There Is a Newer Version of the New York Consolidated Laws
2006 New York Code - Credits Against Tax.
§ 606. Credits against tax. (a) Investment tax credit (ITC). * (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article. The amount of the credit shall be the per cent provided for hereinbelow of the investment credit base. The investment credit base is the cost or other basis, for federal income tax purposes, of tangible personal property and other tangible property, including buildings and structural components of buildings, described in paragraph two of this subsection, less the amount of the nonqualified nonrecourse financing with respect to such property to the extent such financing would be excludible from the credit base pursuant to section 46(c)(8) of the internal revenue code (treating such property as section thirty-eight property irrespective of whether or not it in fact constitutes section thirty-eight property). If, at the close of a taxable year following the taxable year in which such property was placed in service, there is a net decrease in the amount of nonqualified nonrecourse financing with respect to such property, such net decrease shall be treated as if it were the cost or other basis of property described in paragraph two of this subsection acquired, constructed, reconstructed or erected during the year of the decrease in the amount of nonqualified nonrecourse financing. The percentage to be used to compute the credit allowed pursuant to this subsection shall be that percentage appearing in column two which is opposite the appropriate period in column one in which the tangible personal property was acquired, constructed, reconstructed or erected, as the case may be: Column 1 Column 2 After December 31, 1968 and prior to January 1, 1974 one per cent After December 31, 1973 and prior to January 1, 1978 two per cent After December 31, 1977 and prior to January 1, 1979 three per cent After December 31, 1978 and prior to June 1, 1981 four per cent After May 31, 1981 and prior to July 1, 1982 five per cent After June 30, 1982 and before January 1, 1987 six per cent After December 31, 1986 four per cent, except that in the case of research and development property the applicable percentage shall be seven Provided, however, that in the case of an acquisition, construction, reconstruction or erection which was commenced in any one period and continued or completed in any subsequent period the credit shall be the sum of the portions of the investment credit base attributable to each such period, which portion with respect to each such period shall be ascertained by multiplying such investment credit base by a fraction the numerator of which shall be the expenditures paid or incurred during such period for such purposes and the denominator of which shall be the total of all expenditures paid or incurred for such acquisition, construction, reconstruction or erection, multiplied by the allowable percentage for each such period. * NB Applies to taxable years beginning after December 31, 1986 (2) * A credit shall be allowed under this subsection with respect to tangible personal property and other tangible property, including buildings and structural components of buildings, which are: depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, have a situs in this state and are principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing. For purposes of this paragraph, manufacturing shall mean the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combinations to matter which already has gone through some artificial process by the use of machinery, tools, appliances and other similar equipment. Property used in the production of goods shall include machinery, equipment or other tangible property which is principally used in the repair and service of other machinery, equipment or other tangible property used principally in the production of goods and shall include all facilities used in the production operation, including storage of material to be used in production and of the products that are produced. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply (A) A credit shall be allowed under this subsection with respect to tangible personal property and other tangible property, including buildings and structural components of buildings, which are: depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, have a situs in this state and are (i) principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing, (ii) industrial waste treatment facilities or air pollution control facilities, used in the taxpayer's trade or business, (iii) research and development property, (iv) principally used in the ordinary course of the taxpayer's trade or business as a broker or dealer in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of stocks, bonds or other securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or of commodities as defined in section 475(e) of the Internal Revenue Code, (v) principally used in the ordinary course of the taxpayer's trade or business of providing investment advisory services for a regulated investment company as defined in section eight hundred fifty-one of the Internal Revenue Code, or lending, loan arrangement or loan origination services to customers in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or (vi) principally used as a qualified film production facility including qualified film production facilities having a situs in an empire zone designated as such pursuant to article eighteen-B of the general municipal law, where the taxpayer is providing three or more services to any qualified film production company using the facility, including such services as a studio lighting grid, lighting and grip equipment, multi-line phone service, broadband information technology access, industrial scale electrical capacity, food services, security services, and heating, ventilation and air conditioning. For purposes of clauses (iv) and (v) of this subparagraph, property purchased by a taxpayer affiliated with a regulated broker or dealer is allowed a credit under this subsection if the property is used by its affiliated regulated broker or dealer in accordance with this subsection. Provided, however, a taxpayer shall not be allowed the credit provided by clauses (iv) and (v) of this subparagraph unless all or a substantial portion of the employees performing the administrative and support functions resulting from or related to the qualifying uses of such equipment are located in this state. For purposes of this subsection, the term "goods" shall not include electricity. (B) For purposes of this paragraph, the following definitions shall apply: (i) Manufacturing shall mean the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combinations to matter which already has gone through some artificial process by the use of machinery, tools, appliances and other similar equipment. Property used in the production of goods shall include machinery, equipment or other tangible property which is principally used in the repair and service of other machinery, equipment or other tangible property used principally in the production of goods and shall include all facilities used in the production operation, including storage of material to be used in production and of the products that are produced. (ii) Research and development property shall mean property which is used for purposes of research and development in the experimental or laboratory sense. Such purposes shall not be deemed to include the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in connection with literary, historical or similar projects. (iii) Industrial waste treatment facilities shall mean property constituting facilities for the treatment, neutralization or stabilization of industrial waste and other wastes (as the terms "industrial waste" and "other wastes" are defined in section 17-0105 of the environmental conservation law) from a point immediately preceding the point of such treatment, neutralization or stabilization to the point of disposal, including the necessary pumping and transmitting facilities, but excluding such facilities installed for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable. (iv) Air pollution control facilities shall mean property constituting facilities which remove, reduce, or render less noxious air contaminants emitted from an air contamination source (as the terms "air contaminant" and "air contamination source" are defined in section 19-0107 of the environmental conservation law) from a point immediately preceding the point of such removal, reduction or rendering to the point of discharge of air, meeting emission standards as established by the department of environmental conservation, but excluding such facilities installed for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable and excluding those facilities which rely for their efficacy on dilution, dispersion or assimilation of air contaminants in the ambient air after emission. Such term shall further include flue gas desulfurization equipment and attendant sludge disposal facilities, fluidized bed boilers, precombustion coal cleaning facilities or other facilities that conform with this subsection and which comply with the provisions of the State Acid Deposition Control Act set forth in title nine of article nineteen of the environmental conservation law. (v) For purposes of this paragraph, the terms "qualified film production facility" and "qualified film production company" shall have the same meaning as in section twenty-four of this chapter. (C) However, such credit shall be allowed with respect to industrial waste treatment facilities and air pollution control facilities only on condition that such facilities have been certified by the state commissioner of environmental conservation or his designated representative, pursuant to subdivision one of section 17-0707 or subdivision one of section 19-0309 of the environmental conservation law, as complying with applicable provisions of the environmental conservation law, the public health law, the state sanitary code and codes, rules, regulations, permits or orders issued pursuant thereto. * (3) A taxpayer shall not be allowed a credit under this subsection with respect to any property described in paragraph two hereof if such property qualifies for the modification allowed under either paragraph three or paragraph four of subsection (g) of section six hundred twelve whether or not such amount shall have been subtracted. Provided, however, with respect to property which qualifies for a modification under either clause (A), (B) or (C) of paragraph four of subsection (g) because such property was ordered on or before December thirty-first, nineteen hundred sixty-eight, but with respect to which no expenditure has been paid or incurred at such date, the taxpayer may elect to subtract the amount allowable under clauses (A), (B) or (C) or may take the credit provided by this subsection, but not both. * NB Applies to taxable years prior to December 31, 1986 * (3) A taxpayer shall not be allowed a credit under this subsection with respect to any property described in clause (i) of subparagraph (B) of paragraph two hereof if such property qualifies for the modification allowed under either paragraph three or paragraph four of subsection (g) of section six hundred twelve whether or not such amount shall have been subtracted. Provided, however, with respect to property which qualifies for a modification under either clause (A), (B) or (C) of paragraph four of subsection (g) because such property was ordered on or before December thirty-first, nineteen hundred sixty-eight, but with respect to which no expenditure has been paid or incurred at such date, the taxpayer may elect to subtract the amount allowable under clauses (A), (B) or (C) or may take the credit provided by this subsection, but not both. * NB Applies to taxable years beginning after December 31, 1986 (4) A taxpayer shall not be allowed a credit under this subsection with respect to tangible personal property and other tangible property, including buildings and structural components of buildings, which it leases to any other person or corporation except where a taxpayer leases property to an affiliated regulated broker or dealer that uses such property in accordance with clause (iv) or (v) of subparagraph (A) of paragraph two of this subsection. For purposes of the preceding sentence, any contract or agreement to lease or rent or for a license to use such property shall be considered a lease. Provided, however, in determining whether a taxpayer shall be allowed a credit under this subsection with respect to such property, any election made with respect to such property pursuant to the provisions of paragraph eight of subsection (f) of section one hundred sixty-eight of the internal revenue code, as such paragraph was in effect for agreements entered into prior to January first, nineteen hundred eighty-four, shall be disregarded. For purposes of this paragraph, the use of a qualified film production facility by a qualified film production company shall not be considered a lease of such facility to such company. * (5) If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years, provided, however, in lieu of carrying over any such excess, a taxpayer who qualifies as an owner of a new business for purposes of paragraph ten of this subsection may, at his option, receive such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Applies to taxable years prior to December 31, 1986 * (5) If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess allowed for a taxable year commencing prior to January first, nineteen hundred eighty-seven may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years, but in no event shall such credit be carried over to taxable years commencing on or after January first, nineteen hundred ninety-seven, and any amount of credit allowed for a taxable year commencing on or after January first, nineteen hundred eighty-seven and not deductible in such year may be carried over to the ten taxable years next following such taxable year and may be deducted from the taxpayer's tax for such year or years. In lieu of carrying over any such excess, a taxpayer who qualifies as an owner of a new business for purposes of paragraph ten of this subsection may, at his option, receive such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Applies to taxable years beginning after December 31, 1986 * (6) At the option of the taxpayer, air or water pollution control facilities which qualify for elective modifications under subsection (h) of section six hundred twelve, or research and development facilities which qualify for elective modifications under paragraphs two and four of subsection (g) of section six hundred twelve may be treated as property principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing, provided the property otherwise qualifies under paragraph two of this subsection, in which event, a modification shall not be allowed under such subsection (h) and under such paragraphs two and four of subsection (g). * NB Applies to taxable years prior to December 31, 1986 * (6) At the option of the taxpayer for taxable years commencing prior to January first, nineteen hundred eighty-seven, air or water pollution control facilities which qualify for elective modifications under subsection (h) of section six hundred twelve, or research and development facilities which qualify for elective modifications under paragraphs two and four of subsection (g) of section six hundred twelve may be treated as property principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing, provided the property otherwise qualifies under paragraph two of this subsection, in which event, a modification shall not be allowed under such subsection (h) and under such paragraphs two and four of subsection (g). * NB Applies to taxable years beginning after December 31, 1986 * (7) (A) With respect to property which is depreciable pursuant to section one hundred sixty-seven of the internal revenue code but is not subject to the provisions of section one hundred sixty-eight of such code and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subparagraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For purposes of this subparagraph, useful life of property shall be the same as the taxpayer uses for depreciation purposes when computing his federal income tax liability. (B) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to three-year property, as defined in subsection (e) of section one hundred sixty-eight of the internal revenue code, which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to thirty-six. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of thirty-six months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to thirty-six. (C) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to property subject to the provisions of section one hundred sixty-eight of the internal revenue code, other than three-year property as defined in subsection (e) of such section one hundred sixty-eight which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to sixty. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of sixty months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to sixty. (D) With respect to any property to which section one hundred sixty-eight of the internal revenue code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under the internal revenue code, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subparagraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply * (E) For purposes of this paragraph, property (i) which is described in subparagraph (B), (C) or (D) of this paragraph, and (ii) which is subject to paragraph twenty-six of subsection (c) and paragraph twenty-five of subsection (b) of section six hundred twelve of this chapter, shall be treated as property which is depreciable pursuant to section one hundred sixty-seven of the internal revenue code but is not subject to section one hundred sixty-eight of such code. * NB Applies to taxable years beginning after December 31, 1986 * (F) For purposes of this paragraph, where a credit is allowed with respect to an air pollution control facility on the basis of a certificate of compliance issued pursuant to the environmental conservation law and the certificate is revoked pursuant to subdivision three of section 19-0309 of the environmental conservation law, such revocation shall constitute a disposal or cessation of qualified use, unless such facility is described in clause (i) or (iii) of subparagraph (A) of paragraph two of this subsection. Also for purposes of this subparagraph, the use of an air pollution control facility or an industrial waste treatment facility for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable shall constitute a cessation of qualified use, unless such facility is described in clause (i) or (iii) of subparagraph (A) of paragraph two of this subsection. * NB Applies to taxable years beginning after December 31, 1986 (G) For taxable years commencing on or after January first, nineteen hundred eighty-seven, the amount required to be added back pursuant to this paragraph shall be augmented by an amount equal to the product of such amount and the underpayment rate of interest (without regard to compounding), set by the commissioner pursuant to subsection (j) of section six hundred ninety-seven, in effect on the last day of the taxable year. * Shall apply to interest chargeable on or after April 1, 2003 * (H) If, as of the close of the taxable year, there is a net increase with respect to the taxpayer in the amount of nonqualified nonrecourse financing (within the meaning of section 46(c) (8) of the internal revenue code) with respect to any property with respect to which the credit under this subsection was limited based on attributable nonqualified nonrecourse financing, then an amount equal to the decrease in such credit which would have resulted from reducing, by the amount of such net increase, the cost or other basis taken into account with respect to such property must be added back in such taxable year. The amount of nonqualified nonrecourse financing shall not be treated as increased by reason of a transfer of (or agreement to transfer) any evidence of an indebtedness if such transfer occurs (or such agreement is entered into) more than one year after the date such indebtedness was incurred. * NB Applies to taxable years beginning after December 31, 1986 (10) For purposes of paragraph five of this subsection, an individual who is either a sole proprietor or a member of a partnership shall qualify as an owner of a new business unless: (A) the business of which the individual is an owner is substantially similar in operation and in ownership to a business entity taxable, or previously taxable, under section one hundred eighty-three, one hundred eighty-four, one hundred eighty-five or one hundred eighty-six of article nine; article nine-A, thirty-two or thirty-three of this chapter; article twenty-three of this chapter or which would have been subject to tax under such article twenty-three (as such article was in effect on January first, nineteen hundred eighty) or the income (or losses) of which is (or was) includable under article twenty-two of this chapter whereby the intent and purpose of this paragraph and paragraph five of this subsection with respect to refunding of credit to new business would be evaded; or (B) the individual has operated such new business entity in this state for more than five taxable years (excluding short years of the business). (11) Retail enterprise tax credit. A retail enterprise, not eligible to claim the credit under paragraph one of this subsection, but eligible to claim the credit allowable under section thirty-eight of the internal revenue code pursuant solely to the provisions of subparagraph (E) of paragraph one of subsection (a) of section forty-eight of such code, shall be allowed a credit as hereinafter computed. The amount of the credit shall be the percentage appearing in paragraph one of this subsection for the periods described therein for the amount of qualified rehabilitation expenditures, as defined in subsection (g) of section forty-eight of such code, paid or incurred with respect to a qualified rehabilitated building, as defined in such subsection (g), located in this state and such expenditures shall be further limited to only the portion thereof paid or incurred with respect to that part of a qualified rehabilitated building employed by such taxpayer in the retail sales activity of such retail enterprise. For the purposes of this subsection, the term "retail enterprise" means a taxpayer which is: (A) a registered vendor under article twenty-eight of this chapter, (B) primarily engaged in the retail sale, as the term "retail sale" is defined in subparagraph (i) of paragraph four of subdivision (b) of section eleven hundred one of this chapter, of tangible personal property, and (C) otherwise eligible for the credit allowed pursuant to section thirty-eight of the internal revenue code. * (12) Rehabilitation credit for historic barns. A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article. The amount of the credit shall be twenty-five percent of the taxpayer's qualified rehabilitation expenditures, as defined in paragraph two of subsection (c) of section forty-seven of the internal revenue code, which qualify as the basis for the credit provided for under paragraph one of subsection (b) of section thirty-eight of such code by reason of subsection one of section forty-six of such code, paid or incurred with respect to any barn located in this state which is a qualified rehabilitated building, as such term is defined in paragraph one of subsection (c) of such section forty-seven. For purposes of this paragraph, the term "barn" means a building originally designed and used for storing farm equipment or agricultural products, or for housing livestock. Provided, however, such qualified rehabilitation expenditures shall not include any such expenditures which are included, directly or indirectly, in the computation of a credit claimed by the taxpayer pursuant to paragraph one of this subsection. Provided further that no rehabilitation credit shall be allowed for any rehabilitation of a barn which, immediately prior to the commencement of such rehabilitation, was used for residential purposes, or which converts a barn not suitable for residential purposes into one which is so suitable, nor shall a rehabilitation credit be allowed for any rehabilitation that materially alters the historic appearance of the barn. * NB Applies to taxable years beginning on or after January 1, 1997 (13)(A)(i) If a taxpayer is required by paragraph seven of this subsection to add back a portion of the credit taken because property was destroyed or ceased to be in qualified use as a direct result of the September eleventh, two thousand one terrorist attacks, such taxpayer may elect to defer the amount to be recaptured for all such property to the taxable year next succeeding the taxable year in which the destruction or cessation of qualified use occurred. The taxable year in which the destruction or cessation of qualified use occurred shall be hereinafter referred to as the "recapture event taxable year". If the taxpayer's total employment number in the state on the last day of the taxable year next succeeding the recapture event taxable year is a significant percentage of the taxpayer's average total employment number in the state for the taxpayer's recapture event taxable year and the two taxable years immediately preceding the recapture event taxable year, then the taxpayer shall not be required to recapture any credit with respect to such property. If the taxpayer's total employment number in the state on the last day of the taxable year next succeeding the recapture event taxable year is not a significant percentage of the taxpayer's average total employment number in the state for the taxpayer's recapture event taxable year and the two taxable years immediately preceding the recapture event taxable year, the taxpayer shall be required to recapture the portion of the credit taken under this subsection, as required by paragraph seven of this subsection, for all of its property destroyed or which ceased to be in qualified use as a direct result of the September eleventh, two thousand one terrorist attacks. The amount required to be recaptured shall be augmented as required pursuant to subparagraph (G) of paragraph seven of this subsection by using an interest rate equal to two times the rate of interest specified in such subparagraph seven applicable for the taxable year in which the recapture occurs. (ii) The taxpayer's total employment number shall include all employees of the taxpayer employed full-time by the taxpayer in the state. The average total employment number for the recapture event taxable year and the two taxable years immediately preceding the recapture event taxable year shall be computed by determining the taxpayer's total employment number on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September and the thirty-first day of December during the applicable taxable years, adding together the number of such individuals determined to be so employed on each of such dates and dividing the sum so obtained by the number of such dates occurring within such applicable taxable years. However, in the case of the taxable year which included September eleventh, two thousand one, the average total employment number for such taxable year shall be determined by using the total employment number on September first, two thousand one in lieu of September thirtieth, two thousand one and, if such taxable year included December thirty-first, two thousand one, by excluding the total employment number on December thirty-first, two thousand one. (B) In lieu of subparagraph (A) of this paragraph, a taxpayer may elect to recapture the portion of the credit taken under this subsection, as required by paragraph seven of this subsection, for all of its property destroyed or which ceased to be in qualified use as a direct result of the September eleventh, two thousand one terrorist attacks, in the taxable year in which the destruction or cessation of qualified use occurred. If the taxpayer makes such election and acquires property (hereinafter referred to as "replacement property") to replace any property destroyed as a direct result of the September eleventh, two thousand one terrorist attacks (regardless of when such property was placed in service and whether a credit was claimed on that property pursuant to this subsection), and such replacement property is similar or related in service or use to such destroyed property, the investment credit base of the replacement property shall be determined without regard to any basis reduction required pursuant to section 1033 of the internal revenue code. (C) The election made by the taxpayer under subparagraph (A) or (B) of this paragraph shall be made in the manner and form prescribed by the commissioner. (D) A taxpayer, over fifty percent of whose employees died as a direct result of the September eleventh, two thousand one terrorist attacks, may make the election provided for in subparagraph (A) of this paragraph, and shall not be required to recapture any credit with respect to property which was destroyed or which ceased to be in qualified use as a direct result of such attacks, whether or not it meets the employment test specified in clause (i) of subparagraph (A) of this paragraph. (a-1) Employment incentive credit (EIC). (1)(A) Where a taxpayer is allowed a credit under subsection (a) of this section, other than at the optional rate applicable to research and development property, the taxpayer shall be allowed a credit for each of the two years next succeeding the taxable year for which the credit under such subsection (a) is allowed with respect to such property, whether or not deductible in such taxable year or in subsequent taxable years pursuant to paragraph five of subsection (a) of this section. Provided, however, that the credit allowable under this subsection for any taxable year shall be allowed only if the average number of employees during such taxable year is at least one hundred one percent of the average number of employees during the employment base year. The employment base year shall be the taxable year immediately preceding the taxable year for which the credit under such subsection (a) is allowed except that in the case of a new business, the employment base year shall be the taxable year in which the credit under such subsection (a) is allowed. (B) The amount of the credit allowed under this subsection shall be as set forth in the following table: Average number of employees Credit allowed under during the taxable year this subsection expressed as a expressed as a percentage of percentage of average number of employees the applicable investment in employment base year: credit base: Less than 102% 1.5% at least 102% and less than 103% 2% at least 103% 2.5% (2) The average number of employees in a taxable year shall be computed by ascertaining the number of employees within the state employed by the taxpayer on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September and the thirty-first day of December in the taxable year, by adding together the number of employees ascertained on each of such dates and dividing the sum so obtained by the number of such abovementioned dates occurring within the taxable year. For the purposes of this subsection, the term "employees within the state" shall not include, except with respect to the employment base year, any employee with respect to whom a credit provided for under subsection (k) of this section is claimed for the taxable year, based on employment within a zone equivalent area designated as such pursuant to article eighteen-B of the general municipal law. (3) If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess allowed for a taxable year may be carried over to the ten taxable years next following such taxable year and may be deducted from the taxpayer's tax for such year or years. In lieu of carrying over any such excess, a taxpayer who qualifies as an owner of a new business for purposes of paragraph ten of subsection (a) of this section may, at his or her option, receive such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (b) Household credit. * (1) For taxable years beginning before nineteen hundred ninety-one, a household credit shall be allowed against the tax imposed by section six hundred one of this article. Provided, however, the credit allowed for the taxable year beginning in nineteen hundred ninety shall be fifty percent of the credit otherwise allowable under this subsection. The credit, computed as described in paragraph two of this subsection, shall not exceed the tax imposed by section six hundred one for the taxable year, reduced by the credits permitted under subsection (c) of this section and sections six hundred twenty, six hundred twenty-one and six hundred forty of this article. * NB Applies to taxable years beginning prior to 1988 * (1) A household credit shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one of this article. The credit, computed as described in paragraph two of this subsection, shall not exceed the tax determined under subsections (a) through (d) of section six hundred one for the taxable year, reduced by the credits permitted under subsections (c) and (m) of this section and sections six hundred twenty and six hundred twenty-one of this article. * NB Applies to taxable years beginning after 1987 * (1) A household credit shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one of this article. The credit, computed as described in paragraph two of this subsection, shall not exceed the tax determined under subsections (a) through (d) of section six hundred one for the taxable year, reduced by the credits permitted under sections six hundred twenty and six hundred twenty-one of this article. * NB Applies to taxable years beginning on or after January 1, 1996 (2) (A) For any individual who is not married nor the head of a household nor a surviving spouse, the amount of the credit allowed pursuant to this subsection for taxable years beginning on or after January first, nineteen hundred eighty-six shall be determined in accordance with the following table: If household gross The credit income is shall be Not over $5,000 $75.00 Over $5,000 but not over $6,000 60.00 Over $6,000 but not over $7,000 50.00 Over $7,000 but not over $20,000 45.00 Over $20,000 but not over $25,000 40.00 Over $25,000 but not over $28,000 20.00 * (B) For any husband and wife, head of a household, or surviving spouse, the amount of the credit allowed pursuant to this subsection for taxable years beginning on or after January first, nineteen hundred eighty-six shall be determined in accordance with the following table: If household gross The credit income is shall be Not over $5,000 $90.00 plus an amount equal to $15.00 multiplied by a number which is one less than the number of exemptions for which the taxpayer (or in the case of a husband and wife, taxpayers) is entitled to a deduction for the taxable year for federal income tax purposes under subsections (b) and (c) of section one hundred fifty-one of the internal revenue code Over $5,000 but not over $6,000 $75.00 plus such an amount Over $6,000 but not over $7,000 $65.00 plus such an amount Over $7,000 but not over $20,000 $60.00 plus such an amount Over $20,000 but not over $22,000 $60.00 plus an amount equal to $10.00 multiplied by a number which is one less than the number of exemptions for which the taxpayer (or in the case of a husband and wife, taxpayers) is entitled to a deduction for the taxable year for federal income tax purposes under subsections (b) and (c) of section one hundred fifty-one of the internal revenue code Over $22,000 but not over $25,000 $50.00 plus such an amount Over $25,000 but not over $28,000 $40.00 plus an amount equal to $5.00 multiplied by a number which is one less than the number of exemptions for which the taxpayer (or in the case of a husband and wife, taxpayers) is entitled to a deduction for the taxable year for federal income tax purposes under subsections (b) and (c) of section one hundred fifty-one of the internal revenue code Over $28,000 but not over $32,000 $20.00 plus such an amount * NB Applies to taxable years beginning after 1986 (3) For the purposes of this subsection: (A) "Household gross income" shall mean the aggregate federal adjusted gross income of a household, as the term household is defined in subparagraph (B) of this paragraph, for the taxable year. (B) "Household" means a husband and wife, a head of household, a surviving spouse, or an individual who is not married nor the head of a household nor a surviving spouse nor a taxpayer with respect to whom a deduction under subsection (c) of section one hundred fifty-one of the internal revenue code is allowable to another taxpayer for the taxable year. (C) "Household gross income of a husband and wife" shall be the aggregate of their federal adjusted gross incomes for the taxable year irrespective of whether joint or separate New York income tax returns are filed. Provided, however, that a husband or wife who is required to file a separate New York income tax return shall be permitted one-half the credit otherwise allowed his or her household, except as limited by paragraph one of this subsection. * (D) "Household gross income" shall be computed in all cases as if each member of the household were a resident for the entire taxable year. * NB Repealed as applied to taxable years beginning after 1987 * (E) If a taxpayer changes his status during his taxable year from resident to nonresident, or from nonresident to resident, the household credit shall be prorated according to each period. In the case of a husband and wife, if either or both changes his or her status from resident to nonresident or from nonresident to resident and separate returns are filed, the credit computed for the entire year shall be divided first as provided in subparagraph (C) of this paragraph and then prorated according to each period. * NB Repealed as applied to taxable years beginning after 1987 (c) Credit for certain household and dependent care services necessary for gainful employment. * (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by section six hundred one of this article. Except as provided below, the amount of the credit shall be twenty percent of the credit allowed such taxpayer pursuant to the provisions of section twenty-one of the internal revenue code for the same taxable year. The amount of such credit shall not exceed the tax imposed by section six hundred one of this article for the taxable year, reduced by the credits permitted under sections six hundred twenty, six hundred twenty-one and six hundred forty of this article. * NB Shall be deemed to have been in full force and effect since April 20, 1987 * (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax determined under subsections (a) through (d) of section six hundred one of this article. Except as provided below, the amount of the credit shall be twenty percent of the credit allowed such taxpayer pursuant to the provisions of section twenty-one of the internal revenue code for the same taxable year. The amount of such credit shall not exceed the tax determined under subsections (a) through (d) of section six hundred one of this article for the taxable year, reduced by the credits permitted under sections six hundred twenty and six hundred twenty-one of this article. * NB Applies to taxable years beginning after 1987 * (2) In the case of a husband and wife who file a joint federal return, but who are required to determine their New York taxes separately, the credit allowed pursuant to this subsection may only be applied against the tax imposed on the spouse with the lower taxable income, computed without regard to such credit. * NB Applies to taxable years beginning after 1986 * (3) A nonresident individual shall be allowed the same credit as is allowed resident individuals under this subsection; except that if (A) his New York adjusted gross income determined under section six hundred thirty-two of this article, as a nonresident is exceeded by (B) the New York adjusted gross income he would be required to report under section six hundred twelve of this article, if he were a resident, by more than one hundred dollars, the credit shall be limited to the amount which represents the same percentage of the total allowable credit which (A) is of (B). * NB Applies to taxable years beginning after 1986 * NB Repealed as applied to taxable years beginning after 1987 * (4) If a taxpayer changes his status during his taxable year from resident to nonresident, or from nonresident to resident, a credit computed as if the taxpayer were a resident for the entire taxable year shall be prorated according to the periods of residence and nonresidence, and the portion thereby assigned to the period of nonresidence shall be then subject to the limitations set forth in paragraph three of this subsection computed with respect to such period of nonresidence. * NB Repealed as applied to taxable years beginning after 1987 * (c) Credit for certain household and dependent care services necessary for gainful employment. (1) A taxpayer shall be allowed a credit as provided herein equal to the applicable percentage of the credit allowable under section twenty-one of the internal revenue code for the same taxable year (without regard to whether the taxpayer in fact claimed the credit under such section twenty-one for such taxable year). The applicable percentage shall be the sum of (i) twenty percent and (ii) a multiplier multiplied by a fraction. For taxable years beginning in nineteen hundred ninety-six and nineteen hundred ninety-seven, the numerator of such fraction shall be the lesser of (i) four thousand dollars or (ii) fourteen thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For the taxable year beginning in nineteen hundred ninety-eight, the numerator of such fraction shall be the lesser of (i) thirteen thousand dollars or (ii) thirty thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For taxable years beginning in nineteen hundred ninety-nine, the numerator of such fraction shall be the lesser of (i) fifteen thousand dollars or (ii) fifty thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For taxable years beginning after nineteen hundred ninety-nine, the numerator of such fraction shall be the lesser of (i) fifteen thousand dollars or (ii) sixty-five thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. The denominator of such fraction shall be four thousand dollars for taxable years beginning in nineteen hundred ninety-six and nineteen hundred ninety-seven, thirteen thousand dollars for the taxable year beginning in nineteen hundred ninety-eight, and fifteen thousand dollars for taxable years beginning after nineteen hundred ninety-eight. The multiplier shall be ten percent for taxable years beginning in nineteen hundred ninety-six, forty percent for taxable years beginning in nineteen hundred ninety-seven, and eighty percent for taxable years beginning after nineteen hundred ninety-seven. Provided, however, for taxable years beginning after nineteen hundred ninety-nine, for a person whose New York adjusted gross income is less than forty thousand dollars, such applicable percentage shall be equal to (i) one hundred percent, plus (ii) ten percent multiplied by a fraction whose numerator shall be the lesser of (i) fifteen thousand dollars or (ii) forty thousand dollars less the New York adjusted gross income for the taxable year, provided such numerator shall not be less than zero, and whose denominator shall be fifteen thousand dollars. Provided, further, that if the reversion event, as defined in this paragraph, occurs, the applicable percentage shall, for taxable years ending on or after the date on which the reversion event occurred, be determined using the rules specified in this paragraph applicable to taxable years beginning in nineteen hundred ninety-nine. The reversion event shall be deemed to have occurred on the date on which federal action, including but not limited to, administrative, statutory or regulatory changes, materially reduces or eliminates New York state's allocation of the federal temporary assistance for needy families block grant, or materially reduces the ability of the state to spend federal temporary assistance for needy families block grant funds for the credit for certain household and dependent care services necessary for gainful employment or to apply state general fund spending on the credit for certain household and dependent care services necessary for gainful employment toward the temporary assistance for needy families block grant maintenance of effort requirement, and the commissioner of the office of temporary and disability assistance shall certify the date of such event to the commissioner, the director of the division of the budget, the speaker of the assembly and the temporary president of the senate. (2) Residents. In the case of a resident taxpayer, the credit under this subsection shall be allowed against the taxes imposed by this article for the taxable year reduced by the credits permitted by this article. If the credit exceeds the tax as so reduced, the taxpayer may receive, and the comptroller, subject to a certificate of the commissioner, shall pay as an overpayment, without interest, the amount of such excess. (3) Nonresidents. In the case of a nonresident taxpayer, the credit under this subsection shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one. The amount of the credit shall not exceed the tax determined under such subsections for the taxable year reduced by the credit permitted under subsection (b) of this section. (4) Part-year residents. In the case of a part-year resident taxpayer, the credit under this subsection shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one reduced by the credit permitted under subsection (b) of this section, and any excess credit after such application shall be allowed against the taxes imposed by sections six hundred two and six hundred three. Any remaining excess, after such application, shall be refunded as provided in paragraph two hereof, provided, however, that any overpayment under such paragraph shall be limited to the amount of the remaining excess multiplied by a fraction, the numerator of which is federal adjusted gross income for the period of residence, computed as if the taxable year for federal income tax purposes were limited to the period of residence, and the denominator of which is federal adjusted gross income for the taxable year. (5) In the case of a husband and wife who file a joint federal return, but who are required to determine their New York taxes separately, the credit allowed pursuant to this subsection may only be applied against the tax imposed on the spouse with the lower taxable income, computed without regard to such credit. In the case of a husband and wife who are not required to file a federal return, the credit under this subsection shall be allowed only if such taxpayers file a joint New York income tax return. * NB Applies to taxable years beginning on or after January 1, 1996 (c-1) Empire state child credit. (1) A resident taxpayer shall be allowed a credit as provided herein equal to the greater of one hundred dollars times the number of qualifying children of the taxpayer or the applicable percentage of the child tax credit allowed the taxpayer under section twenty-four of the internal revenue code for the same taxable year. Provided, however, in the case of a taxpayer whose federal adjusted gross income exceeds the applicable threshold amount set forth by section 24(b)(2) of the Internal Revenue Code, the credit shall only be equal to the applicable percentage of the child tax credit allowed the taxpayer under section 24 of the Internal Revenue Code. For the purposes of this subsection, a qualifying child shall be a child who meets the definition of qualified child under section 24(c) of the internal revenue code and is at least four years of age. The applicable percentage shall be thirty-three percent. (2) If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (3) In the case of a husband and wife who file a joint federal return, but who are required to determine their New York taxes separately, the credit allowed pursuant to this subsection may be applied against the tax imposed of either or divided between them as they may elect. (d) Earned income credit. (1) General. A taxpayer shall be allowed a credit as provided herein equal to (i) the applicable percentage of the earned income credit allowed under section thirty-two of the internal revenue code for the same taxable year, (ii) reduced by the credit permitted under subsection (b) of this section. The applicable percentage shall be (i) seven and one-half percent for taxable years beginning in nineteen hundred ninety-four, (ii) ten percent for taxable years beginning in nineteen hundred ninety-five, (iii) twenty percent for taxable years beginning after nineteen hundred ninety-five and before two thousand, (iv) twenty-two and one-half percent for taxable years beginning in two thousand, (v) twenty-five percent for taxable years beginning in two thousand one, (vi) twenty-seven and one-half percent for taxable years beginning in two thousand two, and (vii) thirty percent for taxable years beginning in two thousand three and thereafter. Provided, however, that if the reversion event, as defined in this paragraph, occurs, the applicable percentage shall be twenty percent for taxable years ending on or after the date on which the reversion event occurred. The reversion event shall be deemed to have occurred on the date on which federal action, including but not limited to, administrative, statutory or regulatory changes, materially reduces or eliminates New York state's allocation of the federal temporary assistance for needy families block grant, or materially reduces the ability of the state to spend federal temporary assistance for needy families block grant funds for the earned income credit or to apply state general fund spending on the earned income credit toward the temporary assistance for needy families block grant maintenance of effort requirement, and the commissioner of the office of temporary and disability assistance shall certify the date of such event to the commissioner of taxation and finance, the director of the division of the budget, the speaker of the assembly and the temporary president of the senate. (2) Residents. In the case of a resident taxpayer, the credit under this subsection shall be allowed against the taxes imposed by this article for the taxable year reduced by the credits permitted by this article. If the credit exceeds the tax as so reduced, the taxpayer may receive, and the comptroller, subject to a certificate of the commissioner, shall pay as an overpayment, without interest, the amount of such excess. (3) Nonresidents. In the case of a nonresident taxpayer, the credit under this subsection shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one. The amount of the credit shall not exceed the tax determined under such subsections for the taxable year reduced by the credits permitted under subsections (b), (c) and (m) of this section. (4) Part-year residents. In the case of a part-year resident taxpayer, the credit under this subsection shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one reduced by the credits permitted under subsections (b), (c) and (m) of this section, and any excess credit after such application shall be allowed against the taxes imposed by sections six hundred two and six hundred three. Any remaining excess, after such application, shall be refunded as provided in paragraph two hereof, provided, however, that any overpayment under such paragraph shall be limited to the amount of the remaining excess multiplied by a fraction, the numerator of which is federal adjusted gross income for the period of residence, computed as if the taxable year for federal income tax purposes were limited to the period of residence, and the denominator of which is federal adjusted gross income for the taxable year. (5) Husband and wife. In the case of a husband and wife who file a joint federal return but who are required to determine their New York taxes separately, the credit allowed pursuant to this subsection may be applied against the tax of either or divided between them as they may elect. (6) Notification. The commissioner shall periodically, but not less than every three years, make efforts to alert taxpayers that may be currently eligible to receive the credit provided under this subsection, and the credit provided under any local law enacted pursuant to subsection (f) of section thirteen hundred ten of this chapter, as to their potential eligibility. In making the determination of whether a taxpayer may be eligible for such credit, the commissioner shall use such data as may be appropriate and available, including, but not limited to, data available from the United States Department of Treasury, Internal Revenue Service and New York state income tax returns for preceding tax years. (7) Reports. The commissioner shall prepare a preliminary written report after July thirty-first and a final written report after December thirty-first of each calendar year, which shall contain statistical information regarding the credits granted on or before such dates under this subsection, and under any local law enacted pursuant to subsection (f) of section thirteen hundred ten of this chapter, during such calendar year. Copies of these reports shall be submitted by such commissioner to the governor, the temporary president of the senate, the speaker of the assembly, the chairman of the senate finance committee and the chairman of the assembly ways and means committee within sixty days of July thirty-first with respect to the preliminary report, and within forty-five days of December thirty-first with respect to the final report, and copies of such reports with respect to credits under any local law enacted pursuant to subsection (f) of section thirteen hundred ten of this chapter shall be submitted in addition to the mayor and the speaker of the council of the city where such a local law is in effect. Such reports shall contain, but need not be limited to, the number of credits and the average amount of such credits allowed; and of those, the number of credits and the average amount of such credits allowed to taxpayers in each county; and of those, the number of credits and the average amount of such credits allowed to taxpayers whose earned income falls within ranges, determined by the commissioner, of not more than four thousand dollars; and of those, the number of credits and the average amount of such credits allowed to taxpayers who file under the different statuses set forth in subsections (a), (b) and (c) of section six hundred one of this part; and of those, the number of credits and the average amount of such credits allowed to taxpayers whose number of qualifying children falls within the categories set forth in such section thirty-two of the internal revenue code. (d-1) Enhanced earned income tax credit. (1) A taxpayer described in paragraph two of this subsection shall be allowed a credit equal to the greater of: (A) twenty percent of the amount of the earned income tax credit that would have been allowed to the taxpayer under section 32 of the internal revenue code, absent the application of section 32(b)(2)(B) of such code, if the child or children described in subparagraph (C) of paragraph two of this subsection satisfied the requirements for a qualifying child set forth in section 32(c)(3) of such code, provided however, that the credit shall be calculated as if the taxpayer had only one child; or (B) the product of two and one-half and the amount of the earned income tax credit that would have been allowed to the taxpayer under section 32 of the internal revenue code, if the taxpayer satisfied the eligibility requirements set forth in section 32(c)(1)(A)(ii) of such code. (2) To be allowed a credit under this subsection, a taxpayer must satisfy all of the following qualifications. (A) The taxpayer must be a resident taxpayer. (B) The taxpayer must have attained the age of eighteen. (C) The taxpayer must be the parent of a minor child or children with whom the taxpayer does not reside. (D) The taxpayer must have an order requiring him or her to make child support payments, which are payable through a support collection unit established pursuant to section one hundred eleven-h of the social services law, which order must have been in effect for at least one-half of the taxable year. (E) The taxpayer must have paid an amount in child support in the taxable year at least equal to the amount of current child support due during the taxable year for every order requiring him or her to make child support payments. (3) If the amount of the credit allowed under this subsection shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (4) No claim for credit under this subsection shall be allowed unless the department has verified, from information provided by the office of temporary and disability assistance, that a taxpayer has satisfied the qualifications set forth in subparagraphs (C), (D) and (E) of paragraph two of this subsection. The office of temporary and disability assistance shall provide to the department by January fifteenth of each year information applicable for the immediately preceding tax year necessary for the department to make such verification. Such information shall be provided in the manner and form agreed upon by the department and such office. If a taxpayer's claim for a credit under this subsection is disallowed because the taxpayer has not satisfied the qualifications set forth in subparagraphs (C), (D) and (E) of paragraph two of this subsection, the taxpayer may request a review of those qualifications by the support collection unit established pursuant to section one hundred eleven-h of the social services law through which the child support payments were payable. The support collection unit shall transmit the result of that review to the office of temporary and disability assistance on a form developed by such office. Such office shall then transmit such result to the department in a manner agreed upon by the department and such office. (5) A taxpayer shall not be allowed multiple credits under this subsection for a taxable year even if such taxpayer has more than one child or has more than one order requiring him or her to make child support payments. (6) If a credit is allowed under this subsection and the taxpayer is also allowed a credit under subsection (d) of this section, the taxpayer shall only be allowed to claim one credit. (7) In the report prepared pursuant to paragraph seven of subsection (d) of this section, the commissioner shall include statistical information concerning the credit allowed pursuant to this subsection. Such information shall be limited to the number of credits and the average amount of such credits allowed; and of those, the number of credits and the average amounts of such credits allowed to taxpayers in each county. * (e) Real property tax circuit breaker credit. (1) For purposes of this subsection: (A) "Qualified taxpayer" means a resident individual of the state who has occupied the same residence for six months or more of the taxable year, and is required or chooses to file a return under this article. (B) "Household" or "members of the household" means a qualified taxpayer and all other persons, not necessarily related, who have the same residence and share its furnishings, facilities and accommodations. Such terms shall not include a tenant, subtenant, roomer or boarder who is not related to the qualified taxpayer in any degree specified in paragraphs one through eight of subsection (a) of section one hundred fifty-two of the internal revenue code. Provided, however, no person may be a member of more than one household at one time. (C) "Household gross income" means the aggregate adjusted gross income of all members of the household for the taxable year as reported for federal income tax purposes, or which would be reported as adjusted gross income if a federal income tax return were required to be filed, with the modifications in subsection (b) of section six hundred twelve but without the modifications in subsection (c) of such section, plus any portion of the gain from the sale or exchange of property otherwise excluded from such amount; earned income from sources without the United States excludable from federal gross income by section nine hundred eleven of the internal revenue code; support money not included in adjusted gross income; nontaxable strike benefits; supplemental security income payments; the gross amount of any pension or annuity benefits to the extent not included in such adjusted gross income (including, but not limited to, railroad retirement benefits and all payments received under the federal social security act and veterans' disability pensions); nontaxable interest received from the state of New York, its agencies, instrumentalities, public corporations, or political subdivisions (including a public corporation created pursuant to agreement or compact with another state or Canada); workers' compensation; the gross amount of "loss-of-time" insurance; and the amount of cash public assistance and relief, other than medical assistance for the needy, paid to or for the benefit of the qualified taxpayer or members of his household. Household gross income shall not include surplus foods or other relief in kind or payments made to individuals because of their status as victims of Nazi persecution as defined in P.L. 103-286. Provided, further, household gross income shall only include all such income received by all members of the household while members of such household. (D) "Residence" means a dwelling in this state, whether owned or rented, and so much of the land abutting it, not exceeding one acre, as is reasonably necessary for use of the dwelling as a home, and may consist of a part of a multi-dwelling or multi-purpose building including a cooperative or condominium, and rental units within a single dwelling. Residence includes a trailer or mobile home, used exclusively for residential purposes and defined as real property pursuant to paragraph (g) of subdivision twelve of section one hundred two of the real property tax law. (E) "Qualifying real property taxes" means all real property taxes, special ad valorem levies and special assessments, exclusive of penalties and interest, levied on the residence of a qualified taxpayer and paid during the taxable year. In addition, for taxable years beginning after December thirty-first, nineteen hundred eighty-four, a qualified taxpayer may elect to include any additional amount that would have been levied in the absence of an exemption from real property taxation pursuant to section four hundred sixty-seven of the real property tax law. If tenant-stockholders in a cooperative housing corporation have met the requirements of section two hundred sixteen of the internal revenue code by which they are allowed a deduction for real estate taxes, the amount of taxes so allowable, or which would be allowable if the taxpayer had filed returns on a cash basis, shall be qualifying real property taxes. If a residence is owned by two or more individuals as joint tenants or tenants in common, and one or more than one individual is not a member of the household, qualifying real property taxes is that part of such taxes on the residence which reflects the ownership percentage of the qualified taxpayer and members of his household. If a residence is an integral part of a larger unit, qualifying real property taxes shall be limited to that amount of such taxes paid as may be reasonably apportioned to such residence. If a household owns and occupies two or more residences during different periods in the same taxable year, qualifying real property taxes shall be the sum of the prorated qualifying real property taxes attributable to the household during the periods such household occupies each of such residences. If the household owns and occupies a residence for part of the taxable year and rents a residence for part of the same taxable year, it may include both the proration of qualifying real property taxes on the residence owned and the real property tax equivalent with respect to the months the residence is rented. Provided, however, for purposes of the credit allowed under this subsection, qualifying real property taxes may be included by a qualified taxpayer only to the extent that such taxpayer or the spouse of such taxpayer occupying such residence for six months or more of the taxable year owns or has owned the residence and paid such taxes. (F) "Real property tax equivalent" means twenty-five percent of the adjusted rent actually paid in the taxable year by a household solely for the right of occupancy of its New York residence for the taxable year. If (i) a residence is rented to two or more individuals as cotenants, or such individuals share in the payment of a single rent for the right of occupancy of such residence, and (ii) each of such individuals is a member of a different household, one or more of which individuals shares such residence, real property tax equivalent is that portion of twenty-five percent of the adjusted rent paid in the taxable year which reflects that portion of the rent attributable to the qualified taxpayer and the members of his household. (G) "Adjusted rent" means rental paid for the right of occupancy of a residence, excluding charges for heat, gas, electricity, furnishings and board. Where charges for heat, gas, electricity, furnishing or board are included in rental but where such charges and the amount thereof are not separately set forth in a written rental agreement, for purposes of determining adjusted rent the qualified taxpayer shall reduce rental paid as follows: (i) For heat, or heat and gas, deduct fifteen percent of rental paid. (ii) For heat, gas and electricity, deduct twenty percent of rental paid. (iii) For heat, gas, electricity and furnishings, deduct twenty-five percent of rental paid. (iv) For heat, gas, electricity, furnishings and board, deduct fifty percent of rental paid. If the tax commission determines that the adjusted rent shown on the return is excessive, the tax commission may reduce such rent, for purposes of the computation of the credit, to an amount substantially equivalent to rent for a comparable accommodation. (2) A qualified taxpayer shall be allowed a credit as provided in paragraph three hereof against the taxes imposed by this article reduced by the credits permitted by this article. If the credit exceeds the tax as so reduced for such year under this article the qualified taxpayer may receive, and the comptroller, subject to a certificate of the state tax commission, shall pay as an overpayment, without interest, any excess between such tax as so reduced and the amount of the credit. If a qualified taxpayer is not required to file a return pursuant to section six hundred fifty-one, a qualified taxpayer may nevertheless receive and the comptroller, subject to a certificate of the state tax commission, shall pay as an overpayment the full amount of the credit, without interest. (3) Determination of credit. (A) For qualified taxpayers who have attained the age of sixty-five years before the beginning of or during the taxable year the amount of the credit allowable under this subsection shall be fifty percent, or in the case of a qualified taxpayer who has elected to include an additional amount pursuant to subparagraph (E) of paragraph one of this subsection, twenty-five percent, of the excess of real property taxes or the excess of real property tax equivalent determined as follows: Excess real property taxes are the excess of real property tax equivalent or the excess of qualifying real property taxes over the follow- If household gross income for ing percentage of household gross the taxable year is: income: _____________________________ ____________________________________ $3,000 or less 3 1/2 Over $3,000 but not over $5,000 4 Over $5,000 but not over $7,000 4 1/2 Over $7,000 but not over $9,000 5 Over $9,000 but not over $11,000 5 1/2 Over $11,000 but not over $14,000 6 Over $14,000 but not over $18,000 6 1/2 Notwithstanding the foregoing provisions, the maximum credit determined under this subparagraph may not exceed the amount determined in accordance with the following table: If household gross income The maximum credit is: for the taxable year is: _________________________________ ____________________________________ $1,000 or less $375 Over $1,000 but not over $2,000 $358 Over $2,000 but not over $3,000 $341 Over $3,000 but not over $4,000 $324 Over $4,000 but not over $5,000 $307 Over $5,000 but not over $6,000 $290 Over $6,000 but not over $7,000 $273 Over $7,000 but not over $8,000 $256 Over $8,000 but not over $9,000 $239 Over $9,000 but not over $10,000 $222 Over $10,000 but not over $11,000 $205 Over $11,000 but not over $12,000 $188 Over $12,000 but not over $13,000 $171 Over $13,000 but not over $14,000 $154 Over $14,000 but not over $15,000 $137 Over $15,000 but not over $16,000 $120 Over $16,000 but not over $17,000 $103 Over $17,000 but not over $18,000 $ 86 (B) For all other qualified taxpayers the amount of the credit allowable under this subsection shall be fifty percent of excess real property taxes or the excess of the real property tax equivalent determined as follows: Excess real property taxes are the excess of real property tax equivalent or the excess of qualifying real property taxes over the follow- If household gross income for ing percentage of household gross the taxable year is: income: _____________________________ ____________________________________ $3,000 or less 3 1/2 Over $3,000 but not over $5,000 4 Over $5,000 but not over $7,000 4 1/2 Over $7,000 but not over $9,000 5 Over $9,000 but not over $11,000 5 1/2 Over $11,000 but not over $14,000 6 Over $14,000 but not over $18,000 6 1/2 Notwithstanding the foregoing provisions, the maximum credit determined under this subparagraph may not exceed the amount determined in accordance with the following table: If household gross income for the taxable year is: The maximum credit is: ______________________________ ____________________________________ $1,000 or less $75 Over $1,000 but not over $2,000 $73 Over $2,000 but not over $3,000 $71 Over $3,000 but not over $4,000 $69 Over $4,000 but not over $5,000 $67 Over $5,000 but not over $6,000 $65 Over $6,000 but not over $7,000 $63 Over $7,000 but not over $8,000 $61 Over $8,000 but not over $9,000 $59 Over $9,000 but not over $10,000 $57 Over $10,000 but not over $11,000 $55 Over $11,000 but not over $12,000 $53 Over $12,000 but not over $13,000 $51 Over $13,000 but not over $14,000 $49 Over $14,000 but not over $15,000 $47 Over $15,000 but not over $16,000 $45 Over $16,000 but not over $17,000 $43 Over $17,000 but not over $18,000 $41 (4) If a qualified taxpayer occupies a residence for a period of less than twelve months during the taxable year or occupies two or more residences during different periods in such taxable year, the credit allowed pursuant to this subsection shall be computed in such manner as the tax commission may, by regulation, prescribe in order to properly reflect the credit or portion thereof attributable to such residence or residences and such period or periods. (5) The tax commission may prescribe that the credit under this subsection shall be determined in whole or in part by the use of tables prescribed by such commission. Such tables shall set forth the credit to the nearest dollar. (6) Only one credit per household and per qualified taxpayer shall be allowed per taxable year under this subsection. When two or more members of a household are able to meet the qualifications for a qualified taxpayer, the credit shall be equally divided between or among such individuals unless such individuals file with the tax commission a written agreement among such individuals setting forth a different division. Where two or more members of a household are able to meet the qualifications of a qualified taxpayer and one of them is sixty-five years of age or more, the credit which may be taken shall be the credit applicable to individuals who have attained the age of sixty-five years. (A) Provided, however, where a joint income tax return has been filed pursuant to the provisions of section six hundred fifty-one by a qualified taxpayer and his spouse (or where both spouses are qualified taxpayers and have filed such joint return), the credit, or the portion of the credit if divided, to which the husband and wife are entitled shall be applied against the tax of both spouses and any overpayment shall be made to both spouses. (B) Where any return required to be filed pursuant to the provisions of section six hundred fifty-one is combined with any return of tax imposed pursuant to the authority of this chapter or any other law if such tax is administered by the tax commission, the credit or the portion of the credit if divided, allowed to the qualified taxpayer may be applied by the tax commission toward any liability for the aforementioned taxes. (7) No credit shall be granted under this subsection: (A) If household gross income for the taxable year exceeds eighteen thousand dollars. (B) To a property owner unless: (i) the property is used for residential purposes, (ii) not more than twenty percent of the rental income, if any, from the property is from rental for nonresidential purposes and (iii) the property is occupied as a residence in whole or in part by one or more of the owners of the property. (C) To a property owner who owns real property, the full value of which exceeds eighty-five thousand dollars. (D) To a tenant if the adjusted rent for the residence exceeds four hundred fifty dollars per month on average. (E) To an individual with respect to whom a deduction under subsection (c) of section one hundred fifty-one of the internal revenue code is allowable to another taxpayer for the taxable year. (F) With respect to a residence that is wholly exempted from real property taxation. (G) To an individual who is not a resident individual of the state for the entire taxable year. (8) The right to claim a credit or the portion of a credit, where such credit has been divided under this subsection, shall be personal to the qualified taxpayer and shall not survive his death, but such right may be exercised on behalf of a claimant by his legal guardian or attorney in fact during his lifetime. (9) Returns. If a qualified taxpayer is not required to file a return pursuant to section six hundred fifty-one, a claim for a credit may be taken on a return filed with the tax commission within three years from the time it would have been required that a return be filed pursuant to such section had the qualified taxpayer had a taxable year ending on December thirty-first. Returns under this paragraph shall be in such form as shall be prescribed by the tax commission, which shall make available such forms and instructions for filing such returns. (10) Proof of claim. The tax commission may require a qualified taxpayer to furnish the following information in support of his claim for credit under this subsection: household gross income, rent paid, name and address of owner or managing agent of the property rented, real property taxes levied or that would have been levied in the absence of an exemption from real property tax pursuant to section four hundred sixty-seven of the real property tax law, the names of members of the household and other qualifying taxpayers occupying the same residence and their identifying numbers including social security numbers, household gross income, size and nature of property claimed as residence and all other information which may be required by the tax commission to determine the credit. (11) Administration. The provisions of this article, including the provisions of section six hundred fifty-three, six hundred fifty-eight, and six hundred fifty-nine and the provisions of part six of this article relating to procedure and administration, including the judicial review of the decisions of the tax commission, except so much of section six hundred eighty-seven which permits a claim for credit or refund to be filed after the period provided for in paragraph nine of this subsection and except sections six hundred fifty-seven, six hundred eighty-eight and six hundred ninety-six, shall apply to the provisions of this subsection in the same manner and with the same force and effect as if the language of those provisions had been incorporated in full into this subsection and had expressly referred to the credit allowed or returns filed under this subsection, except to the extent that any such provision is either inconsistent with a provision of this subsection or is not relevant to this subsection. As used in such sections and such part, the term "taxpayer" shall include a qualified taxpayer under this subsection and, notwithstanding the provisions of subsection (e) of section six hundred ninety-seven, where a qualified taxpayer has protested the denial of a claim for credit under this subsection and the time to file a petition for redetermination of a deficiency or for refund has not expired, he shall, subject to such conditions as may be set by the tax commission, receive such information (A) which is contained in any return filed under this article by a member of his household for the taxable year for which the credit is claimed, and (B) which the tax commission finds is relevant and material to the issue of whether such claim was properly denied. The tax commission shall have the authority to promulgate such rules and regulations as may be necessary for the processing, determination and granting of credits and refunds under this subsection. (12) The commissioner may request the cooperation of the state board of real property services in carrying out the provisions of this subsection. Such board may promulgate such rules and regulations, subject to prior consultation with the commissioner, as may be necessary to provide such assistance with respect to the determination of full value of real property for purposes of the credit allowed under this subsection. (13) Notwithstanding any other provision of this article, the credit allowed under this subsection shall be determined after the determination and application of any other credits permitted under the provisions of this article. (14) The commissioner of taxation and finance shall prepare a preliminary written report after July thirty-first and a final written report after December thirty-first of each calendar year, which shall contain statistical information regarding the credits granted on or before such dates under this subsection during such calendar year. Copies of these reports shall be submitted by such commissioner to the governor, the temporary president of the senate, the speaker of the assembly, the chairman of the senate finance committee and the chairman of the assembly ways and means committee within sixty days of July thirty-first with respect to the preliminary report, and within forty-five days of December thirty-first with respect to the final report. Such reports shall contain, but need not be limited to, the number of credits and the average amount of such credits allowed; and of those, the number of credits and the average amount of such credits allowed to qualified taxpayers in each county; and of those, the number of credits and the average amount of such credits allowed to qualified taxpayers whose household gross income falls within each of the household gross income ranges set forth in paragraph three of this subsection; and of those, the number of credits and the average amount of such credits allowed to qualified taxpayers whose credit amount falls within credit amount ranges set forth in twenty-five dollar increments. * NB Applies to taxable years beginning after 1986 (e-1) Volunteer firefighters' and ambulance workers' credit. (1) For taxable years beginning on and after January first, two thousand seven, a resident taxpayer who serves as an active volunteer firefighter as defined in subdivision one of section two hundred fifteen of the general municipal law or as a volunteer ambulance worker as defined in subdivision fourteen of section two hundred nineteen-k of the general municipal law shall be allowed a credit against the tax imposed by this article equal to two hundred dollars. In order to receive this credit a volunteer firefighter or volunteer ambulance worker must have been active for the entire taxable year for which the credit is sought. (2) If a taxpayer receives a real property tax exemption relating to such service under title two of article four of the real property tax law, such taxpayer shall not be eligible for this credit. (3) In the case of a husband and wife who file a joint return and who both individually qualify for the credit under this subsection, the amount of the credit allowed shall be four hundred dollars. (4) If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (f) Credit for the special additional mortgage recording tax. * (1) For taxable years beginning before nineteen hundred eighty-eight, a taxpayer shall be allowed a credit, to be credited against the tax imposed by this article, after allowance of any other credit provided under this section and any credits permitted under sections six hundred twenty, six hundred twenty-one and six hundred forty of this article. The amount of the credit shall be the amount of the special additional mortgage recording tax paid by the taxpayer pursuant to the provisions of subdivision one-a of section two hundred fifty-three of this chapter on mortgages recorded on and after January first, nineteen hundred seventy-nine. Provided, however, no credit shall be allowed with respect to a mortgage of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in one or more of the counties comprising the metropolitan commuter transportation district and where the mortgage is recorded on or after May first, nineteen hundred eighty-seven. Provided, however, no credit shall be allowed with respect to a mortgage of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in the county of Erie and where the mortgage is recorded on or after May first, nineteen hundred eighty-seven. * NB Applies to taxable years beginning prior to 1988 * (1) For taxable years beginning before nineteen hundred eighty-eight, a taxpayer shall be allowed a credit, to be credited against the tax imposed by this article, after allowance of any other credit provided under this section and any credits permitted under sections six hundred twenty, six hundred twenty-one and six hundred thirty-five of this article. The amount of the credit shall be the amount of the special additional mortgage recording tax paid by the taxpayer pursuant to the provisions of subdivision one-a of section two hundred fifty-three of this chapter on mortgages recorded on and after January first, nineteen hundred seventy-nine. Provided, however, no credit shall be allowed with respect to a mortgage of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in one or more of the counties comprising the metropolitan commuter transportation district and where the mortgage is recorded on or after May first, nineteen hundred eighty-seven. Provided, however, no credit shall be allowed with respect to a mortgage of real property principally improved or to be improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in the county of Erie and where the mortgage is recorded on or after May first, nineteen hundred eighty-seven. * NB Applies to taxable years beginning after 1987 (2) In no event shall the amount of the credit herein provided for be allowed in excess of the taxpayer's tax for such year. However, if the amount of credit otherwise allowable under this subsection for any taxable year results in such excess amount, any amount of credit not deductible in such taxable year may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. (3)(A) Notwithstanding the provisions of paragraphs one and two of this subsection, for taxable years beginning after two thousand three, a taxpayer shall be allowed a credit, to be credited against the tax imposed by this article, equal to the amount of the special additional mortgage recording tax paid by the taxpayer or, in the case of a taxpayer who is a partner in a partnership, the partner's pro rata share of the amount of the special additional mortgage recording tax paid by the partnership, pursuant to the provisions of subdivision one-a of section two hundred fifty-three of this chapter on mortgages recorded on and after January first, two thousand four. Provided, however, no credit shall be allowed with respect to a mortgage of real property principally improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in one or more of the counties comprising the metropolitan commuter transportation district and where the mortgage is recorded on or after January first, two thousand four. Provided further, no credit shall be allowed with respect to a mortgage of real property principally improved by one or more structures containing in the aggregate not more than six residential dwelling units, each dwelling unit having its own separate cooking facilities, where the real property is located in Erie county and where the mortgage is recorded on or after January first, two thousand four. (B) If the amount of credit allowable under this paragraph for any taxable year exceeds the taxpayer's tax for such year, any amount of credit exceeding such tax may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. Provided further, such taxpayer may elect to treat such unused amount of credit as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article except that no interest shall be paid on such overpayment. (g) Credit for solar and wind energy systems. (1) A taxpayer shall be allowed a credit for taxable years beginning on or after January first, nineteen hundred eighty-one and ending before December thirty-first, nineteen hundred eighty-six against the tax imposed by this article for the purchase and installation of a solar or wind energy system by a taxpayer in his principal residence, if such residence is located within the state. The amount of the credit shall be fifty-five percent of the expenditure incurred in purchasing and installing any such system or combination thereof, but not to exceed the maximum credit of two thousand seven hundred fifty dollars. (2) A solar or wind system is a system whose original use begins with the taxpayer; which meets the eligibility criteria, if any, prescribed by the department of taxation and finance; and which is: (A) an active solar energy system which shall mean an arrangement or combination of components designed to provide heating, cooling, hot water or electricity through the process of collecting solar radiation, converting it to another form of energy, storing the converted energy, protecting against unnecessary dissipation and distributing the converted energy, and which requires external mechanical power for operation. This term shall not include pipes, controls, insulation or other equipment which are part of the conventional heating, cooling, insulation or electrical system of a building; nor shall it include any expenditure allocable to a swimming pool used as a storage medium; (B) a passive solar energy system, which shall mean a system which relies upon the original or retrofitted design and elements of a building to enhance the use of natural forces including solar radiation, winds and night-time coolness to provide heating, cooling or hot water through the process of collecting solar radiation, converting it to another form of energy, storing the converted energy, protecting against unnecessary dissipation and distributing the converted energy, and which is not primarily dependent upon mechanical power for operation. This term shall not include pipes, controls, insulation or other equipment which are part of the conventional heating, cooling or insulation system of the building; nor shall it include any expenditure allocable to a swimming pool used as a storage medium; or (C) a wind energy system, which shall mean an arrangement or combination of components, including power conditioning equipment, designed to provide electricity or mechanical energy through the process of converting wind energy into mechanical and/or electric energy, and storing or distributing such energy. (3) Where a solar or wind energy system is purchased and installed by a condominium management association or a cooperative housing corporation, a taxpayer who is a member of the condominium management association or who is a tenant-stockholder in the cooperative housing corportion may for the purpose of this subsection claim a proportionate share of the total expense as the expenditure for the purposes of the credit attributable to his principal residence. (4) Where a solar or wind system is purchased and installed in a principal residence shared by two or more taxpayers the amount of the credit allowable under this subsection for each such taxpayer shall be prorated according to the percentage of the total expenditure for such system contributed by each taxpayer. (5) To the extent that a federal income tax credit shall apply to expenditures eligible for a credit under this subsection, the credit provided in this subsection shall be reduced so that the combined credit shall not exceed fifty-five percent of such expenditures or six thousand seven hundred fifty dollars, whichever is less. (6) If the amount of credit allowable under this subsection shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. (7) If all or any part of the credit provided for under this subsection was allowed or carried over from a prior taxable year or years, a taxpayer shall reduce the allowable credit for additional qualifying expenditures in a subsequent tax year by the amount of the credit previously allowed or carried over; provided however that a credit previously allowed or carried over from a prior taxable year or years shall not be taken into account in determining the allowable credit for the purchase and installation of a solar or wind energy system in a subsequent principal residence. (8) For the purpose of determining the amount of the actual expenditure incurred in purchasing and installing a solar or wind energy system, the amount of any federal, state or local grant received by the taxpayer, which was used for the purchase and/or installation of such system and which was not included in the gross income of the taxpayer, shall not be taken into account. * (9) Notwithstanding any other provision of law, if a credit is allowed under this subsection for a renewable energy system with respect to any property, the increase in the basis of such property which would but for this subsection result from such expenditure shall be reduced by the amount of the credit allowed. * NB Applies to taxable years prior to December 31, 1986 * (9) Notwithstanding any other provision of law, if a credit is allowed under this subsection for a renewable energy system with respect to any property, the increase in the basis of such property which would but for this subsection result from such expenditure shall be reduced by the amount of the credit allowed. When the sale or other disposition of such property results in the nonrecognition of gain under section one thousand thirty-four of the internal revenue code, a like reduction shall be made to the basis of the new residence, if such residence is located within the state. * NB Applies to taxable years beginning after December 31, 1986 (g-1) Solar energy system equipment credit. (1) General. An individual taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty-five percent of qualified solar energy system equipment expenditures. This credit shall not exceed three thousand seven hundred fifty dollars for qualified solar energy equipment placed in service before September first, two thousand six, and five thousand dollars for qualified solar energy equipment placed in service on or after September first, two thousand six. (2) Qualified solar energy system equipment expenditures. (A) The term "qualified solar energy system equipment expenditures" means expenditures for the purchase of solar energy system equipment which is installed in connection with residential property which is (i) located in this state and (ii) which is used by the taxpayer as his or her principal residence at the time the solar energy system equipment is placed in service. (B) Such qualified expenditures shall include expenditures for materials, labor costs properly allocable to on-site preparation, assembly and original installation, architectural and engineering services, and designs and plans directly related to the construction or installation of the solar electric generating equipment. (C) Such qualified expenditures shall not include interest or other finance charges. (3) Solar energy system equipment. The term "solar energy system equipment" shall mean an arrangement or combination of components utilizing solar radiation, which, when installed in a residence, produces energy designed to provide heating, cooling, hot water or electricity for use in such residence. Such arrangement or components shall not include equipment connected to solar energy system equipment that is a component of part or parts of a non-solar energy system or which uses any sort of recreational facility or equipment as a storage medium. Solar energy system equipment that generates electricity for use in a residence must conform to applicable requirements set forth in section sixty-six-j of the public service law. (4) Multiple taxpayers. Where solar energy system equipment is purchased and installed in a principal residence shared by two or more taxpayers, the amount of the credit allowable under this subsection for each such taxpayer shall be prorated according to the percentage of the total expenditure for such solar energy system equipment contributed by each taxpayer. (5) Grants. For purposes of determining the amount of the expenditure incurred in purchasing and installing solar energy system equipment, the amount of any federal, state or local grant received by the taxpayer, which was used for the purchase and/or installation of such equipment and which was not included in the federal gross income of the taxpayer, shall not be included in the amount of such expenditures. (6) When credit allowed. The credit provided for herein shall be allowed with respect to the taxable year, commencing after nineteen hundred ninety-seven, in which the solar energy system equipment is placed in service. (7) Carryover of credit. If the amount of the credit, and carryovers of such credit, allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, such excess amount may be carried over to the five taxable years next following the taxable year with respect to which the credit is allowed and may be deducted from the taxpayer's tax for such year or years. (g-2) Fuel cell electric generating equipment credit. (1) General. An individual taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of qualified fuel cell electric generating equipment expenditures. This credit shall not exceed one thousand five hundred dollars per generating unit with respect to any taxable year. The credit provided for herein shall be allowed with respect to the taxable year in which the fuel cell electric generating equipment is placed in service. (2) Qualified fuel cell electric generating equipment expenditures. (A) Qualified fuel cell electric generating equipment expenditures are the costs, incurred on or after July first, two thousand five, associated with the purchase of on-site electricity generation systems utilizing proton exchange membrane fuel cells, providing a rated baseload capacity of no less than one kilowatt and no more than one hundred kilowatts of electricity, which are located in this state at the time the qualified fuel cell electric generating equipment is placed in service. (B) Qualified fuel cell electric generating equipment expenditures shall also include costs, incurred on or after July first, two thousand five, for materials, labor for on-site preparation, assembly and original installation, engineering services, designs and plans directly related to construction or installation and utility compliance costs. (C) Such qualified expenditures shall not include interest or other finance charges. (3) Multiple taxpayers. Where fuel cell electric generating equipment is purchased and installed in a principal residence shared by two or more taxpayers, the amount of the credit allowable under this subsection for each such taxpayer shall be prorated according to the percentage of the total expenditure for such fuel cell electric generating equipment contributed by each taxpayer. (4) Grants. For purposes of determining the amount of the expenditure incurred in purchasing and installing fuel cell electric generating equipment, the amount of any federal, state or local grant received by the taxpayer, which was used for the purchase and/or installation of such equipment and which was not included in the federal gross income of the taxpayer, shall not be included in the amount of such expenditures. (5) Carryover of credit. If the amount of the credit, and carryovers of such credit, allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, such excess amount may be carried over to the five taxable years next following the taxable year with respect to which the credit is allowed and may be deducted from the taxpayer's tax for such year or years. (h) Research and development tax credit. * (1) For taxable years commencing prior to January first, nineteen hundred eighty-seven, a taxpayer shall be allowed a credit against the tax imposed by this article after allowance of any other credit provided under this section and any credits permitted under sections six hundred twenty, six hundred twenty-one and six hundred forty of this article. The amount of the credit shall be ten percent of the cost or other basis for federal income tax purposes of tangible personal property, including buildings and other structural components of buildings, described in paragraph two of this subsection acquired, constructed or reconstructed, or erected after June thirtieth, nineteen hundred eighty-two. * NB Applies to taxable years prior to 1988 * (1) For taxable years commencing prior to January first, nineteen hundred eighty-seven, a taxpayer shall be allowed a credit against the tax imposed by this article after allowance of any other credit provided under this section and any credits permitted under sections six hundred twenty, six hundred twenty-one and six hundred thirty-five of this article. The amount of the credit shall be ten percent of the cost or other basis for federal income tax purposes of tangible personal property, including buildings and other structural components of buildings, described in paragraph two of this subsection acquired, constructed or reconstructed, or erected after June thirtieth, nineteen hundred eighty-two. * NB Applies to taxable years beginning after 1987 * (2) A credit shall be allowed under this section with respect to tangible personal property and other tangible property, including buildings and structural components of buildings which are: depreciable pursuant to section one hundred sixty-seven of the internal revenue code, have a useful life of four years or more, are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, have a situs in this state and are used or are to be used for purposes of research and development in the experimental or laboratory sense. Such purposes shall not be deemed to include the ordinary testing or inspection of materials or products for quality control, efficiency surveys, management studies, consumer surveys, advertising, promotions, or research in connection with literary, historical or similar projects. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply (3) A taxpayer shall not be allowed a credit under this subsection with respect to any property described in paragraphs one and two of this subsection, if such property qualifies for the modification allowed under either paragraph three or paragraph four of subsection (g) of section six hundred twelve whether or not such amount shall have been subtracted, or if a credit is taken pursuant to subsection (a) of this section. Provided, however, with respect to property which qualifies under either clause (A), (B) or (C) of paragraph four of subsection (g) because such property was ordered on or before December thirty-first, nineteen hundred sixty-eight, but with respect to which no expenditure has been paid or incurred at such date, the taxpayer may elect to subtract the amount allowable under clause (A), (B) or (C) or may take the credit provided by this subsection, but not both. (4) A taxpayer shall not be allowed a credit under this subsection with respect to tangible personal property and other tangible property, including buildings and structural components of buildings, which it leases to any other person or corporation. For purposes of the preceding sentence, any contract or agreement to lease or rent or for a license to use such property shall be considered a lease. Provided, however, in determining whether a taxpayer shall be allowed a credit under this subsection with respect to such property, any election made with respect to such property pursuant to the provisions of paragraph eight of subsection (f) of section one hundred sixty-eight of the internal revenue code, as such paragraph was in effect for agreements entered into prior to January first, nineteen hundred eighty-four, shall be disregarded. (5) If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years but in no event shall such credit be carried over to taxable years commencing on or after January first, nineteen hundred ninety-four. (6) * (A) With respect to property which is depreciable pursuant to section one hundred sixty-seven of the internal revenue code but is not subject to the provisions of section one hundred sixty-eight of such code, and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to the months of useful life. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subparagraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For purposes of this subparagraph, useful life of property shall be the same as the taxpayer uses for depreciation purposes when computing his federal income tax liability. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply * (B) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to three-year property, as defined in subsection (e) of section one hundred sixty-eight of the internal revenue code, which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to thirty-six. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of thirty-six months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to thirty-six. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply * (C) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to property subject to the provisions of section one hundred sixty-eight of the internal revenue code other than three-year property as defined in subsection (e) of such section one hundred sixty-eight, which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to sixty. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of sixty months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to sixty. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply for taxable years commencing after December 31, 1986 * (D) With respect to any property to which section one hundred sixty-eight of the internal revenue code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under the internal revenue code, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subparagraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply (i) S corporation credits. (1) For purposes of determining the application under this section of the credit provisions enumerated in the following table, a shareholder of a New York S corporation: (A) shall be treated as the taxpayer with respect to his or her pro rata share of the corresponding credit base of such corporation, determined for the corporation's taxable year ending with or within the shareholder's taxable year and (B) shall be treated as the owner of a new business with respect to such share if the corporation qualifies as a new business pursuant to paragraph (j) of subdivision twelve of section two hundred ten of this chapter. The corporation's With respect to the credit base under following credit section two hundred ten under this section: or section fourteen hundred fifty-six of this chapter is: Investment tax credit Investment credit base under subsection (a) or qualified rehabilitation expenditures under subdivision twelve of section two hundred ten Empire zone Cost or other basis investment tax credit under subdivision under subsection (j) twelve-B of section two hundred ten Empire zone Eligible wages under wage tax credit subdivision nineteen of under subsection (k) section two hundred ten or subsection (e) of section fourteen hundred fifty-six Empire zone Qualified investments capital tax credit and contributions under under subsection (l) subdivision twenty of section two hundred ten or subsection (d) of section fourteen hundred fifty-six Agricultural property tax Allowable school credit under subsection (n) district property taxes under subdivision twenty-two of section two hundred ten Credit for employment Qualified first-year wages or of persons with dis- qualified second-year wages abilities under under subdivision subsection (o) twenty-three of section two hundred ten or subsection (f) of section fourteen hundred fifty-six Employment incentive Applicable investment credit credit under subsec- base under subdivision tion (a-1) twelve-D of section two hundred ten Empire zone Applicable investment employment credit under sub- incentive credit under division twelve-C subsection (j-1) of section two hundred ten Alternative fuels credit Cost under subdivision under subsection (p) twenty-four of section two hundred ten Qualified emerging Applicable credit base technology company under subdivision twelve-E employment credit of section two hundred ten under subsection (q) Qualified emerging Qualified investments under technology company subdivision twelve-F of capital tax credit section two hundred ten under subsection (r) Credit for purchase of an Cost of an automated automated external defibrillator external defibrillator under under subsection (s) subdivision twenty-five of section two hundred ten or subsection (j) of section fourteen hundred fifty-six Low-income housing Credit amount under credit under subsection (x) subdivision thirty of section two hundred ten or subsection (l) of section fourteen hundred fifty-six Credit for transportation Amount of credit under sub- improvement contributions division thirty-two of section under subsection (z) two hundred ten or subsection (n) of section fourteen hundred fifty-six *IMB credit for energy Amount of credit taxes under sub- under subdivision section (t-1) twenty-six-a of section two hundred ten QEZE credit for real property Amount of credit under taxes under subsection (bb) subdivision twenty-seven of section two hundred ten or subsection (o) of section fourteen hundred fifty-six QEZE tax reduction credit Amount of benefit period under subsection (cc) factor, employment increase factor and zone allocation factor (without regard to pro ration) under subdivision twenty-eight of section two hundred ten or subsection (p) of section fourteen hundred fifty-six and amount of tax factor as determined under subdivision (f) of section sixteen Green building credit Amount of green building credit under subsection (y) under subdivision thirty-one of section two hundred ten or subsection (m) of section fourteen hundred fifty-six Credit for long-term Qualified costs under care insurance premiums subdivision twenty-five-a of under subsection (aa) section two hundred ten or subsection (k) of section fourteen hundred fifty-six Brownfield redevelopment Amount of credit credit under subsection under subdivision (dd) thirty-three of section two hundred ten or subsection (q) of section fourteen hundred fifty-six Remediated brownfield Amount of credit under credit for real property subdivision thirty-four taxes for qualified of section two hundred sites under subsection ten or subsection (r) of (ee) section fourteen hundred fifty-six Environmental Amount of credit under remediation subdivision thirty-five of insurance credit under section two hundred subsection (ff) ten or subsection (s) of section fourteen hundred fifty-six *Empire state film production Amount of credit for qualified credit under subsection (gg) production costs in production of a qualified film under subdivision thirty-six of section two hundred ten Qualified emerging Qualifying expenditures and technology company facilities, development activities under operations and training credit subdivision twelve-G of section under subsection (nn) two hundred ten Security training tax Amount of credit credit under under subdivision thirty-seven subsection (ii) of section two hundred ten or under subsection (t) of section fourteen hundred fifty-six Credit for qualified fuel Amount of credit under cell electric generating equipment subdivision thirty-seven expenditures under subsection (g-2) of section two hundred ten or subsection (t) of section fourteen hundred fifty-six *Empire state commercial production Amount of credit for qualified credit under subsection (jj) production costs in production of a qualified commercial under subdivision thirty-eight of sec- tion two hundred ten Biofuel production Amount of credit tax credit under under subdivision subsection (jj) thirty-eight of section two hundred ten *IMB tax credit expires January 1, 2007 *Empire state film production credit expires August 20, 2008 *Empire state commercial production credit is repealed December 31, 2011 (2) The reduction of a shareholder's proportionate interest in the corporation shall be treated as a disposition of property for which a redetermination of credit is required under subsections (a), (j) and (l) of this section. (3) Transition provisions relating to S corporation credits allowed for taxable years beginning before nineteen hundred ninety-four. (A) Credit carryover. Any excess credit under subparagraph (A) of paragraph one of this subsection, as it was in effect for taxable years beginning before nineteen hundred ninety-four, may be carried over to the shareholder's following year or years and may be deducted from such shareholder's tax for such year or years, except that any excess credit attributable to subdivision twelve of section two hundred ten of this chapter shall in no event be carried over beyond the ten taxable years next following the taxable year of origin. (B) Credit recapture. Any redetermination of credit required by this subsection as it was in effect for taxable years beginning before nineteen hundred ninety-four, upon disposition or cessation of qualified use of property pursuant to paragraph (g) of subdivision twelve, paragraph (f) of subdivision twelve-B or paragraph (f) of subdivision eighteen of section two hundred ten of this chapter shall be attributed in pro rata shares to the shareholders who were allowed credit under this subsection with respect to such property, and the reduction of a shareholder's proportionate stock interest shall be treated as a disposition of property for which a redetermination of credit under such paragraphs is required with respect to such shareholder. (4) Transition provisions relating to credit for special additional mortgage recording tax. In the case of the special additional mortgage recording tax credit, in addition to any carryover thereof under paragraph three of this subsection (relating to carryover from taxable years of the shareholder beginning before nineteen hundred ninety-four), there also shall be allowed a credit for such tax which is due and paid by an S corporation in a taxable year of the corporation beginning in nineteen hundred ninety-three, which year ends within the shareholder's taxable year beginning in nineteen hundred ninety-four. Any such credit, and carryover thereof, shall be allowed as provided under this subsection as it was in effect for taxable years beginning before nineteen hundred ninety-four. (j) Empire zone investment tax credit (EZ-ITC). (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article where the taxpayer has been certified pursuant to article eighteen-B of the general municipal law. The amount of such credit shall be eight percent of the cost or other basis for federal income tax purposes of tangible personal property and other tangible property, including buildings and structural components of buildings, described in paragraph two of this subsection, which is located within an empire zone designated as such pursuant to article eighteen-B of such law, but only if the acquisition, construction, reconstruction or erection of such property occurred or was commenced on or after the date of such designation and prior to the expiration thereof. Provided, however, that in the case of an acquisition, construction, reconstruction or erection which was commenced during such period and continued or completed subsequently, the credit shall be eight percent of the portion of the cost or other basis for federal income tax purposes attributable to such period, which portion shall be ascertained by multiplying such cost or basis by a fraction the numerator of which shall be the expenditures paid or incurred during such period for such purposes and the denominator of which shall be the total of all expenditures paid or incurred for such acquisition, construction, reconstruction or erection. * (2) A credit shall be allowed under this subsection with respect to tangible personal property and other tangible property, including buildings and structural components of buildings which: (A) are depreciable pursuant to section one hundred sixty-seven of the internal revenue code, (B) have a useful life of four years or more, (C) are acquired by purchase as defined in section one hundred seventy-nine (d) of the internal revenue code, (D) have a situs in an empire zone designated as such pursuant to article eighteen-B of the general municipal law, and (E) are (i) principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing, (ii) industrial waste treatment facilities or air pollution control facilities used in the taxpayer's trade or business, (iii) research and development property, (iv) principally used in the ordinary course of the taxpayer's trade or business as a broker or dealer in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of stocks, bonds or other securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code, or of commodities as defined in section four hundred seventy-five (e) of the Internal Revenue Code, or (v) principally used in the ordinary course of the taxpayer's trade or business of providing investment advisory services for a regulated investment company as defined in section eight hundred fifty-one of the Internal Revenue Code, or lending, loan arrangement or loan origination services to customers in connection with the purchase or sale (which shall include but not be limited to the issuance, entering into, assumption, offset, assignment, termination, or transfer) of securities as defined in section four hundred seventy-five (c)(2) of the Internal Revenue Code. For purposes of clauses (iv) and (v) of this subparagraph, property purchased by a taxpayer affiliated with a regulated broker or dealer is allowed a credit under this subsection if the property is used by its affiliated regulated broker or dealer in accordance with this subsection. Provided, however, a taxpayer shall not be allowed the credit provided by clauses (iv) and (v) of this subparagraph unless all or a substantial portion of the employees performing the administrative and support functions resulting from or related to the qualifying uses of such equipment are located in this state. For purposes of this subsection, the term "goods" shall not include electricity. For purposes of this paragraph, manufacturing shall mean the process of working raw materials into wares suitable for use or which gives new shapes, new quality or new combination to matter which already has gone through some artificial process by the use of machinery, tools, appliances and other similar equipment. Property used in the production of goods shall include machinery, equipment or other tangible property which is principally used in the repair and service of other machinery, equipment or other tangible property used principally in the production of goods and shall include all facilities used in the production operation, including storage of material to be used in production and of the products that are produced. For purposes of this paragraph, the terms "research and development property", "industrial waste treatment facilities", and "air pollution control facilities" shall have the meanings ascribed thereto by clauses (ii), (iii) and (iv), respectively, of subparagraph (B) of paragraph two of subsection (a) of this section, and the provisions of subparagraph (C) of such paragraph two shall apply. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply (3) A taxpayer shall not be allowed a credit under this subsection with respect to any tangible personal property and other tangible property, including buildings and structural components of buildings, which it leases to any other person or corporation except where a taxpayer leases property to an affiliated regulated broker or dealer that uses such property in accordance with clause (iv) or (v) of subparagraph (E) of paragraph two of this subsection. For purposes of the preceding sentence, any contract or agreement to lease or rent or for a license to use such property shall be considered a lease. Provided, however, in determining whether a taxpayer shall be allowed a credit under this subsection with respect to such property, any election made with respect to such property pursuant to the provisions of paragraph eight of subsection (f) of section one hundred sixty-eight of the internal revenue code, as such paragraph was in effect for agreements entered into prior to January first, nineteen hundred eighty-four, shall be disregarded. (4) If the amount of credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. In lieu of carrying over any such excess, a taxpayer who qualifies as an owner of a new business for purposes of paragraph ten of subsection (a) of this section may, at his option, receive fifty percent of such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (5) At the option of the taxpayer, air or water pollution control facilities which qualify for elective modifications under subsection (h) of section six hundred twelve, or research and development facilities which qualify for elective modification under paragraphs three and four of subsection (g) of section six hundred twelve, or property which qualifies for the credit provided under subsection (a) or (h) of this section may be treated as property principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, mining, refining, extracting, farming, agriculture, horticulture, floriculture, viticulture, or commercial fishing, provided the property otherwise qualifies under paragraph two of this subsection, in which event a deduction shall not be allowed under such subsection (h) or such paragraphs three and four of subsection (g) and a credit shall not be allowed under such subsection (a) or (h). * (6) (A) With respect to property which is depreciable pursuant to section one hundred sixty-seven of the internal revenue code but is not subject to the provisions of section one hundred sixty-eight of such code and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this section which represents the ratio which the months of qualified use bear to the months of useful life. If the property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of its useful life, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subsection. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the months of useful life. For purposes of this subsection, useful life of property shall be the same as the taxpayer uses for depreciation purposes when computing his federal income tax liability. (B) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to three-year property, as defined in subsection (e) of section one hundred sixty-eight of the internal revenue code, which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to thirty-six. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of thirty-six months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to thirty-six. (C) Except with respect to that property to which subparagraph (D) of this paragraph applies, with respect to property subject to the provisions of section one hundred sixty-eight of the internal revenue code other than three-year property as defined in subsection (e) of such section one hundred sixty-eight of the internal revenue code which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to sixty. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of sixty months, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to sixty. (D) With respect to any property to which section one hundred sixty-eight of the internal revenue code applies, which is a building or a structural component of a building and which is disposed of or ceases to be in qualified use prior to the end of the taxable year in which the credit is to be taken, the amount of the credit shall be that portion of the credit provided for in this subsection which represents the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. If property on which credit has been taken is disposed of or ceases to be in qualified use prior to the end of the period over which the taxpayer chooses to deduct the property under the internal revenue code, the difference between the credit taken and the credit allowed for actual use must be added back in the year of disposition. Provided, however, if such property is disposed of or ceases to be in qualified use after it has been in qualified use for more than twelve consecutive years, it shall not be necessary to add back the credit as provided in this subparagraph. The amount of credit allowed for actual use shall be determined by multiplying the original credit by the ratio which the months of qualified use bear to the total number of months over which the taxpayer chooses to deduct the property under the internal revenue code. (E) For purposes of this paragraph, disposal or cessation of qualified use shall not be deemed to have occurred solely by reason of the termination or expiration of an empire zone's designation as such. (F)(i) For purposes of this paragraph, the decertification of a business enterprise with respect to an empire zone shall constitute a disposal or cessation of qualified use of the property on which the credit was taken which is located in the zone to which the decertification applies, on the effective date of such decertification. (ii) Where a business enterprise has been decertified based on a finding pursuant to clause one, two, or five of subdivision (a) of section nine hundred fifty-nine of the general municipal law, the amount required to be added back by reason of this paragraph shall be augmented by an amount equal to the product of the amount of credit, with respect to property which is disposed of or ceases to be in qualified use, which was deducted from the taxpayer's tax otherwise due under this article for all prior taxable years (subject to the limit set forth in this subparagraph) and the underpayment rate of interest (without regard to compounding) set by the commissioner of taxation and finance pursuant to subdivision (j) of section six hundred ninety-seven of this chapter, in effect on the last day of the taxable year. The limit shall be (I) the amount of credit, with respect to the property which is disposed of or ceases to be in qualified use, which was deducted from the taxpayer's tax otherwise due under this article for all prior taxable years, reduced (but not below zero) by (II) the credit allowed for actual use. For purposes of this subparagraph, the attribution to specific property of credit amount deducted from tax shall be established in accordance with the date of placement in service of such property in the empire zone. (iii) In no event shall the amount of the credit allowed pursuant to this subsection be rendered, solely by reason of clause (i) of this subparagraph, less than the amount of the credit to which the taxpayer would otherwise be entitled under subsection (a) of this section. (iv) Notwithstanding any other provision of this subsection, in the case of a business enterprise which has been decertified, any amount of credit allowed with respect to the property of such business enterprise located in the zone to which the decertification applies which is carried over pursuant to paragraph four of this subsection shall not be carried over beyond the seventh taxable year next following the taxable year with respect to which the credit provided for in this subsection was allowed. (G) For purposes of this paragraph, where a credit is allowed with respect to an air pollution control facility on the basis of a certificate of compliance issued pursuant to the environmental conservation law and the certificate is revoked pursuant to subdivision three of section 19-0309 of the environmental conservation law, such revocation shall constitute a disposal or cessation of qualified use, except with respect to property contained in or comprising such facility which is described in clause (i), (ii) or (iii) of subparagraph (E) of paragraph two of this subsection other than as part of or comprising an air pollution control facility. Also for purposes of this paragraph, the use of an air pollution control facility or an industrial waste treatment facility for the primary purpose of salvaging materials which are usable in the manufacturing process or are marketable shall constitute a cessation of qualified use, except with respect to property contained in or comprising such facility which is described in clause (i) or (iii) of subparagraph (E) of paragraph two of this subsection. (H) Except as provided in this subparagraph, this paragraph shall not apply to a credit allowed by this subsection to a taxpayer that is a partner in a partnership in the case of manufacturing property; provided, at the time such property was placed in service by such partnership in an empire zone the basis for federal income tax purposes of such property (or a project that includes such property) equaled or exceeded three hundred million dollars and such partner owned his or her partnership interest for at least three years from the date such property was placed in service. If such property ceases to be in qualified use after it is placed in service, this paragraph shall apply to such partner in the year such property ceases to be in qualifying use. * NB Applies to property to which the amendments made by section 201 of Public Law 99-514 apply (j-1) Empire zone employment incentive credit. (1) Where a taxpayer is allowed a credit under subsection (j) of this section, the taxpayer shall be allowed a credit for each of the three years next succeeding the taxable year for which the credit under such subsection (j) is allowed, with respect to such property, whether or not deductible in such taxable year or in subsequent taxable years pursuant to paragraph four of subsection (j) of this section, of thirty percent of the credit allowable under such subsection (j); provided, however, that the credit allowable under this subsection for any taxable year shall only be allowed if the average number of employees employed by the taxpayer in the empire zone, designated pursuant to article eighteen-B of the general municipal law, in which such property is located during such taxable year is at least one hundred one percent of the average number of employees employed by the taxpayer in such empire zone or, where applicable, in the geographic area subsequently constituting such zone, during the taxable year immediately preceding the taxable year for which the credit under such subsection (j) is allowed and provided, further, that in the case of a new business, the credit allowable under this subsection for any taxable year shall be allowed if the average number of employees employed in such empire zone in such taxable year is at least one hundred one percent of the average number of such employees during the taxable year in which the credit under such subsection (j) is allowed. (2) The average number of employees employed in an empire zone, or, where applicable, in the geographic area subsequently constituting such zone, in a taxable year shall be computed by ascertaining the number of such employees within such zone, or, where applicable, in the geographic area subsequently constituting such zone, employed by the taxpayer on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September and the thirty-first day of December in the taxable year, by adding together the number of employees ascertained in each of such dates and dividing the sum so obtained by the number of such abovementioned dates occurring within the taxable year. (3) If the amount of credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. In lieu of carrying over any such excess, a taxpayer who qualified as an owner of a new business for purposes of paragraph ten of subsection (a) of this section may, at his option, receive fifty percent of such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (k) Empire zone wage tax credit. (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article, where the taxpayer has been certified pursuant to article eighteen-B of the general municipal law. The amount of such credit shall be as prescribed in paragraph four of this subsection. (2) For the purposes of this subsection, the following terms shall have the following meanings: (A) "Empire zone wages" means wages paid by the taxpayer for full-time employment during the taxable year, in an area designated or previously designated as an empire zone or zone equivalent area pursuant to article eighteen-B of the general municipal law, where such employment is in a job created in the area (i) during the period of its designation as an empire zone, (ii) within four years of the expiration of such designation, or (iii) during the ten year period immediately following the date of designation as a zone equivalent area, provided, however, that if the taxpayer's certification under article eighteen-B of the general municipal law is revoked with respect to an empire zone or zone equivalent area, any wages paid by the taxpayer, on or after the effective date of such decertification, for employment in such zone shall not constitute empire zone wages. (B) "Targeted employee" means a New York resident who receives empire zone wages and who is (i) an eligible individual under the provisions of the targeted jobs tax credit (section fifty-one of the internal revenue code), (ii) eligible for benefits under the provisions of the workforce investment act as a dislocated worker or low-income individual (P.L. 105-220, as amended), (iii) a recipient of public assistance benefits, (iv) an individual whose income is below the most recently established poverty rate promulgated by the United States department of commerce, or a member of a family whose family income is below the most recently established poverty rate promulgated by the appropriate federal agency or (v) an honorably discharged member of any branch of the armed forces of the United States. An individual who satisfies the criteria set forth in clause (i), (ii), (iv) or (v) at the time of initial employment in the job with respect to which the credit is claimed, or who satisfies the criterion set forth in clause (iii) at such time or at any time within the previous two years, shall be a targeted employee so long as such individual continues to receive empire zone wages. (C) "Average number of individuals employed full-time" shall be computed by ascertaining the number of such individuals employed by the taxpayer on the thirty-first day of March, the thirtieth day of June, the thirtieth day of September and the thirty-first day of December during each taxable year or other applicable period, by adding together the number of such individuals ascertained on each of such dates and dividing the sum so obtained by the number of such dates occurring within such taxable year or other applicable period. (3) The credit provided for herein shall be allowed only where the average number of individuals employed full-time by the taxpayer in (i) the state and (ii) the empire zone or area previously constituting such zone or zone equivalent area, during the taxable year exceeds the average number of such individuals employed full-time by the taxpayer in (i) the state and (ii) such zone or area subsequently or previously constituting such zone or such zone equivalent area, respectively, during the four years immediately preceding the first taxable year in which the credit is claimed with respect to such zone or area. Where the taxpayer provided full-time employment within (i) the state or (ii) such zone or area during only a portion of such four-year period, then for purposes of this paragraph the term "four years" shall be deemed to refer instead to such portion, if any. The credit shall be allowed only with respect to the first taxable year during which payments of empire zone wages are made and the conditions set forth in this paragraph are satisfied, and with respect to each of the four taxable years next following (but only, with respect to each of such years, if such conditions are satisfied), in accordance with paragraph four of this subsection. Subsequent certifications of the taxpayer pursuant to article eighteen-B of the general municipal law, at the same or a different location in the same empire zone or zone equivalent area or at a location in a different empire zone or zone equivalent area, shall not extend the five taxable year time limitation on the allowance of the credit set forth in the preceding sentence. Provided, further, however, that no credit shall be allowed with respect to any taxable year beginning more than four years following the taxable year in which designation as an empire zone expired or more than ten years after the designation as a zone equivalent area. (4) The amount of the credit shall equal the sum of (i) the product of three thousand dollars and the average number of individuals employed full-time by the taxpayer, computed pursuant to the provisions of subparagraph (C) of paragraph two of this subsection, who (I) received empire zone wages for more than half of the taxable year, (II) received with respect to more than half of the period of employment by the taxpayer during the taxable year, an hourly wage which was at least one hundred thirty-five percent of the minimum wage specified in section six hundred fifty-two of the labor law, and (III) are targeted employees; and (ii) the product of fifteen hundred dollars and the average number of individuals (excluding individuals described in subparagraph (i) of this paragraph) employed full-time by the taxpayer, computed pursuant to the provisions of subparagraph (C) of paragraph two of this subsection, who received empire zone wages for more than half of the taxable year. Provided, further, however, that the credit provided for herein with respect to the taxable year, and carryovers of such credit to the taxable year, deducted from the tax otherwise due, may not, in the aggregate, exceed fifty percent of the tax imposed under section six hundred one computed without regard to any credit provided for under this article. (iii) For purposes of calculating the amount of the credit, individuals employed within an empire zone or zone equivalent area within the immediately preceding sixty months by a related person, as such term is defined in subparagraph (c) of paragraph three of subsection (b) of section four hundred sixty-five of the internal revenue code, shall not be included in the average number of individuals described in subparagraph (i) or subparagraph (ii) of this paragraph, unless such related person was never allowed a credit under this subsection with respect to such employees. For purposes of this subparagraph, a "related person" shall include an entity which would have qualified as a "related person" to the taxpayer if it had not been dissolved, liquidated, merged with another entity or otherwise ceased to exist or operate. (iv) If a taxpayer is certified in an empire zone designated under subdivision (a) or (d) of section nine hundred fifty-eight of the general municipal law, the dollar amounts specified under subparagraph (i) or (ii) of this paragraph shall be increased by five hundred dollars for each qualifying individual under such subparagraph who received, during the taxable year, wages in excess of forty thousand dollars. (5) If the amount of the credit and carryovers of such credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess, as well as any part of the credit or carryovers of such credit, or both, which may not be deducted from the tax otherwise due by reason of the final sentence in paragraph four hereof, may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. In lieu of carrying over any such excess, a taxpayer who qualifies as an owner of a new business for purposes of paragraph ten of subsection (a) of this section may, at his option, receive fifty percent of such excess as a refund. Any refund paid pursuant to this paragraph shall be deemed to be a refund of an overpayment of tax as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (l) Empire zone capital tax credit. (1) A taxpayer shall be allowed a credit against the tax imposed by this article. The amount of the credit shall be equal to twenty-five percent of the sum of the following investments and contributions made during the taxable year and certified by the commissioner of economic development: (A) for taxable years beginning before January first, two thousand five, qualified investments made in, or contributions in the form of donations made to, one or more empire zone capital corporations established pursuant to section nine hundred sixty-four of the general municipal law prior to January first, two thousand five, (B) qualified investments in certified zone businesses which during the twelve month period immediately preceding the month in which such investment is made employed full-time within the state an average number of individuals of two hundred fifty or fewer, computed pursuant to the provisions of subparagraph (C) of paragraph two of subsection (k) of this section, except for investments made by or on behalf of an owner of the business including, but not limited to, a stockholder, partner or sole proprietor, or any related person, as defined in subparagraph (C) of paragraph three of subsection (b) of section four hundred sixty-five of the internal revenue code, and (C) contributions of money to community development projects as defined in regulations promulgated by the commissioner of economic development. "Qualified investments" means the contribution of property to a corporation in exchange for original issue capital stock or other ownership interest, the contribution of property to a partnership in exchange for an interest in the partnership, and similar contributions in the case of a business entity not in corporate or partnership form in exchange for an ownership interest in such entity. The total amount of credit allowable to a taxpayer under this provision for all years, taken in the aggregate, shall not exceed three hundred thousand dollars, and shall not exceed one hundred thousand dollars with respect to the investments and contributions described in each of subparagraphs (A), (B) and (C) of this paragraph. * (2) The credit allowed under this subsection for any taxable year shall not exceed the tax imposed by section six hundred one of this article for the taxable year, reduced by the credits permitted under subsections (b) and (c) of this section and sections six hundred twenty, six hundred twenty-one and six hundred thirty-five of this article, nor may any unused credit be carried over to the following year or years. In addition, no taxpayer shall be allowed such credit, or such credits with respect to more than one year, taken in the aggregate, of more than one hundred thousand dollars. In addition, such credit may not exceed fifty percent of the tax imposed under section six hundred one of this article computed without regard to any credit provided for by this section. * NB Applies to taxable years beginning on or after January 1, 1986 * (2) (A) If the amount of the credit and carryovers of such credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, or if any part of the credit or carryovers of such credit may not be deducted from the tax otherwise due by reason of the final sentence of this subparagraph, any amount of credit or carryovers of such credit thus not deductible in such taxable year may be carried over to the following year or years and may be deducted from the tax for such year or years. In addition, the amount of such credit, and carryovers of such credit to the taxable year, deducted from the tax otherwise due may not, in the aggregate, exceed fifty percent of the tax imposed under section six hundred one computed without regard to any credit provided for by this section. (B) In the case of a husband or wife who is required to file a separate return, the limitation provided for in paragraph one of this subsection shall be fifty thousand dollars in lieu of one hundred thousand dollars and one hundred fifty thousand dollars in lieu of three hundred thousand dollars, unless the spouse of the taxpayer has no credit allowable under this subsection for the taxable year of such spouse which ends within or with the taxpayer's taxable year. (C) In the case of an estate or trust, the limitation provided for in paragraph one of this subsection shall be reduced to an amount which bears the same ratio to one hundred thousand dollars and an amount which bears the same ratio to three hundred thousand dollars as the portion of the income of the estate or trust which is not allocated to beneficiaries bears to the total income of the estate or trust. * NB Applies to taxable years beginning after 1986 (3) Where the stock, partnership interest or other ownership interest arising from a qualified investment as described in subparagraphs (A) and (B) of paragraph one of this subsection is disposed of, the taxpayer's New York taxable income shall be computed, pursuant to regulations promulgated by the commissioner, so as to properly reflect the reduced cost thereof arising from the application of the credit provided for herein. (4) (A) Where a taxpayer sells, transfers or otherwise disposes of corporate stock, a partnership interest or other ownership interest arising from the making of a qualified investment which was the basis, in whole or in part, for the allowance of the credit provided for under this subsection, or where a contribution or investment which was the basis for such allowance is in any manner, in whole or in part, recovered by such taxpayer, and such disposition or recovery occurs during the taxable year or within thirty-six months from the close of the taxable year with respect to which such credit is allowed, subparagraph (B) of this paragraph shall apply. (B) The taxpayer shall add back with respect to the taxable year in which the disposition or recovery described in subparagraph (A) of this paragraph occurred the required portion of the credit originally allowed. (C) The required portion of the credit originally allowed shall be the product of (i) the portion of such credit attributable to the property disposed of or the payment or contribution recovered and (ii) the applicable percentage. (D) The applicable percentage shall be: (i) one hundred percent, if the disposition or recovery occurs within the taxable year with respect to which the credit is allowed or within twelve months of the end of such taxable year, (ii) sixty-seven percent, if the disposition or recovery occurs more than twelve but not more than twenty-four months after the end of the taxable year with respect to which the credit is allowed, or (iii) thirty-three percent, if the disposition or recovery occurs more than twenty-four but not more than thirty-six months after the end of the taxable year with respect to which the credit is allowed. (m) Excess deductions credit. (1) General. For taxable years beginning in nineteen hundred ninety-five, an excess deductions credit shall be allowed against the tax determined under subsections (a) through (d) of section six hundred one of this article. The credit shall be allowed to an individual taxpayer whose New York itemized deduction determined under section six hundred fifteen (whether or not the taxpayer elects the New York itemized deduction for the taxable year) exceeds the base amount determined under paragraph two hereof. The credit shall not exceed the tax determined under subsections (a) through (d) of section six hundred one for the taxable year, reduced by the credits permitted under subsection (c) of this section and sections six hundred twenty and six hundred twenty-one of this article. (2) Base amount. The base amount shall be determined by the taxpayer's standard deduction status under section six hundred fourteen (whether or not the taxpayer employs the standard deduction for the taxable year) as follows: If the taxpayer's standard The base amount is: deduction status is: Unmarried individual who is not a head of household nor a surviving spouse nor an individual whose federal exemption amount is zero $6,000 Husband and wife whose New York taxable income is determined jointly, or a surviving spouse $9,500 Head of household $7,000 Married individual filing a separate New York return $4,750 (3) Credit amount. (A) Married individuals filing joint returns and surviving spouses. The amount of the credit allowed pursuant to this subsection for married individuals filing jointly under subsection (b) of section six hundred fifty-one and for a surviving spouse shall be: If New York taxable income is: The credit is the following percentage of New York taxable income: Not over $11,500 0.57% Over $11,500 but not over $17,500 0.51% Over $17,500 but not over $24,100 0.36% Over $24,100 but not over $31,500 0.26% Over $31,500 but not over $35,500 0.16% Over $35,500 but not over $42,000 0.11% Over $42,000 but not over $49,000 0.06% Over $49,000 0.00% (B) Heads of households. The amount of the credit allowed pursuant to this subsection for a head of household shall be: If New York taxable income is: The credit is the following percentage of New York taxable income: Not over $7,600 0.57% Over $7,600 but not over $11,700 0.51% Over $11,700 but not over $16,400 0.36% Over $16,400 but not over $20,500 0.26% Over $20,500 but not over $23,800 0.16% Over $23,800 but not over $28,650 0.11% Over $28,650 but not over $33,400 0.06% Over $33,400 0.00% (C) Unmarried individuals and married individuals filing separate returns. The amount of the credit allowed pursuant to this subsection for an individual who is not a married individual filing jointly under subsection (b) of section six hundred fifty-one nor a head of a household nor a surviving spouse shall be: If New York taxable income is: The credit is the following percentage of New York taxable income: Not over $5,600 0.57% Over $5,600 but not over $8,600 0.51% Over $8,600 but not over $12,000 0.36% Over $12,000 but not over $15,700 0.26% Over $15,700 but not over $17,600 0.16% Over $17,600 but not over $21,000 0.11% Over $21,000 but not over $24,500 0.06% Over $24,500 0.00% (n) Agricultural property tax credit. (1) General. In the case of a taxpayer who is an eligible farmer or an eligible farmer who has paid taxes pursuant to a land contract, there shall be allowed a credit for the allowable school district property taxes. The term "allowable school district property taxes" means the school district property taxes paid during the taxable year on qualified agricultural property, subject to the acreage limitation provided in paragraph five of this subsection and the income limitation provided in paragraph six of this subsection. Such credit shall be allowed against the taxes imposed by this article for the taxable year reduced by the credits permitted by this article. If the credit exceeds the tax as so reduced, the taxpayer may receive, and the comptroller, subject to a certificate of the commissioner, shall pay as an overpayment, without interest, the amount of such excess. (2) Eligible farmer. For purposes of this subsection, the term "eligible farmer" means a taxpayer whose federal gross income from farming for the taxable year is at least two-thirds of excess federal gross income. The term "eligible farmer" also includes an individual other than the taxpayer of record for qualified agricultural land who has paid the school district property taxes on such land pursuant to a contract for the future purchase of such land; provided that such individual has a federal gross income from farming for the taxable year which is at least two-thirds of excess federal gross income; and provided further that, in determining such income eligibility, a taxpayer may, for any taxable year, use the average of such federal gross income from farming for that taxable year and such income for the two consecutive taxable years immediately preceding such taxable year. Excess federal gross income means the amount of federal gross income from all sources for the taxable year reduced by the sum (not to exceed thirty thousand dollars) of those items included in federal gross income which consist of (i) earned income, (ii) pension payments, including social security payments, (iii) interest, and (iv) dividends. For purposes of this paragraph, the term "earned income" shall mean wages, salaries, tips and other employee compensation, and those items of gross income which are includible in the computation of net earnings from self-employment. (3) School district property taxes. For purposes of this subsection, the term "school district property taxes" means all property taxes, special ad valorem levies and special assessments, exclusive of penalties and interest, levied for school district purposes on the qualified agricultural property (A) owned by the taxpayer or (B) owned by the father, mother, grandfather, grandmother, brother or sister of the taxpayer and a written agreement expressing intent to eventually purchase the land has been entered into. (4) Qualified agricultural property. For purposes of this subsection, the term "qualified agricultural property" means land located in this state which is used in agricultural production, and land improvements, structures and buildings (excluding buildings used for the taxpayer's residential purpose) located on such land which are used or occupied to carry out such production. Qualified agricultural property also includes land set aside or retired under a federal supply management or soil conservation program or land that at the time it becomes subject to a conservation easement, as defined under subsection (kk) of this section, met the requirements under this paragraph. (5) Acreage limitation. (A) Eligible taxes. In the event that the qualified agricultural property owned by the taxpayer includes land in excess of the base acreage as provided in this paragraph, the amount of school district property taxes eligible for credit under this subsection shall be that portion of the school district property taxes which bears the same ratio to the total school district property taxes paid during the taxable year, as the acreage allowable under this paragraph bears to the entire acreage of such land. (B) Allowable acreage. The allowable acreage is the sum of the base acreage set forth below and fifty percent of the incremental acreage. The incremental acreage is the excess of the entire acreage of qualified agricultural land owned by the taxpayer over the base acreage. Except as provided in subparagraph (C) of this paragraph: For taxable years beginning: The base acreage is: in 1997 100 after 1997 but before 2006 250 2006 and thereafter 350 For taxable years beginning after two thousand, total base acreage may be increased by any acreage enrolled or participating during the taxable year in a federal environmental conservation acreage reserve program pursuant to title three of the federal agriculture improvement and reform act of nineteen hundred ninety-six. (C) Base acreage of related persons. Where the taxpayer and one or more related persons each own qualified agricultural property on the first day of March of any year, the base acreage under subparagraph (B) of this paragraph shall be divided equally and allotted among the taxpayer and such related persons, and the taxpayer's base acreage for the taxable year which includes such March first shall be limited to its allotted share. Provided, however, if the taxpayer and all such related persons consent (at such time and in such manner as the commissioner may prescribe) to an unequal division, the taxpayer's base acreage for such taxable year shall be limited to its allotted share under such unequal division. (D) Related persons. (i) For purposes of subparagraph (C) of this paragraph, the term "related person" means: (I) a spouse; (II) a corporation subject to tax under article nine-A of this chapter, where more than fifty percent in value of the outstanding stock of the corporation is owned, directly or indirectly, by or for the taxpayer, or, where the taxpayer is a trust, where such stock is owned directly or indirectly by or for the grantor of such trust; (III) a partnership, estate or trust of which the taxpayer owns, directly or indirectly, more than fifty percent of the capital, profits or beneficial interest. (ii) For purposes of subparagraph (C) of this paragraph, where the taxpayer is an estate or trust, the term "related person" shall also mean a corporation subject to tax under article nine-A of this chapter, a partnership, an estate or trust: (I) where more than fifty percent of the beneficial interest in the taxpayer is owned, directly or indirectly, by or for such corporation, partnership, estate or trust or by or for the grantor of such trust; or (II) if the same person owns more than fifty percent of the beneficial interest in the taxpayer and more than fifty percent in value of the outstanding stock of the corporation, or more than fifty percent of the capital or profits interest in the partnership, or more than fifty percent of the beneficial interest in the estate or trust. (iii) In determining whether a person is a related person within the meaning of this subparagraph: (I) stock owned, directly or indirectly, by or for a corporation, partnership, estate or trust shall be considered as being owned proportionately by or for its shareholders, partners or beneficiaries; (II) an individual shall be considered as owning the stock owned, directly or indirectly, by or for his spouse; (III) stock constructively owned by a person by reason of the application of item (I) of this clause shall, for the purpose of applying item (I) or (II) of this clause, be treated as actually owned by such person. (6) Income limitation. (A) In the event that the modified New York adjusted gross income of the taxpayer exceeds one hundred thousand dollars for taxable years beginning before two thousand six or two hundred thousand dollars for taxable year two thousand six and thereafter, the allowable school district property taxes under paragraph one of this subsection shall be the eligible taxes under subparagraph (A) of paragraph five of this subsection reduced by the product of the amount of such eligible taxes and a percentage, such percentage to be determined by multiplying one hundred percent by a fraction, the numerator of which is the lesser of fifty thousand dollars for taxable years beginning before two thousand six or one hundred thousand dollars for taxable year two thousand six and thereafter or the excess of the taxpayer's modified New York adjusted gross income over one hundred thousand dollars for taxable years beginning before two thousand six or two hundred thousand dollars for taxable year two thousand six and thereafter and the denominator of which is fifty thousand dollars for taxable years beginning before two thousand six or one hundred thousand dollars for taxable year two thousand six and thereafter. For purposes of the preceding sentence, the term "eligible taxes", where the acreage limitation of paragraph five of this subsection does not apply, shall mean the total school district property taxes paid during the taxable year. (B) The term "modified New York adjusted gross income" means the New York adjusted gross income for the taxable year reduced by the amount of principal paid on farm indebtedness during the taxable year. The term "farm indebtedness" means debt incurred or refinanced which is secured by farm property, where the proceeds of the debt are disbursed for expenditures incurred in the business of farming. (7) Nonqualified use. (A) No credit in conversion year. In the event that qualified agricultural property is converted by the taxpayer to nonqualified use, credit under this subsection shall not be allowed with respect to such property for the taxable year of conversion (the conversion year). (B) Credit recapture. If the conversion by the taxpayer of qualified agricultural property to nonqualified use occurs during the period of the two taxable years following the taxable year for which the credit under this subsection was first claimed with respect to such property, the credit allowed with respect to such property for the taxable years prior to the conversion year must be added back in the conversion year. Where the property converted includes land, and where the conversion is of only a portion of such land, the credit allowed with respect to the property converted shall be determined by multiplying the entire credit under this subsection for the taxable years prior to the conversion year by a fraction, the numerator of which is the acreage converted and the denominator of which is the entire acreage of such land owned by the taxpayer immediately prior to the conversion. (C) Exception to recapture. Subparagraph (B) of this paragraph shall not apply to the conversion of property where the conversion is by reason of involuntary conversion, within the meaning of section one thousand thirty-three of the internal revenue code. (D) Conversion to nonqualified use. For purposes of this paragraph, a sale or other disposition of qualified agricultural property alone shall not constitute a conversion to a nonqualified use. (8) Special rules. For purposes of this subsection, the term "federal gross income from farming" shall include gross income from the production of maple syrup, cider, Christmas trees derived from a managed Christmas tree operation whether dug for transplanting or cut from the stump, or from a commercial horse boarding operation as defined in subdivision thirteen of section three hundred one of the agriculture and markets law, or from the sale of wine from a licensed farm winery as provided for in article six of the alcoholic beverage control law. (9) Election to deem gross income of New York C corporation to shareholders. (A) General. For purposes of the credit under this subsection, the shareholders of an eligible corporation may elect to take into account their pro rata shares of the corporation's income and principal payments on farm indebtedness as provided in subparagraph (B) of this paragraph, for the taxable year of the corporation ending with or within the taxable year of each shareholder. No election under this paragraph shall be effective unless shareholders holding more than one-half, by vote and value, of the shares of stock of the corporation on the day on which the election is made have so elected. (B) Inclusion in gross and adjusted gross income. (i) For any taxable year of the corporation for which the election under this paragraph is in effect, the shareholders of the corporation shall include: (I) in gross income, for purposes of paragraph two of this subsection, their pro rata shares of the corporation's gross income, which income shall have the same character as in the hands of the corporation, and (II) in adjusted gross income, for purposes of paragraph six of this subsection, their pro rata shares of the corporation's entire net income, and (III) in principal payments on farm indebtedness, for purposes of paragraph six of this subsection, their pro rata shares of such payments made by the corporation. (ii) Tiered New York C and New York S corporation. In the event that a shareholder of the corporation is a New York S corporation, the New York S corporation shall make the inclusions prescribed by clause (i) of this subparagraph (except that the inclusion prescribed by subclause (II) of such clause shall be in the entire net income of the New York S corporation), and the New York S corporation shall pass through such inclusions in pro rata shares to its shareholders for purposes of their calculation of credit under this subsection. (C) Eligible corporation. The term "eligible corporation" means a corporation subject to tax under article nine-A of this chapter which is a New York C corporation for federal income tax purposes. (D) Pro rata share. For purposes of this paragraph, the pro rata share of any item of income or farm indebtedness principal payments for a taxable year of the corporation shall be determined with respect to a shareholder by assigning an equal portion of the item to each day of such taxable year, and then by dividing that portion pro rata among the shares outstanding on such day. (E) Election. (i) An election under subparagraph (A) of this paragraph shall be made on such form and in such manner as the commissioner may prescribe. (ii) When made. Such election shall be made no later than the due date of the corporation tax return (determined without regard to extensions) for the corporation's taxable year for which the election is to be effective. (iii) When effective. Such election shall be effective for the taxable year of the corporation for which it is made and for all succeeding taxable years of the corporation, until such election is terminated under subparagraph (F) of this paragraph. (F) Termination. (i) Revocation. An election under subparagraph (A) of this paragraph shall be terminated if shareholders holding more than one-half, by vote and value, of the shares of stock of the corporation on the day on which the revocation is made revoke the election. Such revocation shall be made on such form and in such manner as the commissioner may prescribe, and shall be effective on the first day of the corporation's taxable year following the date on which the revocation is made. (ii) Ineligible corporation. An election under subparagraph (A) of this paragraph shall be terminated on the first day of the corporation's taxable year with respect to which the corporation ceases to be an eligible corporation. (G) Election after termination. If an election is terminated under subparagraph (F) of this paragraph, no further election under subparagraph (A) of this paragraph shall be made before the fifth taxable year of the corporation following the taxable year during which the termination occurred, unless the commissioner consents to such election. (H) Waiver of secrecy. The commissioner shall have authority to reveal to shareholders of the corporation any information with respect to income or farm indebtedness principal payments of the corporation, for any taxable year of the corporation for which the election under this paragraph is in effect, which is the basis for denial in whole or in part of the credit claimed by such shareholders. (o) Credit for employment of persons with disabilities. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article, for employing within the state a qualified employee. (2) Qualified employee. A qualified employee is an individual: (A) who is certified by the education department, or in the case of an individual who is blind or visually handicapped, by the state agency responsible for provision of vocation rehabilitation services to the blind and visually handicapped: (i) as a person with a disability which constitutes or results in a substantial handicap to employment and (ii) as having completed or as receiving services under an individualized written rehabilitation plan approved by the education department or other state agency responsible for providing vocational rehabilitation services to such individual; and (B) who has worked on a full-time basis for the employer who is claiming the credit for at least one hundred eighty days or four hundred hours. (3) Amount of credit. Except as provided in paragraph four of this subsection, the amount of credit shall be thirty-five percent of the first six thousand dollars in qualified first-year wages earned by each qualified employee. "Qualified first-year wages" means wages paid or incurred by the taxpayer during the taxable year to qualified employees which are attributable, with respect to any such employee, to services rendered during the one-year period beginning with the day the employee begins work for the taxpayer. (4) Credit where federal work opportunity tax credit applies. With respect to any qualified employee whose qualified first-year wages under paragraph three of this subsection also constitute qualified first-year wages for purposes of the work opportunity tax credit for vocational rehabilitation referrals under section fifty-one of the internal revenue code, the amount of credit under this subsection shall be thirty-five percent of the first six thousand dollars in qualified second-year wages earned by each such employee. "Qualified second-year wages" means wages paid or incurred by the taxpayer during the taxable year to qualified employees which are attributable, with respect to any such employee, to services rendered during the one-year period beginning one year after the employee begins work for the taxpayer. (5) Carryover. If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years, and may be deducted from the taxpayer's tax for such year or years. (6) Coordination with federal work opportunity tax credit. The provisions of sections fifty-one and fifty-two of the internal revenue code, as such sections applied on October first, nineteen hundred ninety-six, that apply to the work opportunity tax credit for vocational rehabilitation referrals shall apply to the credit under this subsection to the extent that such sections are consistent with the specific provisions of this subsection, provided that in the event of a conflict the provisions of this subsection shall control. (p) Alternative fuels credit. (1) General. A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article, for electric vehicles, clean-fuel vehicle property, clean-fuel vehicle refueling property and qualified hybrid vehicles placed in service during the taxable year. Provided, however, that the credit provided for by this subsection with respect to electric vehicles shall not be allowed to a gas corporation or an electric corporation as defined in subdivisions eleven and thirteen, respectively, of section two of the public service law, or a gas and electric corporation as described in section sixty-four of the public service law, where such corporation is subject to the supervision of the department of public service. (2) Electric vehicles. The credit under this subsection for electric vehicles shall equal fifty percent of the incremental cost of any such vehicle (A) which is registered in this state and (B) for which a credit is allowed under section thirty of the internal revenue code (determined without regard to the limitations prescribed in subsection (b) or the elections prescribed in subsection (d) of such section, including the election with respect to section one hundred seventy-nine of such code), (C) provided, however, the credit with respect to any such vehicle shall not exceed five thousand dollars. (3) Clean-fuel vehicle property. The credit under this subsection for clean-fuel vehicle property shall equal sixty percent of the cost of any such property (A) for which a deduction is allowed under section one hundred seventy-nine-A of the internal revenue code (determined without regard to the limitations prescribed in paragraph one of subsection (b) of such section or the election referred to in subsection (e) of such section with respect to section one hundred seventy-nine of such code), but not including clean-fuel vehicle property relating to a qualified hybrid vehicle as such vehicle is defined in subparagraph (E) of paragraph six of this subsection and (B) which is installed in or manufactured as part of a motor vehicle which is registered in this state, (C) provided, however, the credit with respect to any such vehicle shall not exceed five thousand dollars per vehicle for vehicles with a gross vehicle weight rating of fourteen thousand pounds or less and ten thousand dollars per vehicle for all other vehicles. (4) Clean-fuel vehicle refueling property. The credit under this subsection for clean-fuel vehicle refueling property shall equal fifty percent of the cost of any such property (A) which is located in this state and (B) for which a deduction is allowed under section one hundred seventy-nine-A of the internal revenue code (determined without regard to the limitations prescribed in paragraph two of subsection (b) of such section or the election referred to in subsection (e) of such section with respect to section one hundred seventy-nine of such code), but not including clean-fuel vehicle refueling property relating to a qualified hybrid vehicle as such vehicle is defined in subparagraph (E) of paragraph six of this subsection. (5) Qualified hybrid vehicle. The credit under this subsection for qualified hybrid vehicles shall equal two thousand dollars per vehicle registered in this state. (6) Definitions. (A) The term "electric vehicle" means a qualified electric vehicle within the meaning of subsection (c) of section thirty of the internal revenue code. (B) The terms "clean-fuel vehicle property" and "clean-fuel vehicle refueling property" mean any such property which is qualified within the meaning of subsections (c) and (d), respectively, of section one hundred seventy-nine-A of the internal revenue code, but such terms shall not include clean-fuel vehicle property or clean-fuel vehicle refueling property relating to a qualified hybrid vehicle as such vehicle is defined in subparagraph (E) of this paragraph. (C) The term "clean-fuel" means natural gas, liquefied petroleum gas, hydrogen, electricity, and any other fuel which is at least eighty-five percent, singly or in combination, methanol, ethanol, any other alcohol, or ether. (D) The term "incremental cost" shall mean the excess of the cost of an electric vehicle over the cost of a gasoline-powered vehicle which is similar in size and style. (E) The term "qualified hybrid vehicle" means a motor vehicle, as defined in section one hundred twenty-five of the vehicle and traffic law, other than an electric vehicle (as such term is defined in subparagraph (A) of this paragraph), that: (i) draws propulsion energy from both (a) an internal combustion engine (or heat engine that uses combustible fuel); and (b) an energy storage device; and (ii) employs a regenerative vehicle braking system that recovers waste energy to charge such energy storage device. (7) Carryovers. If the amount of credit allowable under this subsection shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. (8) Credit recapture. (A) Vehicles. (i) If, within three full years from the date an electric vehicle, qualified hybrid vehicle or a vehicle of which clean-fuel vehicle property is a part is placed in service, such electric vehicle, qualified hybrid vehicle or clean-fuel vehicle property ceases to be qualified, a recapture amount must be added back in the tax year in which such cessation occurs. (ii) Cessation of qualification. (I) An electric vehicle ceases to be qualified if (a) it is modified by the taxpayer so that it no longer is powered primarily by electricity, or (b) the taxpayer receiving the credit under this subsection sells or disposes of the vehicle and knows or has reason to know that the vehicle will be so modified. (II) A qualified hybrid vehicle ceases to be qualified if (a) it is modified by the taxpayer so that it no longer meets the requirements of a qualified hybrid vehicle as defined in subparagraph (E) of paragraph six of this subsection. (b) the taxpayer receiving the credit under this subsection sells or disposes of the vehicle and knows or has reason to know that the vehicle will be so modified. (III) Clean-fuel vehicle property ceases to be qualified if (a) the vehicle of which it is a part is modified by the taxpayer so that it may no longer be propelled by a clean-burning fuel, or (b) the vehicle otherwise ceases to qualify as property defined in subsection (c) of section one hundred seventy-nine-A of the internal revenue code, or (c) the taxpayer receiving the credit under this subsection sells or disposes of the vehicle and knows or has reason to know that the vehicle will be used in a manner described in subclause (a) or (b) of this item. (iii) Recapture amount. The recapture amount is equal to the credit allowable under this subsection multiplied by: (I) one hundred percent, if the cessation of qualification occurs within the first full year after the date the vehicle is placed in service, (II) sixty-six and two-thirds percent, if the cessation of qualification occurs within the second full year after the date the vehicle is placed in service, or (III) thirty-three and one-third percent, if the cessation of qualification occurs within the third full year after the date the vehicle is placed in service. (B) Clean-fuel vehicle refueling property. (i) If, at any time before the end of its recovery period, clean-fuel vehicle refueling property ceases to be qualified, a recapture amount must be added back in the year in which such cessation occurs. (ii) Cessation of qualification. Clean-fuel vehicle refueling property ceases to be qualified if (I) the property no longer qualifies as property described in subsection (d) of section one hundred seventy-nine-A of the internal revenue code, or (II) fifty percent or more of the use of the property in a taxable year is other than in a trade or business in this state, or (III) the taxpayer receiving the credit under this subsection sells or disposes of the property and knows or has reason to know that the property will be used in a manner described in item (I) or (II) of this clause. (iii) Recapture amount. The recapture amount is equal to the credit allowable under this subsection multiplied by a fraction, the numerator of which is the total recovery period for the property minus the number of recovery years prior to, but not including, the recapture year, and the denominator of which is the total recovery period. (9) Termination. This subsection shall not apply to property placed in service in taxable years beginning after December thirty-first, two thousand four. (q) Qualified emerging technology company employment credit. (1) A taxpayer shall be allowed a credit, to be computed as hereinafter provided, against the tax imposed by this article, provided: (A) the taxpayer is a sole proprietor of a qualified emerging technology company, a member of a partnership which is a qualified emerging technology company, or a shareholder of a New York S corporation which is a qualified emerging technology company, as defined in section thirty-one hundred two-e of the public authorities law; and (B) the average number of individuals employed full-time by such company in New York state during the taxable year is at least one hundred one percent of such company's base year employment. For the purposes of this subsection, "base year employment" means the average number of individuals employed full-time by such company in the state during the three taxable years immediately preceding the first taxable year in which the credit is claimed. Where such company provided full-time employment within the state during only a portion of such three-year period, then for purposes of this subsection, the term "three years" shall be deemed to refer instead to such portion, provided, however, the first taxable year for which this credit may be taken with respect to such company shall be the next year following the first full taxable year that such company had full-time employment in New York state. (2) The credit shall be allowed only in the first taxable year in which the credit is claimed and in each of the next two taxable years, provided that the conditions of paragraph one of this subsection are satisfied in each taxable year. (3) For the purposes of this subsection, average number of individuals employed full-time shall be computed by adding the number of such individuals employed by such company at the end of each quarter during each taxable year or other applicable period and dividing the sum so obtained by the number of such quarters occurring within such taxable year or other applicable period; provided, however, that in computing base year employment there shall be excluded therefrom any employee with respect to whom a credit provided for under subsection (k) of this section is claimed for the taxable year. (4) The amount of the credit shall equal the product of one thousand dollars multiplied by the number of individuals employed full-time by such company in the taxable year that are in excess of one hundred percent of such company's base year employment. (5) If the amount of credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (r) Qualified emerging technology company capital tax credit. (1) A taxpayer shall be allowed a credit against the tax imposed by this article. The amount of the credit shall be equal to one of the following percentages, per each qualified investment in a qualified emerging technology company as defined in section thirty-one hundred two-e of the public authorities law, made during the taxable year, and certified by the commissioner, either: (A) ten percent of qualified investments in qualified emerging technology companies, except for investments made by or on behalf of an owner of the business, including, but not limited to, a stockholder, partner or sole proprietor, or any related person, as defined in subparagraph (C) of paragraph three of subsection (b) of section four hundred sixty-five of the internal revenue code, and provided, however, that the taxpayer certifies to the commissioner that the qualified investment will not be sold, transferred, traded, or disposed of during the four years following the year in which the credit is first claimed; or (B) twenty percent of qualified investments in qualified emerging technology companies, except for investments made by or on behalf of an owner of the business, including, but not limited to, a stockholder, partner or sole proprietor, or any related person, as defined in subparagraph (C) of paragraph three of subsection (b) of section four hundred sixty-five of the internal revenue code, and provided, however, that the taxpayer certifies to the commissioner that the qualified investment will not be sold, transferred, traded, or disposed of during the nine years following the year in which the credit is first claimed. (C) "Qualified investment" means the contribution of property to a corporation in exchange for original issue capital stock or other ownership interest, the contribution of property to a partnership in exchange for an interest in the partnership, and similar contributions in the case of a business entity not in corporate or partnership form in exchange for an ownership interest in such entity. The total amount of credit allowable to a taxpayer under this provision for all years, taken in the aggregate, shall not exceed one hundred fifty thousand dollars in the case of investments made pursuant to subparagraph (A) of this paragraph and shall not exceed three hundred thousand dollars in the case of investments made pursuant to subparagraph (B) of this paragraph. (2) (A) If the amount of the credit and carryovers of such credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, any amount of credit or carryovers of such credit thus not deductible in such taxable year may be carried over to the following year or years and may be deducted from the tax for such year or years. In addition, the amount of such credit, and carryovers of such credit to the taxable year, deducted from the tax otherwise due may not, in the aggregate, exceed fifty percent of the tax imposed under section six hundred one computed without regard to any credit provided for by this section. (B) In the case of a husband or wife who is required to file a separate return, the limitations provided for in subparagraph (c) of paragraph one of this subsection shall be seventy-five thousand dollars in lieu of one hundred fifty thousand dollars, and one hundred fifty thousand dollars in lieu of three hundred thousand dollars, unless the spouse of the taxpayer has no credit allowable under this subsection for the taxable year of such spouse which ends within or with the taxpayer's taxable year. (C) In the case of an estate or trust, the limitations provided for in paragraph one of this subsection shall be reduced to an amount which bears the same ratio to one hundred fifty thousand dollars and an amount which bears the same ratio to three hundred thousand dollars as the portion of the income of the estate or trust which is not allocated to beneficiaries bears to the total income of the estate or trust. (3) (A) Where a taxpayer sells, transfers or otherwise disposes of corporate stock, a partnership interest or other ownership interest arising from the making of a qualified investment which was the basis, in whole or in part, for the allowance of the credit provided for under subparagraph (A) of paragraph one of this subsection, or where an investment which was the basis for such allowance is, in whole or in part, recovered by such taxpayer, and such disposition or recovery occurs during the taxable year or within forty-eight months from the close of the taxable year with respect to which such credit is allowed, the taxpayer shall add back, with respect to the taxable year in which the disposition or recovery described above occurred, the required portion of the credit originally allowed. (B) Where a taxpayer sells, transfers or otherwise disposes of corporate stock, a partnership interest or other ownership interest arising from the making of a qualified investment which was the basis, in whole or in part, for the allowance of the credit provided for under subparagraph (B) of paragraph one of this subsection, or where an investment which was the basis for such allowance is in any manner, in whole or in part, recovered by such taxpayer, and such disposition or recovery occurs during the taxable year or within one hundred eight months from the close of the taxable year with respect to which such credit is allowed, the taxpayer shall add back, with respect to the taxable year in which the disposition or recovery described in subparagraph one of this paragraph occurred the required portion of the credit originally allowed. (C) The required portion of the credit originally allowed shall be the product of (i) the portion of such credit attributable to the property disposed of and (ii) the applicable percentage. (D) The applicable percentage shall be: (i) for credits allowed pursuant to subparagraph (A) of paragraph one of this subsection: (I) one hundred percent, if the disposition or recovery occurs within the taxable year with respect to which the credit is allowed or within twelve months of the end of such taxable year, (II) seventy-five percent, if the disposition or recovery occurs more than twelve but not more than twenty-four months after the end of the taxable year with respect to which the credit is allowed, (III) fifty percent, if the disposition or recovery occurs more than twenty-four months but not more than thirty-six months after the end of the taxable year with respect to which the credit is allowed, or (IV) twenty-five percent, if the disposition or recovery occurs more than thirty-six months but not more than forty-eight months after the end of the taxable year with respect to which the credit is allowed; or (ii) for credits allowed pursuant to subparagraph (B) of paragraph one of this subsection: (I) one hundred percent, if the disposition or recovery occurs within the taxable year with respect to which the credit is allowed or within twelve months of the end of such taxable year, (II) eighty percent, if the disposition or recovery occurs more than twelve but not more than forty-eight months after the end of the taxable year with respect to which the credit is allowed, (III) sixty percent, if the disposition or recovery occurs more than forty-eight months but not more than seventy-two months after the end of the taxable year with respect to which the credit is allowed, (IV) forty percent, if the disposition or recovery occurs more than seventy-two months but not more than ninety-six months after the end of the taxable year with respect to which the credit is allowed, or (V) twenty percent, if the disposition or recovery occurs more than ninety-six months but not more than one hundred eight months after the end of the taxable year with respect to which the credit is allowed. (s) Credit for purchase of an automated external defibrillator. A taxpayer shall be allowed a credit as hereinafter provided, against the tax imposed by this article for the purchase, other than for resale, of an automated external defibrillator, as such term is defined in section three thousand-b of the public health law. The amount of credit shall be the cost to the taxpayer of automated external defibrillators purchased during the taxable year, such credit not to exceed five hundred dollars with respect to each unit purchased. (t) College tuition credit. (1) General. A resident taxpayer shall be allowed the option of claiming a credit, to be computed as provided in paragraph four of this subsection, against the tax imposed by this article, or an itemized deduction, to be computed as provided in paragraph four of subsection (d) of section six hundred fifteen of this article, for allowable college tuition expenses. (2) Allowable and qualified college tuition expenses. For the purposes of this credit and the itemized deduction provided by paragraph four of subsection (d) of section six hundred fifteen of this article: (A) The term "allowable college tuition expenses" shall mean the amount of qualified college tuition expenses of eligible students paid by the taxpayer during the taxable year, limited to ten thousand dollars for each such student; (B) The term "eligible student" shall mean the taxpayer, the taxpayer's spouse, and any dependent of the taxpayer with respect to whom the taxpayer is allowed an exemption under section six hundred sixteen of this article for the taxable year; (C) The term "qualified college tuition expenses" shall mean the tuition required for the enrollment or attendance of an eligible student at an institution of higher education. Provided, however, tuition payments made pursuant to the receipt of any scholarships or financial aid, or tuition required for enrollment or attendance in a course of study leading to the granting of a post baccalaureate or other graduate degree, shall be excluded from the definition of "qualified college tuition expenses". (D) Expenses paid by dependent. If an exemption under section six hundred sixteen of this article with respect to an individual is allowed to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins, (i) no credit under this subsection or deduction under paragraph four of subsection (d) of section six hundred fifteen of this article shall be allowed to such individual for such individual's taxable year, and (ii) for purposes of such credit or deduction, qualified college tuition expenses paid by such individual during such individual's taxable year shall be treated as paid by such other taxpayer. (3) Institution of higher education. For the purposes of this credit and the itemized deduction provided by paragraph four of subdivision (d) of section six hundred fifteen of this article, the term "institution of higher education" shall mean any institution of higher education or business, trade, technical or other occupational school, recognized and approved by the regents, or any successor organization, of the university of the state of New York or accredited by a nationally recognized accrediting agency or association accepted as such by the regents, or any successor organization, of the university of the state of New York, which provides a course of study leading to the granting of a post-secondary degree, certificate or diploma. (4) Amount of credit. If allowable college tuition expenses are less than five thousand dollars, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the lesser of allowable college tuition expenses or two hundred dollars. If allowable college tuition expenses are five thousand dollars or more, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the allowable college tuition expenses multiplied by four percent. Such applicable percentage shall be twenty-five percent for taxable years beginning in two thousand one, fifty percent for taxable years beginning in two thousand two, seventy-five percent for taxable years beginning in two thousand three and one hundred percent for taxable years beginning after two thousand three. (5) Refundability. The credit under this subsection shall be allowed against the taxes imposed by this article for the taxable year reduced by the credits permitted by this article. If the credit exceeds the tax as so reduced, the taxpayer may receive, and the comptroller, subject to a certificate of the commissioner, shall pay as an overpayment, without interest, the amount of such excess. (6) Limitation. No credit shall be allowed under this subsection to a taxpayer who claims the itemized deduction provided under paragraph four of subdivision (d) of section six hundred fifteen of this article. * (t-1) IMB credit for energy taxes. (1) Allowance of credit. A taxpayer which is a sole proprietor of an industrial or manufacturing business (IMB), or a member of a partnership which is an IMB, shall be allowed a credit for energy taxes, to be computed as provided in section fourteen-a of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Repealed for taxable years ending on and after January 1, 2007 (x) Low-income housing credit. (1) Allowance of credit. A taxpayer shall be allowed a credit against the tax imposed by this article with respect to the ownership of eligible low-income buildings, computed as provided in section eighteen of this chapter. (2) Application of credit. If the amount of credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years, and may be deducted from the taxpayer's tax for such year or years. (3) Credit recapture. For provisions requiring recapture of credit, see subdivision (b) of section eighteen of this chapter. (y) Green building credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section nineteen of this chapter, against the tax imposed by this article. (2) Carryovers. If the amount of the credit and carryovers of such credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess, as well as any part of the credit or carryovers of such credit, or both, may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. (z) Credit for transportation improvement contributions. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section twenty of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (3) Credit recapture. For provisions requiring recapture of credit, see subdivision (c) of section twenty of this chapter. (aa) Long-term care insurance credit. (1) Residents. A taxpayer shall be allowed a credit against the tax imposed by this article equal to twenty percent of the premium paid during the taxable year for long-term care insurance. In order to qualify for such credit, the taxpayer's premium payment must be for the purchase of or for continuing coverage under a long-term care insurance policy that qualifies for such credit pursuant to section one thousand one hundred seventeen of the insurance law. If the amount of the credit allowable under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess may be carried over to the following year or years and may be deducted from the taxpayer's tax for such year or years. (2) Nonresidents and part-year residents. In the case of a nonresident taxpayer or a part-year resident taxpayer, the credit determined under this subsection shall be limited to the amount determined by multiplying the amount of such credit by the New York source fraction as set forth in paragraph three of subsection (e) of section six hundred one of this article. The credit as so limited shall be applied as provided in paragraph one of this subsection. (bb) QEZE credit for real property taxes. (1) Allowance of credit. A taxpayer which is a sole proprietor of a qualified empire zone enterprise (QEZE), or a member of a partnership which is a QEZE, shall be allowed a credit for eligible real property taxes, to be computed as provided in section fifteen of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (cc) QEZE tax reduction credit. Allowance of credit. A taxpayer which is a sole proprietor of a qualified empire zone enterprise (QEZE), or a member of a partnership which is a QEZE, shall be allowed a QEZE tax reduction credit against the tax imposed by subsections (a) through (e) of section six hundred one of this part. * (dd) Brownfield redevelopment tax credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section twenty-one of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Applies to taxable years beginning on or after April 1, 2005 * (ee) Remediated brownfield credit for real property taxes for qualified sites. (1) Allowance of credit. A taxpayer which is a developer of a qualified site shall be allowed a credit for eligible real property taxes, to be computed as provided in subdivision (b) of section twenty-two of this chapter, against the tax imposed by this article. For purposes of this subsection, the terms "qualified site" and "developer" shall have the same meaning as set forth in paragraphs two and three, respectively, of subdivision (a) of section twenty-two of this chapter. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Applies to taxable years beginning on or after April 1, 2005 * (ff) Environmental remediation insurance credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section twenty-three of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Applies to taxable years beginning on or after April 1, 2005 * (gg) Empire state film production credit. (1) Allowance of credit. A taxpayer who is eligible pursuant to section twenty-four of this chapter shall be allowed a credit to be computed as provided in such section twenty-four against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowable under this subsection for any taxable year exceeds the taxpayer's tax for such year, fifty percent of the excess shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. The balance of such credit not credited or refunded in such taxable year may be carried over to the immediately succeeding taxable year and may be deducted from the taxpayer's tax for such year. The excess, if any, of the amount of the credit over the tax for such succeeding year shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Repealed August 20, 2008 (hh) Nursing home assessment credit. (1) Allowance of credit. A taxpayer shall be allowed a credit against the tax imposed by this article equal to the amount that directly relates to the assessment imposed on a residential health care facility pursuant to paragraph (b) of subdivision two of section twenty-eight hundred seven-d of the public health law which is separately stated and accounted for on the billing statement of a resident of a residential health care facility and is paid directly by the individual taxpayer. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (ii) Security training tax credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in section twenty-six of this chapter, against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * (jj) Empire state commercial production credit. (1) Allowance of credit. A taxpayer that is eligible pursuant to the provisions of section twenty-eight of this chapter shall be allowed a credit to be computed as provided in such section against the tax imposed by this article. (2) Application of credit. If the amount of the credit allowable under this subsection for any taxable year exceeds the taxpayer's tax for such year, fifty percent of the excess shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interests shall be paid thereon. The balance of such credit not credited or refunded in such taxable year may be carried over to the immediately succeeding taxable year and may be deducted from the taxpayer's tax for such year. The excess, if any, of the amount of the credit over the tax for such succeeding year shall be treated as an overpayment of tax to be credited or refunded as provided in section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB Repealed December 31, 2011 * NB There are 2 sb (jj)'s * (jj) Biofuel production credit. A taxpayer shall be allowed a credit to be computed as provided in section twenty-eight of this chapter, against the tax imposed by this article. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. * NB There are 2 sb (jj)'s (kk) Conservation easement tax credit. (1) Credit allowed. In the case of a taxpayer who owns land that is subject to a conservation easement held by a public or private conservation agency, there shall be allowed a credit for twenty-five percent of the allowable school district, county and town real property taxes on such land. In no event shall the credit allowed under this subsection in combination with any other credit for such school district, county and town real property taxes under this section exceed such taxes. (2) Conservation easement. For purposes of this subsection, the term "conservation easement" means a perpetual and permanent conservation easement as defined in article forty-nine of the environmental conservation law that serves to protect open space, scenic, natural resources, biodiversity, agricultural, watershed and/or historic preservation resources. Any conservation easement for which a tax credit is claimed under this subsection shall be filed with the department of environmental conservation, as provided for in article forty-nine of the environmental conservation law and such conservation easement shall comply with the provisions of title three of such article, and the provisions of subdivision (h) of section 170 of the internal revenue code. Dedications of land for open space through the execution of conservation easements for the purpose of fulfilling density requirements to obtain subdivision or building permits shall not be considered a conservation easement under this subsection. (3) Land. For purposes of this subsection, the term "land" means a fee simple title to real property located in this state, with or without improvements thereon; rights of way; water and riparian rights; easements; privileges and all other rights or interests of any land or description in, relating to or connected with real property, excluding buildings, structures, or improvements. (4) Public or private conservation agency. For purposes of this subsection, the term "public or private conservation agency" means any state, local, or federal governmental body; or any private not-for-profit charitable corporation or trust which is authorized to do business in the state of New York, is organized and operated to protect land for natural resources, conservation or historic preservation purposes, is exempt from federal income taxation under section 501(c)(3) of the internal revenue code, and has the power to acquire, hold and maintain land and/or interests in land for such purposes. (5) Credit limitation. The amount of the credit that may be claimed by a taxpayer pursuant to this subsection shall not exceed five thousand dollars in any given year. (6) Application of the credit. If the amount of the credit under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid therein. (nn) Qualified emerging technology company facilities, operations and training credit. (1) A taxpayer that is a qualified emerging technology company pursuant to the provisions of section thirty-one hundred two-e (and specifically for the activities referenced in paragraph (b) of subdivision one of such section thirty-one hundred two-e) of the public authorities law, and that meets the eligibility requirements in paragraph two of this subsection, shall be allowed a credit against the tax imposed by this article. The amount of credit shall be equal to the sum (or pro rata share of the sum in the case of a partnership) of the amounts specified in paragraphs three, four, and five of this subsection, subject to the limitations in paragraph six of this subsection. (2) An eligible taxpayer shall (i) have no more than one hundred full-time employees, of which at least seventy-five percent are employed in New York state, (ii) have a ratio of research and development funds to net sales, as referred to in section thirty-one hundred two-e of the public authorities law, which equals or exceeds six percent during its taxable year, and (iii) have gross revenues, along with the gross revenues of its affiliates and related members, not exceeding twenty million dollars for the taxable year immediately preceding the year the taxpayer is allowed a credit under this subsection. For purposes of this paragraph, the term "related member" shall have the same meaning as set forth in clauses (A) and (B) of subparagraph one of paragraph (o) of subdivision 9 of section two hundred eight of this chapter, and the term "affiliates" shall mean those corporations that are members of the same affiliated group (as defined in section fifteen hundred four of the internal revenue code) as the taxpayer. (3) An eligible taxpayer shall be allowed a credit for eighteen per centum of the cost or other basis for federal income tax purposes of research and development property as defined in subparagraph (B) of paragraph two of subsection (a) of this section that is acquired by the taxpayer by purchase as defined in section 179(d) of the internal revenue code and is placed in service during the taxable year. Provided, however, for the purposes of this paragraph only, an eligible taxpayer shall be allowed a credit for such percentage of the (i) cost or other basis for federal income purposes for property used in the testing or inspection of materials and products, (ii) the costs or expenses associated with quality control of the research and development, (iii) fees for use of sophisticated technology facilities and processes, and (iv) fees for production or eventual commercial distribution of materials and products resulting from the activities of an eligible taxpayer as long as such activities fall under the activities listed in paragraph (b) of subdivision one of section thirty-one hundred two-e of the public authorities law. The costs, expenses and other amounts for which a credit is allowed and claimed under this paragraph shall not be used in the calculation of any other credit allowed under this article. (4) An eligible taxpayer shall be allowed a credit for nine percentum of "qualified research expenses", paid or incurred by the taxpayer in the taxable year. "Qualified research expenses" shall mean expenses associated with in-house research, use of sophisticated technology facilities and processes, and costs associated with the dissemination of the results of the products that directly result from such research and development activities; provided, however, that such costs shall not include advertising or promotion through media. In addition, costs associated with the preparation of patent applications, patent application filing fees, patent research fees, patent examinations fees, patent post allowance fees, patent maintenance fees, and grant application expenses and fees shall be eligible for such credit. In no case shall the credit allowed by this paragraph apply to expenses for litigation or the challenge of another entity's intellectual property rights, or for contract expenses involving outside paid consultants. (5) An eligible taxpayer shall be allowed a credit for qualified high-technology training expenditures as described in this paragraph paid or incurred by the taxpayer. (a) The amount of credit shall be one hundred percent of the training expenses described in subparagraph (c) of this paragraph, subject to a limitation of no more than four thousand dollars per employee per year for such training expenses. (b) Qualified high-technology training shall include a course or courses taken and satisfactorily completed by an employee of the taxpayer at an accredited, degree granting post-secondary college or university in New York state that (i) directly relates to the activities referred to in paragraph (b) of subdivision one of section thirty-one hundred two-e of the public authorities law, and (ii) is intended to upgrade, retrain or improve the productivity or theoretical awareness of the employee. Such course or courses may include, but are not limited to, instruction or research relating to techniques, meta, macro, or micro-theoretical or practical knowledge bases or frontiers, or ethical concerns related to such activities. Such course or courses shall not include classes in the disciplines of management, accounting or the law or any class designed to fulfill the discipline specific requirements of a degree program at the associate, baccalaureate, graduate or professional level of these disciplines. Satisfactory completion of a course or courses shall mean the earning and granting of credit or equivalent unit, with the attainment of a grade of "B" or higher in a graduate level course or courses, a grade of "C" or higher in an undergraduate level course or courses, or a similar measure of competency for a course that is not measured according to a standard grade formula. (c) Qualified high-technology training expenditures shall include expenses for tuition and mandatory fees, and software required by the institution, fees for textbooks or other literature required by the institution offering the course or courses, minus applicable scholarships and tuition or fee waivers not granted by the taxpayer or any affiliate of the taxpayer, paid or reimbursed by the taxpayer. Qualified high technology expenditures do not include room and board, computer hardware or software not specifically assigned for such course or courses, late-charges, fines or membership dues and similar expenses. Such qualified expenditures shall not be eligible for the credit allowed by this subsection unless the employee for whom the expenditures are disbursed is continuously employed by the taxpayer in a full-time, full-year position primarily located at a qualified site during the period of such coursework and lasting through at least one hundred and eighty days after the satisfactory completion of the qualifying course-work. Qualified high-technology training expenditures shall not include expenses for in house or shared training outside of a New York state higher education institution or the use of consultants outside of credit granting courses whether such consultants function inside of such higher education institution or not. (d) If a taxpayer relocates from an academic business incubator facility partnered with an accredited post-secondary education institution located within New York state, which provides space and business support services to taxpayers, to another site, the credit provided in this subsection shall be allowed for all expenditures referenced in subparagraph (c) of this paragraph paid or incurred in the two preceding taxable years that the taxpayer was located in such an incubator facility for employees of the taxpayer who also relocate from said incubator facility to such New York site and are employed and primarily located by the taxpayer in New York. Such expenditures in the two preceding years shall be added to the amounts otherwise qualifying for the credit provided by this subsection that were paid or incurred in the taxable year that the taxpayer relocated from such a facility. Such expenditures shall include expenses paid or incurred for an eligible employee who is a full-time, full-year employee of said taxpayer during the taxable year that the taxpayer relocated from an incubator facility notwithstanding (i) that such employee was employed full or part-time as an officer, staff-person or paid intern of the taxpayer when such taxpayer was located at such incubator facility or (ii) that such employee was not continuously employed when such taxpayer was located at the incubator facility during the one hundred eighty day period referenced in subparagraph (c) of this paragraph, provided such employee received wages or equivalent income for at least seven hundred fifty hours during any twenty-four month period when the taxpayer was located at the incubator facility. Such expenditures shall include payments made to such an employee after the taxpayer has relocated from the incubator facility for qualified expenditures if such payments are made to reimburse such an employee for qualified expenditures paid by the employee during such two preceding years. The credit provided under this subparagraph shall be allowed, in any year that said taxpayer qualifies as an eligible taxpayer. (e) For purposes of this subsection the term "academic year" shall mean the annual period of sessions of a post-secondary college or university. (f) For the purposes of this subsection the term "academic incubator facility" shall mean a facility providing low-cost space, technical assistance, support services and educational opportunities, including but not limited to central services provided by the manager of the facility to the tenants of the facility, to an entity located in New York state. Such entity's primary activity must be an activity described in paragraph (b) of subdivision one of section thirty-one hundred two-e of the public authorities law, and such entity must be in the formative stage of development. The academic incubator facility and the entity must act in partnership with an accredited post-secondary college or university located in New York state. An academic incubator facility's mission shall be to promote job creation, entrepreneurship, technology transfer, and provide support services to incubator tenants, including, but not limited to, business planning, management assistance, financial-packaging, linkages to financing services, and coordinating with other sources of assistance. (6) An eligible taxpayer may claim credits under this subsection for four consecutive taxable years, except, if a taxpayer is located in an academic incubator facility and relocates within New York state to a nonacademic incubator site, then the taxpayer (i) may make a revocable election to defer the credit provided under this subsection to the first taxable year beginning after the taxpayer relocates from an academic incubator facility, and (ii) shall be eligible for such credit for five consecutive years. In no case shall the credit allowed by this subsection to a taxpayer exceed two hundred fifty thousand dollars per year. (7) If the amount of credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon. (8) The credit allowed under this subsection shall not be applicable for taxable years beginning on or after January first, two thousand twelve. (yy) Order of credits. Credits allowable under this article which cannot be carried over and which are not refundable shall be deducted first. Credits allowable under this article which can be carried over, and carryovers of such credits, shall be deducted next, and among such credits, those whose carryover is of limited duration shall be deducted before those whose carryover is of unlimited duration. Credits allowable under this article which are refundable shall be deducted last. (zz) Cross references.--For credit in respect of: (1) taxes withheld on wages, see section six hundred seventy-three, (2) taxes imposed on a resident by other states, see section six hundred twenty, (3) taxes overpaid for a prior taxable year, see section six hundred eighty-six, * (4) taxes paid by a trust for a prior taxable year on income subsequently distributed, see sections six hundred twenty-one and six hundred forty. * NB Applies to taxable years beginning prior to 1988 * (4) taxes paid by a trust for a prior taxable year on income subsequently distributed, see sections six hundred twenty-one and six hundred thirty-five. * NB Applies to taxable years beginning after 1987
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