§ 687 — Limitations on credit or refund

§ 687. Limitations on credit or refund.-- (a) General.-- Claim for\ncredit or refund of an overpayment of income tax shall be filed by the\ntaxpayer within (i) three years from the time the return was filed, (ii)\ntwo years from the time the tax was paid, or (iii) in the case of any\noverpayment arising from an erroneous denial by the department of\nenvironmental conservation of a certification of completion pursuant to\nsection 27-1419 of the environmental conservation law, two years from\nthe time a final determination to the effect that such denial was\nerroneous is made and is no longer subject to judicial review, whichever\nof such periods expires the latest, or if no return was filed, within\ntwo years from the time the tax was paid. If the claim is filed within\nthe three year period, the amount of the credit or refund shall not\nexceed the portion of the tax paid within the three years immediately\npreceding the filing of the claim plus the period of any extension of\ntime for filing the return unless such claim is for a credit or a\nportion thereof provided pursuant to paragraph two or four of subsection\n(c), paragraph two or four of subsection (d) or subsection (e) of\nsection six hundred six of this chapter. If the claim is not filed\nwithin the three year period, but is filed within the two year period,\nthe amount of the credit or refund shall not exceed the portion of the\ntax paid during the two years immediately preceding the filing of the\nclaim unless such claim is for a credit or a portion thereof provided\npursuant to paragraph two or four of subsection (c), paragraph two or\nfour of subsection (d) or subsection (e) of section six hundred six of\nthis chapter. In the case of a claim for credit or refund filed within\nthe period prescribed in paragraph (iii) of this subsection, the amount\nof the credit or refund may exceed the portion of the tax paid within\nthe applicable period specified in the two immediately preceding\nsentences, but only to the extent of the amount of the overpayment\nattributable to the denial described in such paragraph. Except as\notherwise provided in this section, if no claim is filed, the amount of\na credit or refund shall not exceed the amount which would be allowable\nif a claim had been filed on the date the credit or refund is allowed.\n (b) Extension of time by agreement.--If an agreement under the\nprovisions of paragraph (2) of subsection (c) of section six hundred\neighty-three (extending the period for assessment of income tax) is made\nwithin the period prescribed in subsection (a) for the filing of a claim\nfor credit or refund, the period for filing a claim for credit or\nrefund, or for making credit or refund if no claim is filed, shall not\nexpire prior to six months after the expiration of the period within\nwhich an assessment may be made pursuant to the agreement or any\nextension thereof. The amount of such credit or refund shall not exceed\nthe portion of the tax paid after the execution of the agreement and\nbefore the filing of the claim or the making of the credit or refund, as\nthe case may be, plus the portion of the tax paid within the period\nwhich would be applicable under subsection (a) if a claim had been filed\non the date the agreement was executed.\n (c) Notice of federal change or correction.--A claim for credit or\nrefund of any overpayment of tax attributable to a federal change or\ncorrection required to be reported pursuant to section six hundred\nfifty-nine or by a partner of a partnership required to report a federal\nchange or correction pursuant to section six hundred fifty-nine-a shall\nbe filed by the taxpayer within two years from the time the notice of\nsuch change or correction or such amended return was required to be\nfiled with the commissioner of taxation and finance. If the report or\namended return required by section six hundred fifty-nine or six hundred\nfifty-nine-a is not filed within the ninety day period therein\nspecified, no interest shall be payable on any claim for credit or\nrefund of the overpayment attributable to the federal change or\ncorrection. The amount of such credit or refund shall not exceed the\namount of the reduction in tax attributable to such federal change,\ncorrection or items amended on the taxpayer's amended federal income tax\nreturn. This subsection shall not affect the time within which or the\namount for which a claim for credit or refund may be filed apart from\nthis subsection.\n (d) Overpayment attributable to net operating loss carryback.--A claim\nfor credit or refund of so much of an overpayment as is attributable to\nthe application to the taxpayer of a net operating loss carryback shall\nbe filed within three years from the time the return was due (including\nextensions thereof) for the taxable year of the loss, or within the\nperiod prescribed in subsection (b) in respect of such taxable year, or\nwithin the period prescribed in subsection (c), where applicable, in\nrespect of the taxable year to which the net operating loss is carried\nback, whichever expires the latest.\n (e) Failure to file claim within prescribed period.--No credit or\nrefund shall be allowed or made, except as provided in subsection (f) of\nthis section or subsection (d) of section six hundred ninety, after the\nexpiration of the applicable period of limitation specified in this\narticle, 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 this article.\n (f) Effect of petition to tax commission.--If a notice of deficiency\nfor a taxable year has been mailed to the taxpayer under section six\nhundred eighty-one and if the taxpayer files a timely petition with the\ntax commission under section six hundred eighty-nine, it may determine\nthat the taxpayer has made an overpayment for such year (whether or not\nit also determines a deficiency for such year). No separate claim for\ncredit or refund for such year shall be filed, and no credit or refund\nfor such year shall be allowed or made, except--\n (1) as to overpayments determined by a decision of the tax commission\nwhich has become final; and\n (2) as to any amount collected in excess of an amount computed in\naccordance with the decision of the tax commission which has become\nfinal; and\n (3) as to any amount collected after the period of limitation upon the\nmaking of levy for collection has expired; and\n (4) as to any amount claimed as a result of a change or correction\ndescribed in subsection (c).\n (g) Limit on amount of credit or refund.--The amount of overpayment\ndetermined under subsection (f) shall, when the decision of the tax\ncommission has become final, be credited or refunded in accordance with\nsubsection (a) of section six hundred eighty-six and shall not exceed\nthe amount of tax which the tax commission determines as part of its\ndecision was paid--\n (1) after the mailing of the notice of deficiency, or\n (2) within the period which would be applicable under subsections (a),\n(b) or (c), if on the date of the mailing of the notice of deficiency a\nclaim had been filed (whether or not filed) stating the grounds upon\nwhich the tax commission finds that there is an overpayment.\n (h) 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 (i) Prepaid income tax.--For purposes of this section, any tax paid by\nthe taxpayer before the last day prescribed for its payment, any income\ntax withheld from the taxpayer during any calendar year, and any amount\npaid by the taxpayer as estimated income tax for a taxable year shall be\ndeemed to have been paid by him on the fifteenth day of the fourth month\nfollowing the close of his taxable year with respect to which such\namount constitutes a credit or payment.\n (j) Return and payment of withholding tax.--Notwithstanding subsection\n(h), for purposes of this section with respect to any withholding tax--\n (1) if a return for any period ending with or within a calendar year\nis filed before April fifteenth of the succeeding calendar year, such\nreturn shall be considered filed on April fifteenth of such succeeding\ncalendar year; and\n (2) if a tax with respect to remuneration paid during any period\nending with or within a calendar year is paid before April fifteenth of\nthe succeeding calendar year, such tax shall be considered paid on April\nfifteenth of such succeeding calendar year.\n (k) Running of periods of limitation suspended while taxpayer is\nunable to manage financial affairs due to disability. -- (1) In the case\nof an individual taxpayer, the running of the periods specified in\nsubsections (a), (b), and (c) of this section shall be suspended during\nany period of such individual's life that such individual is financially\ndisabled. For purposes of this subsection, an individual taxpayer is an\nindividual who is subject to any state or local personal income tax or\nsurcharge administered by the commissioner.\n (2) For purposes of paragraph one of this subsection, an individual\ntaxpayer is financially disabled if such individual is unable to manage\nhis or her financial affairs by reason of a medically determinable\nphysical or mental impairment of that individual which can be expected\nto result in death or which has lasted or can be expected to last for a\ncontinuous period of not less than twelve months. An individual shall\nnot be considered to have such an impairment unless proof of the\nexistence thereof is furnished in such form and manner as the\ncommissioner may require.\n (3) An individual taxpayer shall not be treated as financially\ndisabled during any period that such individual's spouse or any other\nperson is authorized to act on behalf of such individual in financial\nmatters.\n (l) Cross reference.-- For provision barring refund of overpayment\ncredited against tax of a succeeding year, except for good cause shown,\nsee subsection (e) of section six hundred eighty-six.\n