Memorial and Memorial Museum which will commemorate and honor the thousands of people who died in the attacks of September 11, 2001, and February 26, 1993. The Memorial will recognize the endurance of those who survived, the courage of those who risked their lives to save others, and the compassion of all who supported us in our darkest hours. Help New York State, the nation, and the world remember by making a contribution. For more information go to www.buildthememorial.org.

Step 8 - Payments and refundable credits

Line 63 Empire State child credit

Did you claim the federal child tax credit for 2007 or do you have a qualifying child (a qualifying child is a child who qualifies for the federal child tax credit and is at least four years of age)?

If No, you do not qualify for this credit. Go to line 64.

If Yes, review the instructions for Form IT-213 to see if you qualify for this credit. If you qualify, complete Form IT-213 and transfer the amount from Form IT-213 to Form IT-201, line 63. Attach Form IT-213 to your return.

For more information, see the instructions for Form IT-213.

Line 64 NYS / NYC child and dependent care credit

Did you qualify to claim the federal child and dependent care credit for 2007 (whether or not you actually claimed it)?

If No, you do not qualify for this credit. Go to line 65.

If Yes, complete Form IT-216, Claim for Child and Dependent Care Credit, to determine your New York State child and dependent care credit.

New for 2007 : If you are a New York City (NYC) resident with federal AGI (Form IT-201, line 19) of $30,000 or less, and you have a qualifying child under four years of age as of December 31, 2007, review the instructions for Form IT-216 to see if you qualify to claim the new NYC child and dependent care credit.

Transfer the amount from Form IT-216 to Form IT-201, line 64. Attach Form IT-216 to your return.

For more information, see the instructions for Form IT-216.

Line 65 New York State earned income credit (NYS EIC)

Did you claim the federal earned income credit for 2007 on your federal income tax return?

If No, you do not qualify for this credit. Go to line 66.

If Yes, complete Form IT-215, Claim for Earned Income Credit, and transfer the amount from Form IT-215 to Form IT-201, line 65. Attach Form IT-215 to your return. For more information, see the instructions for Form IT-215.

Caution : If you are a noncustodial parent and have paid child support through a support collection unit, you may be eligible for the noncustodial parent New York State earned income credit (noncustodial EIC). However, you cannot claim both the NYS EIC and the noncustodial EIC. Review the instructions for Form IT-209, Claim for Noncustodial Parent New York State Earned Income Credit, to see if you qualify for this credit. If you qualify, complete Form IT-209 to determine which credit offers the better tax savings. If you are claiming the NYS EIC, transfer the NYS EIC from Form IT-209 to Form IT-201, line 65, and attach Form IT-209 to your return (do not attach Form IT-215). If you are claiming the noncustodial EIC, see line 66 instructions below.

If the IRS is computing your federal earned income credit, write EIC in the white area to the left of the money column, and leave the money column blank on line 65. You must complete Form IT-201, lines 67 through 75, but do not complete lines 76 through 80.

Complete Form IT-215, lines 1 through 9, and attach it to your return. The Tax Department will compute your New York State earned income credit and the resulting refund or amount due.

If you are due a refund, we will send you the refund along with an explanatory statement. If you owe tax, you will receive a bill that must be paid within 21 days, or by April 15, 2008, whichever is later.

Line 66 Noncustodial parent New York State earned income credit (EIC)

Review the instructions for Form IT-209, Claim for Noncustodial Parent New York State Earned Income Credit, to see if you qualify for this credit. If you qualify, complete Form IT-209. If you are claiming the noncustodial EIC, transfer the noncustodial EIC from Form IT-209 to Form IT-201, line 66. If you are claiming the NYS EIC, transfer the NYS EIC from Form IT-209 to Form IT-201, line 65. Attach Form IT-209 to your return (do not attach Form IT-215).

For more information, see the instructions for Form IT-209.

Line 67 Real property tax credit

Review the instructions for Form IT-214, Claim for Real Property Tax Credit for Homeowners and Renters, to see if you qualify for this credit. If you qualify, complete Form IT-214 and transfer the amount from Form IT-214 to Form IT-201, line 67. Attach Form IT-214 to your return.

Line 68 College tuition credit

Did you or your spouse or your dependent(s) pay college tuition expenses during 2007?

If No, you do not qualify for this credit. Go to line 69.

If Yes, and you did not claim the college tuition deduction on line o of the itemized deduction worksheet (see page 94), complete Form IT-272, Claim for College Tuition Credit or Itemized Deduction, and transfer the amount from Form IT-272 to Form IT-201, line 68. Attach Form IT-272 to your return.

For more information, see the instructions for Form IT-272.

Line 69 New York City school tax credit (NYC residents only)

If you marked the Yes box at item C on the front of Form IT-201, you do not qualify for this credit. Go to line 70.

If you marked No at item C and you are filing status 1, 3, 4, or 5., compute your credit using Table 1 below if you were a full-year city resident or Table 2 below if you were a partyear city resident.

If you are filing status2, compute your credit using Table 1 if both spouses were full-year city residents. If both spouses were part-year city residents, find your part-year NYC school tax credit using filing status 2 and Table 2. If both spouses do not have the same city resident period, compute the credit using the spouse with the longer city resident period.

Example 1: You were a 5-month New York City resident and your spouse was an 8-month New York City resident. Your income* was less than $250,000, and you marked filing status 2, married filing joint return. You are entitled to a credit of $193.33 (using the 8-month period from Table 2).

Married taxpayers (filing status 3) – If you are computing your NYC tax separately, you must determine your NYC school tax credit using filing status 2. If one spouse is a city resident and the other is a city nonresident for the entire year, and you are computing your NYC tax as married filing separately, then determine the NYC school tax credit for the city resident spouse using Table 1 and filing status 3. The nonresident spouse is not entitled to a credit.

If one spouse is a resident and the other is a nonresident but you elect to compute your NYC tax as if both were residents for the entire year, determine your credit using Table 1 and filing status 2.

If one spouse is a city resident and the other is a partyear city resident, and you are computing your NYC tax as married filing separately, you must compute your credit separately. Use the New York City school tax credit worksheet on page 102 and Table 1, filing status 3, for the resident spouse. Use the worksheet on page 102 and Table 2, filing status 3, for the part-year resident spouse.

Example 2 - Full-year resident and a part-year resident spouse: You and your spouse are filing a joint New York State income tax return (filing status 2). You were a resident of New York City for the entire 2007 tax year. Your spouse was a New York City resident for only 3 months during the year, and your income* was less than $250,000. Add your credit amount from Table 1 below using filing status 3 ($145), and your spouse's credit amount from Table 2 using filing status . ($36.25) for a combined credit of $181.25.

If one spouse was a New York City part-year resident and the other spouse was a city nonresident for the entire year, determine the part-year resident's credit using Table 2 and filing status 3 and enter the result on line 69. The nonresident spouse may not take a credit.

Line 70 New York City earned income credit (NYC residents only)

Did you claim the federal earned income credit for 2007 on your federal return?

If No, you do not qualify to claim this credit. Go to line 71.

If Yes, complete either Form IT-215, Claim for Earned Income Credit, or Form IT-209, Claim for Noncustodial Parent New York State Earned Income Credit. Transfer the amount from Form IT-215 or the amount from Form IT-209 to Form IT-201, line 70. Attach Form IT-215 or Form IT-209 to your return.

For more information, see the instructions for Form IT-215 or Form IT-209.

If the IRS is computing your federal earned income credit, write EIC in the white area to the left of the money column, and leave the money column blank on line 70. You must complete Form IT-201, lines 71 through 75, but do not complete lines 76 through 80. The Tax Department will compute your New York City earned income credit and the resulting refund or amount due.

Line 71 Other refundable credits

Enter the total amount of other refundable credits from Form IT-201-ATT, Part 1, Section D, line 18. See the credit charts on pages 6 through 9 for a listing of credits that can be refunded.

Lines 72, 73, and 74 Total New York State, New York City, and Yonkers tax withheld

If you received any federal Form(s) W-2, Wage and Tax Statement, you must complete Form(s) IT-2, Summary of Federal Form W-2 Statements. In addition, if you received foreign income but did not receive a federal Form W-2, you must complete Form IT-2. If you had New York State, New York City, or Yonkers tax withheld from annuities, pensions, retirement pay or IRA payments, you must complete Form(s) IT-1099-R, Summary of Federal Form 1099-R Statements.

Enter on the appropriate line your total New York State, New York City, and Yonkers tax withheld from:

Form(s) IT-2;
Form(s) IT-1099-R; and
New York State lottery distributions.

Attach Form(s) IT-2 and Form(s) IT-1099-R to page 4 of your Form IT-201. If you had any NYS lottery distributions, attach federal Form W-2G as well. Do not attach federal Form W-2 or Form 1099-R to your return. Keep copies of your Form(s) IT-2, IT-1099-R, and W-2 for your records.

Caition: Check your withholding for 2008 - If, after completing your 2007 tax return, you want to change the amount of tax withheld from your paycheck, complete Form IT-2104, Employee's Withholding Allowance Certificate, and give it to your employer.

Line 75 Total estimated tax payments and amount paid with Form IT-370

Enter the total of:

Your 2007 estimated income tax payments for New York State, New York City, and Yonkers (include your last installment even if paid in 2008). If you marked filing status . but made separate 2007 estimated income tax payments (Form IT-2105), enter your combined total estimated income tax paid;
Any amount of overpayment from your 2006 return that you applied to your 2007 estimated income tax (if this amount was adjusted by the Tax Department, use the adjusted amount); and
Any amount you paid with Form IT-370, Application for Automatic Six-Month Extension of Time to File for Individuals. If you marked filing status . but you and your spouse filed separate Forms IT-370, enter the total amount you and your spouse paid.

Do not include any amounts you paid for the New York City unincorporated business tax. File Form NYC-202, New York City Unincorporated Business Tax Return, directly with the New York City Department of Finance.

You can check your balance and reconcile your estimated income tax account by going to www.nystax.gov and clicking on Online Tax Center, or by writing us at:

NYS TAX DEPARTMENT
ESTIMATED TAX UNIT
W A HARRIMAN CAMPUS
ALBANY NY 12227

If you are a beneficiary of an estate or trust and are claiming your portion of any payment of estimated income taxes allocated to you by the estate or trust, include your amount on line 75 and attach a copy of the notification issued by the estate or trust to the front of your return. This notification must include the name and identifying number of the estate or trust and the amount allocated to you.

Step 9 - Calculate your refund or the amount you owe

Line 77 Amount overpaid

If you have to pay an estimated income tax penalty (see line 81 instructions on page 104), subtract the penalty from the overpayment and enter the net overpayment on line 77.

Your net overpayment can be:

refunded to you (enter amount on line 78);
deposited directly into your bank account (enter amount on line 78 and see the instructions for line 82 on page 105);
applied to your 2008 estimated income tax (enter on line 59); or
divided between options 1 and 3, or 2 and 3.

If your estimated income tax penalty on line 81 is greater than your overpayment on line 77, enter the difference on line 80.

Line 78 Your refund

Enter the amount of overpayment that you want refunded to you. If you want a fast direct deposit, you must supply the information requested on line 82.

You must file a return to get a refund. The Tax Department will not refund an amount of one dollar or less unless you attach a signed request to your return.

Collection of debts from your refund - We will keep all or part of your overpayment (refund) if you owe a New York State tax liability or a New York City or Yonkers personal income tax liability, if you owe past-due support or a past-due legally enforceable debt to the IRS, to a New York State agency, or to another state, if you defaulted on a guaranteed student, state university, or city university loan, or if you owe a New York City tax warrant judgment debt. We will refund any amount that exceeds your debt.

A New York State agency includes any state department, board, bureau, division, commission, committee, public authority, public benefit corporation, council, office, or other entity performing a governmental or proprietary function for the state or a social services district.

If you have questions about whether you owe a past-due legally enforceable debt to the IRS, to another state, or to a New York State agency, contact the IRS, the other state, or the New York State agency.

For New York State tax liabilities or New York City or Yonkers personal income tax liabilities, call 1 800 835-3554 (from areas outside the U.S. and outside Canada, call (518) 485-6800) or write to: NYS Tax Department, Tax Compliance Division, W A Harriman Campus, Albany NY 12227.

For information relating to a New York City tax warrant judgment debt, call (212) 232-3550.

Disclaiming of spouse's debt - If you marked filing status . and you do not want to apply your part of the overpayment to your spouse's debt because you are not liable for it, complete Form IT-280, Nonobligated Spouse Allocation, and attach it to your original return. We need the information on Form IT-280 to process your refund as quickly as possible. You cannot file an amended return to disclaim your spouse's debt after you have filed your original return.

We will notify you if we keep your overpayment because of a past-due legally enforceable debt to the IRS or a tax debt to another state. You cannot use Form IT-280 to disclaim liability for a legally enforceable debt to the IRS or to disclaim a tax liability owed to another state. You must contact the IRS or the other state to resolve your responsibility for the asserted liability.

Line 79 Estimated tax

Enter the amount of overpayment from line 77 that you want applied to your New York State, New York City, and Yonkers estimated income tax for 2008. The total of lines 78 and 79 should equal the amount on line 77.

If you choose to apply all or part of your overpayment to your 2008 estimated income tax, you generally cannot change that decision after April 15, 2008.

Line 80 Amount you owe

Enter on line 80 the amount of tax you owe plus any estimated income tax penalty you owe (see line 81 instructions).

To avoid other penalties and interest, pay any tax you owe by April 15, 2008.

For additional information on penalties and interest, see Publication 80, General Income Tax Information for New York State Residents.

Line 81 Estimated tax penalty

Begin with these steps to determine if you may owe an estimated income tax penalty.

Locate the amount of your 2006 New York AGI as shown on your 2006 return;
Locate the amount of your 2006 New York income tax; then
Calculate the amount of your 2007 prepayments (the amount of withholding and estimated tax payments you have already made for 2007).

In general, you are not subject to a penalty if your 2007 prepayments equal at least 100% of your 2006 income tax. However:

If your 2006 New York AGI was more than $150,000 (or $75,000 if you are married filing separately) and you are not a farmer or a fisherman, your prepayments must equal at least 110% of your 2006 income tax based on a 12 month return;
You may owe a penalty if line 80 is $300 or more and represents more than 10% of the income tax shown on your 2007 return; and
You may owe a penalty if you underpaid your estimated income tax liability for any payment period.

For more information, see Form IT-2105.9, Underpayment of Estimated Income Tax by Individuals and Fiduciaries.

If you owe an estimated income tax penalty, enter the penalty amount on line 81. Also add the same amount to any tax due and enter the total on line 80. It is possible for you to owe an estimated income tax penalty and also be due a refund. In that case, subtract the estimated income tax penalty amount from the overpayment and enter the net result on line 77. Do not include any other penalty or interest amounts on line 77. Be sure to attach Form IT-2105.9 to your return.

Payment options

By check or money order - If you owe more than one dollar, include full payment with your return. Make check or money order payable to New York State Income Tax and write your social security number and 2007 Income Tax on it. Do not send cash.

By credit card - You can use your American Express Cards7, Discover7/ Novus7, MasterCard7, or Visa7 to pay the amount you owe on your 2007 New York State income tax return. You can pay your income taxes due with your return by credit card through the Internet. The credit card service provider will charge you a convenience fee to cover the cost of this service, and you will be told the amount before you confirm the credit card payment. Please note that the convenience fee, terms, and conditions may vary between the credit card service providers. These are the same credit card service providers that have agreements with the IRS to process income tax payments.

You can make your payment by credit card regardless of how you file your income tax return. For returns filed before the due date, you can make credit card payments any time up to the due date. For returns filed on or after the due date, you should make your credit card payment at the same time you file your return. Credit cards cannot be used to pay any tax due on an amended return.

You can pay your income taxes due with your return using either of the two credit card service providers listed below.

Official Payments Corp. - Visit their Web site at: www.officialpayments.com

Link2Gov Corporation - Visit their Web site at: www.nytaxpayment.com

You can also connect to either of these Web sites by going to the Tax Department's Web site at www.nystax.gov and clicking on Online Tax Center.

Follow the simple instructions to enter personal identifying information, the credit card number and expiration date, and the amount of the payment (line 80 of Form IT-201). Have a copy of your completed New York State income tax return available. You will be told the amount of the convenience fee that the credit card service provider will charge you to cover the cost of this service. At this point you may elect to accept or cancel the credit card transaction.

If you accept the credit card transaction you will be given a confirmation number. Please keep this confirmation number as proof of payment.

For additional information go to www.nystax.gov and click on Online Tax Center.

By automatic bank withdrawal - You may authorize the Tax Department to make an electronic funds withdrawal from your bank account.

File now/Pay later! You must specify a future payment date up to and including April 15, 2008. If you file before April 15, money will not be withdrawn from your account before the date you specify. To avoid interest and penalties, you must authorize a withdrawal on or before the filing deadline. If you designate a weekend or a bank holiday, the payment will be withdrawn the next business day. See line 82 instructions on page 105.

Unable to pay?

To avoid interest and penalty charges, you must file and pay the amount due by April 15, 2008.

If you cannot pay in full, you should file your return on time, and pay as much of the tax due as possible by check, money order, or automatic bank withdrawal. Also consider alternative payment methods such as a commercial or private loan or a credit card transaction to pay any remaining balance.

You will be billed for any unpaid tax plus interest (see Amount you owe on page 104). Pay the bill immediately if you can; if you cannot, call the number provided on the bill to make other arrangements. If you fail to pay the amount due, New York State may file a tax warrant, seize your assets, and/or garnishee your wages to ensure payment.

Line 82 Account information

Are you requesting direct deposit of your refund to, or automatic withdrawal of your taxes from, your bank account?

If No, go to Step 10.

If Yes, you must mark the appropriate box at line 82 and supply the information requested for lines 82a, b, and c.

The following requirements apply to both direct deposit and electronic funds withdrawal:

Enter your bank's 9-digit routing number on line 82a. If the first two digits are not 01 through 12, or 21 through 32, the transaction will be rejected. On the sample check below, the routing number is 090090099.

If your check states that it is payable through a bank different from the one where you have your checking account, do not use the routing number on that check. Instead, contact your bank for the correct routing number to enter on line 82a.

Enter your account number on line 82b. The number can be up to 17 characters (both numbers and letters). Include hyphens (-) but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank.

On line 56c, mark an X in the box for the type of account, checking or savings.

If you mark Checking, enter the account number shown on your checks. (On the sample check below, the account number is 1357902468. Do not include the check number.)
If you mark Savings, you can get your savings account number from a preprinted savings account deposit slip, your passbook or other bank records, or from your bank.

If you encounter any problem with direct deposit to, or electronic withdrawal from, your account, call toll free 1 800 225-5829. Please allow six to eight weeks for processing your return.

Refund - Direct deposit

Mark an X in the box for Refund on line 82.

The Tax Department will not notify you that your refund has been deposited. However, if the amount we deposit is different from the amount of refund you claimed, we will send you a written explanation of the adjustment within two weeks from the date your refund is deposited.

We will make every effort to comply with your request for direct deposit. However, we cannot be responsible when a bank refuses a direct deposit. Some banks, for example, do not allow a joint refund to be deposited into an individual account. You can contact your bank to confirm routing and account numbers and to make sure that it will accept your deposit. If we cannot make the direct deposit for any reason, we will send a check to the mailing address on your return.

Owe – Electronic funds withdrawal

Mark an X in the box for Owe on line 82 and enter the date you want the Tax Department to make an electronic funds withdrawal from your bank account.

The Tax Department will only use electronic funds withdrawal for the one tax payment you have authorized. Your confirmation will be your bank statement that includes a NYS Tax Payment line item. If we determine that the amount you owe is different from the amount claimed on your return, we will only withdraw less than or equal to the amount you have claimed. We will send you a bill for any additional amount owed, which may include penalty and interest.

If your bank returns your electronic funds withdrawal (due to insufficient funds, incorrect bank account information, closed accounts, etc.), the Tax Department will send a notification letter to the mailing address on your return. You will need to submit a check or money order to the address on the notification, or you may elect to pay by credit card.

We will make every effort to comply with your request for electronic funds withdrawal. However, we cannot be responsible when a bank refuses an electronic funds withdrawal. You can contact your bank to confirm routing and account numbers and to make sure that it will accept the withdrawal.

If for any reason we cannot comply with your request for electronic funds withdrawal, we will send a notice to the mailing address on your return.

Caution: If you complete the entries for electronic funds withdrawal, do not send a check or money order for the same amount due unless you receive a notice.

Step 10 - Sign and date your return

Part A Third-party designee

Do you want to authorize a friend, family member, or any other person (third-party designee) to discuss your 2007 tax return with the New York State Tax Department?

If No, mark an X in the No box and go to Part B.

If Yes, mark an X in the Yes box. Enter the designee's name, phone number, and any five numbers the designee chooses as his or her personal identification number (PIN). If you want to authorize the paid preparer who signed your return to discuss it with the Tax Department, just enter Preparer and the preparer's phone number in the spaces for the designee's name and phone number (you do not have to provide a PIN).

If you mark the Yes box, you (and your spouse, if filing a joint return) are authorizing the Tax Department to discuss with the designee any questions that arise during the processing of your return. You are also authorizing the designee to:

give the Tax Department any information that is missing from your return;
call the Tax Department for information about the processing of your return or the status of your refund or payment(s); and
respond to certain Tax Department notices that you share with the designee about math errors, offsets, and return preparation. We will not send notices to the designee.

You are not authorizing the designee to receive your refund check, bind you to anything (including any additional tax liability), or otherwise represent you before the Tax Department. If you want the designee to perform those services for you, you must file Form POA-1, Power of Attorney. Copies of statutory tax notices or documents (such as a Notice of Deficiency) will only be sent to your designee if you file Form POA-1.

The authorization will end automatically on the due date (without regard to extensions) for filing your 2008 tax return. For most taxpayers, the due date will be April 15, 2009.

Part B Paid preparer's signature

Did you pay someone to prepare your return?

If No, go to Part C.

If Yes, the paid preparer must also sign it and fill in the other blanks in the paid preparer's area of your return. A person who prepares your return and does not charge you should not fill in the paid preparer's area.

Note to paid preparers – When signing a taxpayer's New York State income tax return, you must enter the same identification number that you used on the taxpayer's federal income tax return. If you did not prepare a federal income tax return for the taxpayer, you must use your PTIN if you have one; otherwise, use your social security number. For additional information, see Publication 58, Information for Income Tax Return Preparers.

Part C Your signature(s)

In the spaces provided at the bottom of the back page, sign and date your original return and enter your occupation. If you are married and filing a joint return, also enter your spouse's occupation. Both spouses must sign a joint return; we cannot process unsigned returns. Keep your signature(s) within the space(s) provided.

If the return is for someone who died and there is no surviving spouse to sign it, print or type the name and address of the person signing it below the signature. For additional information about deceased taxpayers, see page 39.

Daytime phone number - This entry will enable the Tax Department to correct minor errors or omissions by calling you rather than writing or sending back your return.

Step 11 - Finish your return

Take a moment to go over the checklist on page 36 to avoid common errors that may delay your refund. Then finish your return as shown below in Parts 1 through 7.

Part 1 - Once you have completed and reviewed the return, attach your peel-off name and address label, if you have one, making any necessary corrections to the information. See Step 1 if you have a question.

Part 2 - Staple payments, if any, to the front of your Form IT-201 where indicated.

Part 3 - Staple Form(s) IT-2 (and IT-1099-R ans federal w-2G if applicable) to page 4 of your Form IT-201.

Part 4 - Staple any other forms including IT-201 ATT and any correspondence and computation sheets of paper behind your Form(s) IT-2 or IT-1099-R, face up.

Part 5 - Two-dimensional (2D) barcode cover sheet. If your software package or preparer prints a 2D barcode cover sheet as page one of your Form IT-201, place the cover sheet face up, on the top of the front page of Form IT-201, and staple the entire return at the top of the cover sheet. Staple payments, if any, to the front of the 2D barcode cover sheet where indicated. If you need to change and reprint your return, also be sure to reprint the 2D barcode cover sheet.

Please note: Do not write, print, or photocopy anything on the back of the 2D barcode cover sheet.

Part 6 - Make a copy of your return and any other attached forms or papers for your records. You may be asked by the Tax Department to provide copies of these records after you have filed your income tax return.

Part 7 - Use the envelope provided or address an envelope to send your original return to the following address:

STATE PROCESSING CENTER PO
BOX 61000
ALBANY NY 12261-0001

Mail your return by April 15, 2008.

If you choose, you may use a private delivery service, instead of the U.S. Postal Service, to file your return (see page 41).

Important reminder to file a complete return

You must complete all required schedules and forms that make up your return, and include all pages of those forms and schedules when you file. Attach only those forms and schedules that apply to your return, and be sure that you have made all required entries. Returns that are missing required pages or that have pages with missing entries are considered incomplete and cannot be processed, and may subject taxpayers to penalty and interest.

Additional information

The information on pages 38 through 72 is for use in completing either the short Form IT-150 or the long Form IT-201.

Definitions used to determine resident, nonresident, or part-year resident

You may have to pay income tax as a New York State resident even if you are not considered a resident for other purposes. For income tax purposes, your resident status depends on where you were domiciled and where you maintained a permanent place of abode during the taxable year.

Domicile

In general, your domicile is the place you intend to have as your permanent home. Your domicile is, in effect, where your permanent home is located. It is the place you intend to return to after being away (as on vacation abroad, business assignment, educational leave, or military assignment).

You can have only one domicile. Your New York domicile does not change until you can demonstrate that you have abandoned your New York domicile and established a new permanent domicile outside New York State.

A change of domicile must be clear and convincing. Easily controlled factors such as where you vote, where your driver's license and registration are issued, or where your will is located are not primary factors in establishing domicile. To determine whether you have, in fact, changed your domicile, you should compare (1) the size, value, and nature of use of your first residence to the size, value, and nature of use of your newly acquired residence; (2) your employment and/or business connections in both locations; (3) the amount of time spent in both locations; (4) the physical location of items that have significant sentimental value to you in both locations; and (5) your close family ties in both locations. A change of domicile is clear and convincing only when your primary ties are clearly greater in the new location. When weighing your primary ties, keep in mind that some may weigh more heavily than others, depending upon your overall lifestyle. If required by the Tax Department, it is the taxpayer's responsibility to produce documentation showing the necessary intention to effect a change of domicile.

If you move to a new location but intend to stay there only for a limited amount of time (no matter how long), your domicile does not change. For example, Mr. Green of ABC Electronics in Newburgh, New York, was temporarily assigned to the Atlanta, Georgia branch office for two years. After his stay in Atlanta, he returned to his job in New York. His domicile did not change during his stay in Georgia; it remained New York State.

If your domicile is in New York State and you go to a foreign country because of a business assignment by your employer, or for study, research or any other purpose, your domicile does not change unless you show that you definitely do not intend to return to New York.

Permanent place of abode

A permanent place of abode is a residence (a building or structure where a person can live) that you permanently maintain, whether you own it or not, and usually includes a residence your husband or wife owns or leases. A place of abode is not permanent if you maintain it only during a temporary or limited period of time for a particular purpose.

Resident

You are a New York State resident for income tax purposes if:

Your domicile is not New York State but you maintain a permanent place of abode in New York State for more than 11 months of the year and spend 184 days or more (a part of a day is a day for this purpose) in New York State during the taxable year. However, if you are a member of the armed forces, and your domicile is not New York State, you are not a resident under this definition; or
Your domicile is New York State. However, even if your domicile is New York, you are not a resident if you meet all three of the conditions in either Group A or Group B as follows:

Group A

You did not maintain any permanent place of abode in New York State during the taxable year; and

You maintained a permanent place of abode outside New York State during the entire taxable year; and

You spent 30 days or less (a part of a day is a day for this purpose) in New York State during the taxable year.

Group B

You were in a foreign country for at least 450 days during any period of 548 consecutive days; and

You spent 90 days or less (a part of a day is a day for this purpose) in New York State during this 548-day period, and your spouse (unless legally separated) or minor children spent 90 days or less (a part of a day is a day for this purpose) in New York during this 548-day period in a permanent place of abode maintained by you; and

During the nonresident portion of the taxable year in which the 548-day period begins, and during the nonresident portion of the taxable year in which the 548-day period ends, you were present in New York State for no more than the number of days which bears the same ratio to 90 as the number of days in such portion of the taxable year bears to 548. The following formula illustrates this condition:

Number of days in the nonresident portion / 548 × 90 = Maximum number of days allowed in New York State

Nonresident

You are a New York State nonresident if you were not a resident of New York State for any part of the year.

Part-year resident

You are a New York State part-year resident if you meet the definition of resident or nonresident for only part of the year.

New York City and Yonkers

For the definition of a New York City or Yonkers resident, nonresident, and part-year resident, see the definitions of a New York State resident, nonresident, and part-year resident above, and substitute New York City or Yonkers in place of New York State.

For more information on nonresidents and part-year residents, see the instructions for Form IT-203.

Special accruals

As a full-year New York State resident for 2007, or if you are a full-year New York City resident or New York City part-year resident for 2007, you may have to use special accrual rules (see below) to compute your New York State and New York City personal income tax for 2007.

If you are subject to the special accrual rules, you must file Form IT-201. You cannot file Form IT-150.

Full-year New York State residents - You are subject to the special accrual rules only if you have accrued income for 2007 (see below), and

you were a nonresident of New York State on December 31, 2006; or
you will be a New York State nonresident on January 1, 2008.

You have accrued income for 2007 if:

you have an item of non-New York source income* that was fixed and determinable in a tax year prior to 2007, but you are reporting that income for federal income tax purposes in tax year 2007; or
you have an item of income that was fixed and determinable in tax year 2007, but you will be reporting that income for federal income tax purposes in a tax year after 2007.

Full-year and part-year New York City residents - You are subject to the special accrual rules only if you have accrued income for 2007 (see below), and

you were a nonresident of New York City on December 31, 2006, but you were a full-year New York City resident for tax year 2007; or
you were a full-year New York City resident for 2007 but you will be a New York City nonresident on January 1, 2008; or
you were a New York City part-year resident for tax year 2007.

You have accrued income for 2007 if:

you have an item of non-New York source income* that was fixed and determinable in a tax year prior to 2007, but you are reporting that income for federal income tax purposes in tax year 2007; or
you have an item of income that was fixed and determinable in tax year 2007, but you will be reporting that income for federal income tax purposes in a tax year after 2007; or
you have an item of income that was fixed and determinable in your 2007 New York City resident period, but that income is not reportable for federal income tax purposes in your 2007 New York City resident period; or
you have an item of non-New York source income* that was fixed and determinable in your 2007 New York City nonresident period, but that income is not reportable for federal income tax purposes in your 2007 New York City nonresident period.

Special instructions for Form IT-150, line 30

Line 30 New York City resident tax

If one spouse was a resident of New York City for all of 2007 and the other a nonresident for all of 2007, compute on a separate sheet of paper the NYC resident tax on the New York State taxable income of the city resident as if you had filed separate federal returns reduced by the NYC household credit (if applicable). Transfer the amount from your separate sheet to line 30. Be sure to write the name and social security number of the city resident and Taxable income of New York City resident on that paper and attach it to your return.

Special instructions for Form IT-150, line 33

Line 33 Yonkers resident income tax surcharge

If one spouse was a resident of Yonkers for all of 2007 and the other a nonresident for all of 2007, compute on a separate sheet of paper the Yonkers resident income tax surcharge on the New York State tax of the Yonkers resident as if you had filed separate federal returns. Transfer the amount from your separate sheet to line 33. Be sure to write the name and social security number of the Yonkers resident and Yonkers resident income tax surcharge on that paper and attach it to your return.

Estates and trusts

Estates and trusts are subject to the New York State personal income tax. The fiduciary for an estate or trust must file Form IT-205, Fiduciary Income Tax Return. Each beneficiary of an estate or trust must include his or her share of the estate or trust income on Form IT-201. For more information on responsibilities of beneficiaries, see Beneficiaries (estates and trusts) on page 81.

Deceased taxpayers

If a taxpayer died after 2006 and before filing a return for 2007, the taxpayer's spouse or personal representative may have to file and sign a return for that taxpayer. A personal representative can be an executor, administrator or anyone who is in charge of the deceased taxpayer's property. If a taxpayer did not have to file a federal return but had New York State tax withheld, a New York return must be filed to get a refund. If a joint federal income tax return was filed for the deceased taxpayer and the surviving spouse, a joint New York State return can be filed on Form IT-150 or Form IT-201, depending on which federal form was filed. Write Filing as surviving spouse in the area where you sign the return. If someone else is the personal representative for the deceased spouse, he or she must also sign the return. The filing due date is the same as if the deceased taxpayer had lived. The person who files the return for the deceased taxpayer should write the deceased taxpayer's date of death in the area indicated near the top of the return.

Partnerships/limited liability partnerships or companies

Partnerships, limited liability partnerships (LLPs) and limited liability companies (LLCs), limited liability investment companies (LLICs) and limited liability trust companies (LLTCs) that are treated as partnerships for federal purposes are not subject to the New York State personal income tax, but individual members of the partnerships are.

If your partnership has a partner who is a New York State resident, or if the partnership has any income from New York State sources, it must file Form IT-204, Partnership Return. If your partnership carried on a business in New York City, it may also have to file Form NYC-204, City of New York Unincorporated Business Tax Partnership Return. Since New York State does not administer the New York City unincorporated business tax, do not file your NYC-204 with your state return.

Innocent spouse relief

There are three forms of innocent spouse relief: innocent spouse, separation of liability, and equitable relief. You may qualify for relief from full or partial tax liability on a joint return as an innocent spouse if: (1) there is an understatement of tax on a joint return because of an omission or error involving income, deduction, credit, or basis; (2) you can show that when you signed the return you did not know and had no reason to know of the understatement; and (3) taking into account all the facts and circumstances, it would be unfair to hold you liable for the understated tax. You may also request a separation of liability for any understated tax on a joint return if you and your spouse or former spouse are no longer married, or are legally separated, or have lived apart at all times during the 12-month period prior to the date of filing for relief. If you do not qualify as an innocent spouse or for separation of liability, you may qualify for equitable relief if you can show that, taking into account all the facts and circumstances, you should not be held liable for any understatement or underpayment of tax. For more information, see Form IT-285, Request for Innocent Spouse Relief (and Separation of Liability and Equitable Relief). You may use Form IT-285 only for innocent spouse relief under the three circumstances stated above. Do not file Form IT-285 with your return.

If you want to disclaim your spouse's defaulted guaranteed student, state university, or city university loan or past-due support or past-due legally enforceable debt owed to a New York State agency or a New York City tax warrant judgment debt because you do not want to apply your part of a joint refund or refundable credit to a debt owed solely by your spouse, use Form IT-280, Nonobligated Spouse Allocation. You must complete Form IT-280 and attach it to the back of your original return when filed. (Also see Disclaiming of spouse's debt on page 31 (Form IT-150) or page 103 (Form IT-201)).

Members of the armed forces

If you are a member of the military and a New York State resident, the amount of your military pay that is subject to federal income tax is also subject to New York income tax.

For more information, see Publication 361, New York State Income Tax Information for Military Personnel and Veterans.

Keep a copy of your tax records

Please remember to keep a copy of your completed income tax return. Also keep copies of any books, records, schedules, statements, or other related documents.

The Tax Department may ask you to provide copies of these records after you have filed your income tax returns.

You should retain copies of your return for at least seven years after you file your return.

Amending your return

File new Form IT-150-X to amend a previously filed New York State income tax return, Form IT-150, unless you are amending your return to report income or deductions that cannot be reported using Form IT-150. In this case you must file Form IT-201-X. File Form IT-201-X to amend a previously filed New York State income tax return, Form IT-201.

Use Form IT-203-X if you mistakenly filed Form IT-150 or Form IT-201, but you were a nonresident or part-year resident. See Other forms you may have to file on page 10.

Paid preparer information

For information relating to the signing of returns by a paid preparer (anyone you pay to prepare your return), e-file mandate for paid preparers, and other requirements relating to paid preparers, see Publication 58, Information for Income Tax Return Preparers.

How to get New York City forms

If you need to get tax forms and instructions from the NYC Department of Finance:

Online - Visit www.nyc.gov/finance

By fax - Call Finance's Tax Fax Service at (212) 504-4038 from the phone connected to your fax machine or modem (24 hours a day, 7 days a week).

By mail - Call Finance's Forms Ordering Service at (212) 504-4035 anytime to receive forms and instructions by mail.

For information on NYC business taxes, call Finance Customer Assistance at (212) 504-4036. For information on NYC property taxes call (212) 504-4080. Customer assistance representatives are available weekdays from 8:00 A.M. to 5:00 P.M. Automated services are also available 24 hours a day, seven days a week.

Statute of limitations

Generally, you must file a claim for a credit or refund of an overpayment of income tax within the later of three years from the time you filed the return or two years from the time you paid the tax. If you did not file a return, you must file the claim for a credit or refund within two years from the time you paid the tax.

Privacy notification

The Commissioner of Taxation and Finance may collect and maintain personal information pursuant to the New York State Tax Law, including but not limited to, sections 5-a, 171, 171-a, 287, 308, 429, 475, 505, 697, 1096, 1142, and 1415 of that Law; and may require disclosure of social security numbers pursuant to 42 USC 405(c)(2)(C)(i).

This information will be used to determine and administer tax liabilities and, when authorized by law, for certain tax offset and exchange of tax information programs as well as for any other lawful purpose.

Information concerning quarterly wages paid to employees is provided to certain state agencies for purposes of fraud prevention, support enforcement, evaluation of the effectiveness of certain employment and training programs and other purposes authorized by law.

Failure to provide the required information may subject you to civil or criminal penalties, or both, under the Tax Law.

This information is maintained by the Director of Records Management and Data Entry, NYS Tax Department, W A Harriman Campus, Albany NY 12227; telephone 1 800 225-5829. From areas outside the United States and outside Canada, call (518) 485-6800.

Private delivery services

If you choose, you may use a private delivery service, instead of the U.S. Postal Service, to mail in your return and tax payment. However, if, at a later date, you need to establish the date you filed your return or paid your tax, you cannot use the date recorded by a private delivery service unless you used a delivery service that has been designated by the U.S. Secretary of the Treasury or the Commissioner of Taxation and Finance. (Currently designated delivery services are listed in Publication 55, Designated Private Delivery Services. See Need help? on the back cover for information on obtaining forms and publications.) If you have used a designated private delivery service and need to establish the date you filed your return, contact that private delivery service for instructions on how to obtain written proof of the date your return was given to the delivery service for delivery. If you use any private delivery service, whether it is a designated service or not, send the forms covered by these instructions to: State Processing Center, 101 Enterprise Drive, Kingston NY 12401.

Information on paying sales and use taxes on your income tax return

Line 35 of Form IT-150, or line 59 of Form IT-201

Note: Use these instructions on pages 66 through 72 only to complete either line 35 of the short Form IT-150, or line 59 of the long Form IT-201.

When do you owe New York State and local sales or use tax?

When you make a purchase of taxable property or services from a seller (vendor) located in New York State and take delivery in New York State, the vendor should collect state and local sales or use tax due and forward it to the Tax Department. However, you are responsible for paying the tax directly to the Tax Department under the following three circumstances:

Deliveries into New York State - You owe state and local sales or use tax if you:

purchase property or a service that is delivered to you in New York State without payment of New York State and local tax to the seller, such as through the Internet, by catalog, from television shopping channels, or on an Indian reservation.

Purchases outside New York State with subsequent use in New York State - You may also owe state and local sales or use tax if you are a resident of New York State at the time you purchase any of the following outside New York State:

property you bring into New York State for use in New York State;
a service performed on property outside New York State, and you bring that property into New York State for use here; or
a service (such as an information service) you bring into New York State for use here.

(You may be eligible for a credit for sales or use tax paid to another state. See Instructions for Worksheets 1, 2, and 3, Column D, on page 70.)

However, you are not required to pay state or local sales or use tax on any property or service that you bring into New York State which you purchased outside of the state before you became a resident of New York State.

Additional local tax - You may owe an additional local tax if you are a resident of a locality (county or city) at the time of purchase and you:

bring property into that locality which you purchased in another locality in New York State that has a lower tax rate;
bring property into that locality on which you had a taxable service performed in another locality in New York State that has a lower tax rate; or
bring a service (such as an information service) into that locality which you purchased in another locality in New York State that has a lower tax rate.

However, you are not required to pay any additional local tax on any property or service that you bring into a locality in New York State that you purchased outside that locality before you became a resident of that locality.

Note: For purposes of these sales and use tax instructions, the word tax will be used to refer to either the sales tax or the use tax, or both.

Who is a New York State resident for sales and use tax purposes?

For sales and use tax purposes, the definition of resident includes persons who may not be considered residents for personal income tax purposes. For example, persons maintaining a permanent place of abode in New York who do not spend more than 183 days a year in the state, college students, and military personnel may all be residents for sales and use tax purposes even if they are not residents for income tax purposes. For sales and use tax purposes, an individual is a resident of the state and of any locality in which he or she maintains a permanent place of abode. A permanent place of abode is a dwelling place maintained by a person, or by another for that person to use, whether or not owned by such person, on other than a temporary or transient basis. The dwelling may be a home, apartment or flat; a room including a room at a hotel, motel, boarding house, or club; a room at a residence hall operated by an educational, charitable, or other institution; housing provided by the armed forces of the United States, whether the housing is located on or off a military base or reservation; or a trailer, mobile home, houseboat, or any other premises. This includes second homes. Therefore, you can be a resident of more than one locality and state for sales and use tax purposes.

An individual doing business in New York State is a resident for sales and use tax purposes of the state and of any county or city in which the individual is doing business, with respect to purchases of taxable property or services used in the business. Therefore, if an individual is engaged in business in New York State but has no permanent place of abode in New York State, the individual will owe use tax only on taxable purchases made with respect to the business operated in New York.

What tangible personal property and services are subject to sales and use taxes?

Most tangible personal property is subject to tax. Some examples are: cigarettes and other tobacco products; alcohol; candy; clothing; books; electronic equipment; furniture; collectibles (stamps, coins, etc., bought for collections); works of art; off-the-shelf computer software; and, generally, a garage sale item costing more than $600.

Some examples of tax exempt items are: prescription and nonprescription drugs and medicines used for humans; certain medical equipment and supplies used for humans; newspapers; periodicals; most food items; U.S. and New York State flags; Indian arts and crafts when purchased on an Indian reservation; used mobile homes; and college textbooks.

Only certain services are subject to tax. Taxable services include maintaining, servicing, and repairing tangible personal property (for example, auto and appliance repair) and real property such as land and buildings (for example, services such as house repairs, lawn maintenance, and interior decorating). Some examples of exempt services are dry cleaning, veterinary (except for grooming and boarding), legal, accounting, and medical services.

For more information on taxable and exempt goods and services, see Publication 750, A Guide to Sales Tax in New York State.

Reporting and paying sales and use taxes

You must report any unpaid sales or use tax owed for 2007 on your 2007 personal income tax return.

Note: Do not use Form IT-150 or Form IT-201 to report and pay sales and use taxes with respect to a business if you or the business is registered, or are required to be registered, for sales tax purposes. Report and pay sales and use taxes with respect to business purchases on the applicable sales and use tax return.

If you are requesting an extension of time to file your personal income tax return and you owe sales or use tax, you must pay any sales or use tax you owe at the time you request the extension. See Form IT-370 for more information.

If you receive an automatic extension of time to pay your New York State personal income tax (for example, you are in a foreign country), your sales or use tax is due when your New York State personal income tax is due.

You may report and pay your sales or use tax liability on your personal income tax return for:

your personal purchases;
purchases related to your royalty activities or rental real estate activities reported in Part I of federal Schedule E; and
purchases related to your Schedule C, C-EZ, or F business (not otherwise eligible for exemption) unless the business is, or is required to be, registered for sales tax purposes.

If you are married and file a joint return, you may include your spouse's sales or use tax liability for:

your spouse's purchases;
purchases related to your spouse's royalty activities or rental real estate activities reported in Part I of federal Schedule E; and
purchases related to your spouse's Schedule C, C-EZ, or F business (not otherwise eligible for exemption) unless the business is, or is required to be, registered for sales tax purposes.

If you are not filing an income tax return but owe sales or use tax for 2007, you must pay any unpaid sales or use tax by filing Form ST-140, Individual Purchaser's Annual Report of Sales and Use Tax, by April 15, 2008. However, if you or the business is registered or required to be registered for sales tax purposes, all sales and use taxes owed with respect to business purchases must be reported and paid with the periodic sales and use tax return.

At the time of registration, the New York State Department of Motor Vehicles (DMV) collects any unpaid sales or use tax on a motor vehicle, trailer, all-terrain vehicle, vessel, or snowmobile that must be registered or titled by DMV. Therefore, do not report or pay the sales or use tax on these items on your personal income tax return.

What happens if I don't pay the sales or use tax due?

Failure to pay sales or use tax may result in the imposition of penalty and interest. The Tax Department conducts both routine and special audits to promote compliance. In addition, the U.S. Customs Service provides the department with information from customs declarations filed by New York State residents returning from overseas travel. The Tax Department also obtains information on sales to New York State residents under information exchange agreements with other states.

Computing sales or use tax

To compute the amount of tax you owe, see How to calculate and report your sales and use tax liability.

If you do not owe any sales or use tax, you must enter 0 on the sales or use tax line of your personal income tax return.

For more information, see Publication 774, Purchaser's Obligations to Pay Sales and Use Taxes Directly to the Tax Department, Questions and Answers.

Instructions for Worksheets 1, 2, and 3

Column A - Purchase price

The tax is generally computed on the price you paid for an item or service, including any shipping or handling charges made by the seller. However, if you were a resident of New York State at the time of purchase and you purchased property outside New York State which you used outside the state for more than six months before you brought it into the state, compute the tax on the lower of the cost or fair market value of the property at the time you brought it into New York State. This may result in a lower amount of tax. The same six month rule applies for purposes of computing local tax.

Column B - Rate

The tax rate to use is determined as follows:

If the property or service is delivered to you in New York State, the tax is computed at the combined state and local rate in effect in the locality where the delivery occurs regardless of where you reside. The rate that applies is the rate in effect at the time of delivery.
If you are a New York State resident and you purchase property or services outside New York State which you bring into New York State to your jurisdiction of residence, tax is computed at the combined state and local rate in effect where you reside. The rate that applies is the rate in effect at the time you brought the property or service into that jurisdiction.

In addition, if you use the property or service in another locality in New York State, you owe tax to the second locality if you were also a resident of that locality at the time of the purchase, and its rate is higher than the rate in effect where the property was originally delivered to you in New York State or brought by you into New York State.

See Chart 1 or Chart 2 for a listing of rates through November 30, 2007. For rate changes effective December 1, 2007, visit our Web site at www.nystax.gov/pit/use_tax.htm or call the Tax Department. See Need help? on the back cover.

Column D - Tax paid to another taxing jurisdiction, if any

To determine whether the tax you paid to another state or local jurisdiction in another state qualifies for credit against New York State and local tax, see Publication 39, A Guide to New York State Reciprocal Credits for Sales Taxes Paid to Other States. If you bought the item or service in a locality in New York State other than where you reside, the tax you paid at the time of purchase may be claimed as a credit against the tax due in the locality where you reside. Federal excise taxes and customs duties, and taxes and fees you paid in foreign countries are not allowed as a credit against any New York State or local sales or use tax that you owe.

New York Tax Help Links