New York Tax on Lump-Sum Distributions
Lump-sum distributions from retirement plans are subject to special tax treatment in New York State and New York City. If you used federal Form 4972 to compute your federal tax on the capital gain portion of a lump-sum distribution, you must use Form IT-230 to calculate your New York State separate tax on lump-sum distributions.
Key Points for New York Residents
- Form IT-230 Required: New York State residents who used federal Form 4972 must complete Form IT-230 to compute the separate tax on lump-sum distributions.
- Part-Year Residents: If you were a part-year resident of New York City or New York State, you must compute your tax using Form IT-230, Part 2, and submit it with Form IT-201 or Form IT-203.
- Capital Gain Portion: The New York City tax on the capital gain portion of a lump-sum distribution is reported on Form IT-360.1, line 52.
- Worksheet Calculations: For full-year residents, use Worksheet A on Form IT-230. For part-year residents, use Worksheet D for New York City tax calculations.
- Income Percentage Schedule: If you received a lump-sum distribution during a period of nonresidence and used the 20% capital gain election on federal Form 4972, Part II, you must complete the Income percentage schedule on page 3 of Form IT-230 instructions.
Reporting Requirements
- Enter the New York State tax on the capital gain portion of the lump-sum distribution from Form IT-230, Part 2, line 2, on Form IT-201 or Form IT-203.
- For part-year New York City residents, enter the New York City tax on the capital gain portion on Form IT-360.1, line 52.
- Include any other New York State and New York City taxes from Form IT-201-ATT or Form IT-203-ATT on line 16 of Form IT-2105, excluding the ordinary income portion of lump-sum distributions.
Source:
Form IT-2105.9
Form IT-360.1
Form IT-230-I
Disclaimer: Always verify with official Federal or State Department of Revenue Forms and Instructions for the most accurate and up-to-date tax guidance.