§ 78 — Limitations on credit or refund

§ 78. Limitations on credit or refund. 1. General.--Claim for credit\nor refund of an overpayment of tax under any of the named parts shall be\nfiled by the taxpayer within three years from the time the return was\nfiled or two years from the time the tax was paid, whichever of such\nperiods expires the later, or if no return was filed, within two years\nfrom the time the tax was paid. If the claim is filed within the three\nyear period, the amount of the credit or refund shall not exceed the\nportion of the tax paid within the three years immediately preceding the\nfiling of the claim plus the period of any extension of time for filing\nthe return. If the claim is not filed within the three year period, but\nis filed within the two year period, the amount of the credit or refund\nshall not exceed the portion of the tax paid during the two years\nimmediately preceding the filing of the claim. Except as otherwise\nprovided in this section, if no claim is filed, the amount of a credit\nor refund shall not exceed the amount which would be allowable if a\nclaim had been filed on the date the credit or refund is allowed. For\nspecial restriction in a proceeding on a claim for refund of tax paid\npursuant to an assessment made as a result of (a) a net operating loss\ncarryback, or (b) an increase or decrease in federal taxable income or\nfederal tax, or (c) a federal change or correction or renegotiation, or\ncomputation or recomputation of tax, which is treated in the same manner\nas if it were a deficiency for federal income tax purposes, see\nparagraph (g) of subdivision three of section seventy-four.\n 2. Extension of time by agreement.--If an agreement under the\nprovisions of paragraph (b) of subdivision three of section seventy-four\n(extending the period for assessment of tax) is made within the period\nprescribed in subdivision one for the filing of a claim for credit or\nrefund, the period for filing a claim for credit or refund, or for\nmaking credit or refund if no claim is filed, shall not expire prior to\nsix months after the expiration of the period within which an assessment\nmay be made pursuant to the agreement or any extension thereof. The\namount of such credit or refund shall not exceed the portion of the tax\npaid after the execution of the agreement and before the filing of the\nclaim or the making of the credit or refund, as the case may be, plus\nthe portion of the tax paid within the period which would be applicable\nunder subdivision one if a claim had been filed on the date the\nagreement was executed.\n 3. Notice of change or correction of fedearl income.--If a taxpayer is\nrequired by part two or part three of this title to file a report or\namended return in respect of (a) a decrease or increase in federal\ntaxable income or federal tax, or (b) a federal change or correction or\nrenegotiation, or computation or recomputation of tax, which is treated\nin the same manner as if it were an overpayment for federal income tax\npurposes, claim for credit or refund of any resulting overpayment of tax\nshall be filed by the taxpayer within two years from the time such\nreport or amended return was required to be filed with the commissioner\nof finance. If the report or amended return required by part two or part\nthree of this title is not filed within the ninety day period therein\nspecified, interest on any resulting refund or credit shall cease to\naccrue after such ninetieth day. The amount of such credit or refund--\n (c) shall be computed without change of the allocation of income or\ncapital upon which the taxpayer's return (or any additional assessment)\nwas based, and\n (d) shall not exceed the amount of the reduction in tax attributable\nto such decrease or increase in federal taxable income or federal tax or\nto such federal change or correction or renegotiation, or computation or\nrecomputation of tax.\n This subdivision shall not affect the time within which or the amount\nfor which a claim for credit or refund may be filed apart from this\nsubdivision.\n 4. Overpayment attributable to net operating loss carryback.--A claim\nfor credit or refund of so much of an overpayment under part two of this\ntitle as is attributable to the application to the taxpayer of a net\noperating loss carryback shall be filed within three years from the time\nthe return was due for the taxable year of the loss, or within the\nperiod prescribed in subdivision two in respect of such taxable year, or\nwithin the period prescribed in subdivision three, where applicable, in\nrespect of the taxable year to which the net operating loss is carried\nback, whichever expires the latest. Where such claim for credit or\nrefund is filed after the expiration of the period prescribed in\nsubdivision one or in subdivision two where applicable, in respect of\nthe taxable year to which the net operating loss is carried back, the\namount of such credit or refund shall be computed without change of the\nallocation of income or capital upon which the taxpayer's return (or any\nadditional assessment) was based.\n 5. Failure to file claim within prescribed period.--No credit or\nrefund shall be allowed or made, except as provided in subdivision six\nof this section or subdivision four of section eighty-one, after the\nexpiration of the applicable period of limitation specified in this\npart, unless a claim for credit or refund is filed by the taxpayer\nwithin such period. Any later credit shall be void and any later refund\nerroneous. No period of limitations specified in any other law shall\napply to the recovery by a taxpayer of moneys paid in respect of taxes\nunder the named parts.\n 6. Effect of petition to director of finance.--If a notice of\ndeficiency for a taxable year has been mailed to the taxpayer under\nsection seventy-two and if the taxpayer files a timely petition with the\ndirector of finance under section eighty, he may determine that the\ntaxpayer has made an overpayment for such year (whether or not he also\ndetermines a deficiency for such year). No separate claim for credit or\nrefund for such year shall be filed, and no credit or refund for such\nyear shall be allowed or made, except--\n (a) as to overpayment determined by a decision of the director of\nfinance which has become final; and\n (b) as to any amount collected in excess of an amount computed in\naccordance with the decision of the director of finance which has become\nfinal; and\n (c) as to any amount collected after the period of limitation upon the\nmaking of levy for collection has expired; and\n (d) as to any amount claimed as a result of a change or correction\ndescribed in subdivision three.\n 7. Limit on amount of credit or refund.--The amount of overpayment\ndetermined under subdivision six shall, when the decision of the\ndirector of finance has become final, be credited or refunded in\naccordance with subdivision one of section seventy-seven and shall not\nexceed the amount of tax which the director of finance determines as\npart of his decision was paid--\n (a) after the mailing of the notice of deficiency, or\n (b) within the period which would be applicable under subdivisions\none, two or three, if on the date of the mailing of the notice of\ndeficiency a claim had been filed (whether or not filed) stating the\ngrounds upon which the commissioner of finance finds that there is an\noverpayment.\n For special restriction on credit or refund in a proceeding on a\npetition for redetermination of a deficiency where the notice of\ndeficiency is issued as a result of (i) a net operating loss carryback,\nor (ii) an increase or decrease in federal taxable income or federal\ntax, or (iii) a federal change or correction or renegotiation, or\ncomputation or recomputation of tax, which is treated in the same manner\nas if it were a deficiency for federal income tax purposes, see\nparagraph (g) of subdivision three of section seventy-four.\n 8. Early return.--For purposes of this section, any return filed\nbefore the last day prescribed for the filing thereof shall be\nconsidered as filed on such last day, determined without regard to any\nextension of time granted the taxpayer.\n 9. Prepaid tax.--For purposes of this section, any tax paid by the\ntaxpayer before the last day prescribed for its payment (including any\namount paid by the taxpayer as estimated tax for a taxable year) shall\nbe deemed to have been paid by it on the fifteenth day of the third\nmonth following the close of the taxable year the income of which is the\nbasis for tax under part two or part three of this title, or on the last\nday prescribed in subpart one of part four or in part five for the\nfiling of a final return for such taxable year, or portion thereof,\ndetermined in all cases without regard to any extension of time granted\nthe taxpayer.\n 10. Cross reference.--For provision barring refund of overpayment\ncredited against tax of a succeeding year, see subdivision two of\nsection seventy-seven.\n 11. Notice of change or correction of sales and compensating use tax\nliability.--If a taxpayer is required by part two of this title to file\na report or amended return in respect of a change or correction of its\nsales and compensating use tax liability, claim for credit or refund of\nany resulting overpayment of tax shall be filed by the taxpayer within\ntwo years from the time such report or amended return was required to be\nfiled with the commissioner of finance. If the report or amended return\nrequired by part two of that title is not filed within the ninety day\nperiod therein specified, interest on any resulting refund or credit\nshall cease to accrue after such ninetieth day. The amount of such\ncredit or refund shall be computed without change of the allocation of\nincome or capital upon which the taxpayer's return (or any additional\nassessment) was based, and shall not exceed the amount of the reduction\nin tax attributable to such change or correction of sales and\ncompensating use tax liability.\n This subdivision shall not affect the time within which or the amount\nfor which a claim for credit or refund may be filed apart from this\nsubdivision.\n