§ 1088 — Interest on overpayment

§ 1088. Interest on overpayment.--(a) General.--Notwithstanding the\nprovisions of section sixteen of the state finance law, interest shall\nbe allowed and paid as follows at the overpayment rate set by the\ncommissioner of taxation and finance pursuant to section one thousand\nninety-six, or if no rate is set, at the rate of six percent per annum\nupon any overpayment in respect of the tax imposed by article nine or\nnine-a:\n (1) from the date of the overpayment to the due date of an amount\nagainst which a credit is taken;\n (2) from the date of the overpayment to a date (to be determined by\nthe commissioner) preceding the date of a refund check by not more than\nthirty days, whether or not such refund check is accepted by the\ntaxpayer after tender of such check to the taxpayer. The acceptance of\nsuch check shall be without prejudice to any right of the taxpayer to\nclaim any additional overpayment and interest thereon.\n (3) Late and amended returns and claims for credit or refund.\nNotwithstanding paragraph one or two of this subsection, in the case of\nan overpayment claimed on a return of tax which is filed after the last\ndate prescribed for filing such return (determined with regard to\nextensions), or claimed on an amended return of tax or claimed on a\nclaim for credit or refund, no interest shall be allowed or paid for any\nday before the date on which such return or claim is filed.\n (4) Interest on certain refunds. To the extent provided for in\nregulations promulgated by the commissioner of taxation and finance, if\nan item of income, gain, loss, deduction or credit is changed from the\ntaxable year or period in which it is reported to the taxable year or\nperiod in which it belongs and the change results in an underpayment in\na taxable year or period and an overpayment in some other taxable year\nor period, the provisions of paragraph three of this subsection with\nrespect to an overpayment shall not be applicable to the extent that the\nlimitation in such paragraph on the right to interest would result in a\ntaxpayer not being allowed interest for a length of time with respect to\nan overpayment while being required to pay interest on an equivalent\namount of the related underpayment. However, this paragraph shall not be\nconstrued as limiting or mitigating the effect of any statute of\nlimitations or any other provision of law relating to the authority of\nsuch commissioner to issue a notice of deficiency or to allow a credit\nor refund on an overpayment.\n (5) Amounts of less than five dollars. No interest shall be allowed or\npaid if the amount thereof is less than five dollars.\n (b) Advance payment of tax and estimated tax.--The provisions of\nsubsections (h) and (i) of section one thousand eighty-seven applicable\nin determining the date of payment of tax for purposes of determining\nthe period of limitations on credit or refund, shall be applicable in\ndetermining the date of payment for purposes of this section.\n (c) Tax refund within three months of claim for overpayment. (1) If\nany overpayment of tax imposed by article nine or nine-a is credited or\nrefunded within three months after the last date prescribed (or\npermitted by extension of time) for filing the return of such tax on\nwhich such overpayment was claimed or within three months after such\nreturn was filed, whichever is later, or within three months after an\namended return was filed claiming such overpayment or within three\nmonths after a claim for credit or refund was filed on which such\noverpayment was claimed, no interest shall be allowed under this section\non any such overpayment. For purposes of this subsection, any amended\nreturn or claim for credit or refund filed before the last day\nprescribed (or permitted by extension of time) for the filing of the\nreturn of tax for such year or period shall be considered as filed on\nsuch last day.\n (2) In the case of an overpayment of tax credited due to absence of\napplication by the taxpayer for refund under subsection (a) of section\none thousand eighty-six, where the commissioner notifies the taxpayer\nthat such overpayment has been so credited within three months after the\nlast date prescribed (or permitted by extension of time) for filing the\nreturn of such tax on which such overpayment was claimed or within three\nmonths after such return was filed, whichever is later, and where the\ntaxpayer subsequent to such notice makes a claim for refund of all or\npart of such overpayment, no interest shall be allowed under this\nsection prior to the date of such claim for refund.\n (d) Refund of tax caused by carryback.--For purposes of this section,\nif any overpayment of tax imposed by article nine-a results from a\ncarryback of a net operating loss or a net capital loss, such\noverpayment shall be deemed not to have been made prior to the filing\ndate for the taxable year in which such net operating loss or net\ncapital loss arises. In the case of a taxpayer which has made an\nelection under subchapter s of chapter one of the internal revenue code,\nwhere an overpayment of tax results from a carryback of a net operating\nloss arising in a taxable year ending on or after December thirty-first,\nnineteen hundred seventy-six, or from a carryback of a net capital loss\narising in a taxable year ending on or after December thirty-first,\nnineteen hundred eighty-one, unless a claim for refund based on such\noverpayment has been filed within a period ending twelve months and one\nhundred eighty days subsequent to the last day of the taxable year in\nwhich the net operating loss or net capital loss arises, interest on any\nresulting refund or credit shall cease to accrue upon the conclusion of\nsuch period. Such filing date shall be determined without regard to\nextensions of time to file. For purposes of subsection (c) of this\nsection any overpayment described herein shall be treated as an\noverpayment for the loss year and such subsection shall be applied with\nrespect to such overpayment by treating the return for the loss year as\nnot filed before claim for such overpayment is filed. The term "loss\nyear" means the taxable year in which such loss arises.\n (e) No interest until return in processible form.--\n (1) For purposes of subsections (a) and (c) of this section, a return\nshall not be treated as filed until it is filed in processible form.\n (2) For purposes of paragraph one of this subsection, a return is in a\nprocessible form if--\n (A) such return is filed on a permitted form, and\n (B) such return contains--\n (i) the taxpayer's name, address, and indentifying number and the\nrequired signatures, and\n (ii) sufficient required information (whether on the return or on\nrequired attachments) to permit the mathematical verification of tax\nliability shown on the return.\n (f) Overpayment credited against past-due legally enforceable\ndebts.--If interest is payable pursuant to this section on that portion\nof an overpayment which is certified by the commissioner of taxation and\nfinance to the comptroller as the amount to be credited against a\npast-due legally enforceable debt pursuant to the provisions of section\none hundred seventy-one-f of this chapter, or a city of New York tax\nwarrant judgment debt pursuant to the provisions of section one hundred\nseventy-one-l of this chapter, such portion of such an overpayment shall\ncease to bear interest on the date of such certification.\n (g) Cross-reference.--For provision with respect to interest after\nfailure to file a report or amended return under subdivision three of\nsection two hundred eleven or paragraph one of subdivision (e) of\nsection fifteen hundred fifteen, see subsection (c) of section one\nthousand eighty-seven.\n (h) Notwithstanding any other provision in this section, for taxable\nyears beginning on or after January first, two thousand eight and before\nJanuary first, two thousand nine, interest will be allowed on an\noverpayment on any return or report on which one or more empire zone tax\ncredits are claimed, only from the one hundred eightieth day after the\ntaxpayer files with the department an empire zone retention certificate\nissued pursuant to subdivision (w) of section nine hundred fifty-nine of\nthe general municipal law to the empire zone enterprise which is the\nbasis for the tax credit or credits claimed on the return or report.\n