New York Itemized Deductions IT-196
For New York State income tax purposes, taxpayers may choose to itemize deductions using Form IT-196, regardless of whether they itemized on their federal return. This form allows deductions for medical expenses, unreimbursed employee business expenses, taxes, interest, charitable contributions, and certain miscellaneous expenses. New York State tax law differs from federal law, particularly post-2017 Tax Cuts and Jobs Act (TCJA), so adjustments are required to align with New York’s rules.
Key Features of Form IT-196
- Itemized Deduction Choice: You can elect to itemize even if you took the standard deduction federally. This may result in lower New York State and New York City income tax.
- Adjustments for NYAGI: If your New York Adjusted Gross Income (NYAGI) exceeds $100,000, you must apply an itemized deduction adjustment (Line 46). The adjustment varies based on income level:
- $100,000 or less: No adjustment (leave Line 46 blank)
- $100,001 to $475,000: Use Worksheet 3
- $475,001 to $525,000: Use Worksheet 4
- $525,001 to $1,000,000: Enter 50% of Line 45 on Line 46
- $1,000,001 to $10,000,000: Enter 50% of Line 19 on Line 47
- Over $10,000,000: Enter 25% of Line 19 on Line 47
- Additional Deductions Allowed by NY: New York permits deductions not allowed under federal law (IRC), such as expenses related to income exempt from federal tax but taxable in New York. These are added on Line 44 (Addition Adjustments H, I, J, K).
- Standard vs. Itemized: Compare your itemized deduction (Line 49) with the New York standard deduction (from Form IT-201-I or IT-203-I). Choose the larger amount for greater tax savings. If you itemize, you must file Form IT-196 with your return.
Special Deductions and Adjustments
- Casualty and Theft Losses: Use procedures from 2017 IRS Publication 547. For business-use homes, use 2017 Form 8829 (line 34) to calculate deductible loss.
- Medical Expenses: Deductible portion of unreimbursed medical and dental expenses may be claimed.
- Charitable Contributions: Cash or check donations reported on federal Schedule A, line 11, may be included if elected as qualified contributions.
- Performing Artists: Excess performing-arts-related business expenses beyond federal adjustments (Schedule 1, line 12) can be claimed on Line 21.
Important Notes
- Form IT-196 is required if you choose to itemize deductions for New York State tax purposes.
- All addition adjustments (Line 44) must be documented on a separate sheet labeled “Itemized deduction schedule-addition adjustments” with your name and SSN.
- For federal interest deduction rules, New York uses the pre-2018 federal rules (as of tax year 2017).
Source:
Form IT-196.pdf
Disclaimer: Always verify details with official Federal or State Department of Revenue Forms and Instructions.