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New York State Department of Taxation and FinanceIT-201-IResident Income Tax ReturnNew York State City of New York InstructionsCity of YonkersInstructions for Form IT-201(for full-year New York State residents only)New for 2001 (see page 4 for more detailed information) Standard deduction for filing status Áand filing status Ä increased to 13,400 New college tuition credit or collegetuition itemized deduction available New York City tax rate reduced New York City school tax credit increasedfor city residents under 65 Farmers’ school tax credit computationrevised EZ and ZEA wage tax credits increased QETC employment and investmentcredits expanded Earned income credit increased New income tax credits available for:- the purchase of an automated externaldefibrillator machine;- the removal, closure, or installation of aresidential fuel oil storage tank;- applicable costs paid for a green building;- the construction or rehabilitation oflow-income, rent-restricted housing. Two new Empire Zone Program (QEZE)credits available Form number changesThink e-file. It’s easy, fast, and safe.See page 9 and log on to www.tax.state.ny.us/elfmore information.forChanges were required tothese instructions after theywent to print. For additionalinformation, Click Here.This booklet also contains: Instructions for Form IT-201-ATT, Itemized Deduction, and Other Taxes and Tax Credits Instructions for Form IT-200, Resident Income Tax Return (see pages 45 through 51) Instructions for Form IT-214, Claim for Real Property Tax Credit for Homeowners and Renters Instructions for Form IT-215, Claim for Earned Income Credit Instructions for Form IT-216, Claim for Child and Dependent Care Credit Form IT-2104, Employee’s Withholding Allowance Certificate and InstructionsThe last several months have represented a time of remarkable challenge forthe state of New York, beginning with the cowardly terrorist attacks ofSeptember 11, 2001, on the World Trade Center.record-setting 1.4 million taxpayers filed their returns electronically. And theDepartment’s Web site – www.tax.state.ny.us – registered more than 30 million“hits” in 2001 as taxpayers made increased use of the services available on thesite. We also offer a toll-free taxpayer assistance hotline at 1 800 CALL TAX,which will put you in touch with one of our taxpayer services representatives.Now, as we move forward in our rebuilding efforts, we are fortunate thatpolicies enacted over the last several years have infused an essential strengthinto New York’s economy.I encourage you to take advantage of the myriad services offered by theDepartment of Taxation and Finance and thank you for helping us achieve ourgoal of being a world-class service organization.For example, since 1995, 19 different taxes have been cut a total of 57 times,fueling New York’s economic resurgence by saving taxpayers nearly 55 billionto date. When the cuts are fully effective, New York taxpayers will have realized 100 billion in savings.This year, we are also engaged in an important new initiative in conjunction withthe New York State Division of Criminal Justice Services. For the first time ever,we are using our IT-200-P and IT-201-P resident tax packets to increaseawareness of the issue of missing children and adults. The packets contain aspecial four-page insert (Publication 40, Missing Children and Young Adults) thatincludes information about individual missing children and adults, as well assafety tips. If you would like to order a copy of Publication 40, see Need Help? inthese instructions. The information this publication contains might save a life.From Commissioner Arthur J. Roth:When filing their 2001 tax returns, taxpayers will be able to take advantage ofnew tax savings, including a higher education tuition credit or deduction. Thecredit and deduction are available for undergraduate study, with the maximumamount of allowable college tuition expenses of 10,000 phased in equallyover a four-year period beginning with tax year 2001.Other major tax changes include an increase in the standard deduction formarried couples filing a joint tax return and an increase in the earned incomecredit. For working families, the earned income credit increases from 22.5% to25% of the federal credit for tax year 2001, with even further increasesscheduled for future tax years.Meanwhile, the level of service offered by the Department of Taxation andFinance to you, our customers, has continued to climb. For instance, more andmore taxpayers are making use of the electronic filing option as a moreconvenient, more secure way to file their tax returns. In fact, last year, aAs you take the time to prepare your New York State personal income tax return,please take a few moments to remember the sacrifices that we and ourforefathers have endured to make this state and this country great.God Bless America.Sincerely,Arthur J. RothCommissioner
2 How to avoid mistakes that slow down the processing of your return and refund:Use your preprinted peel-off label.The peel-off label on the inside frontcover of your income tax packet isdesigned to speed processing andprevent common errors that may delayrefund checks. But do not attach thelabel until you have completed andchecked your return. See Step 5 onpage 35 of these instructions.Make sure you enter your socialsecurity number(s) in the boxes to theright of your names(s) on the front ofthe return.The peel-off label no longer displaysyour social security number(s). You (andif married, your spouse, whether filing ajoint return or married filing separately)must enter your social securitynumber(s) in the boxes in the top rightcorner of Form IT-201, whether or notyou are using the preprinted peel-offlabel.Employees’ Retirement System, theNew York City Teachers’ RetirementSystem, the New York City PolicePension Fund, the New York City FireDepartment Pension Fund, or a memberof the Manhattan and Bronx SurfaceTransit Operating Authority (MABSTOA)pension plan, you must enter the amountof public employee 414(h) retirementcontributions you made in 2001 online 20. New York City IRC 125 flexiblebenefits program must be entered online 22.IRC section 125 amounts deducted ordeferred from your salary under aflexible benefits program established bythe city of New York and certain otherNew York City public employers must beentered on line 22 of Form IT-201. Check the New York standarddeduction table on page 26 and makesure that you have claimed thecorrect standard deduction for yourfiling status on line 34.For example, do not claim a head ofhousehold filing status and then claim astandard deduction for a single ormarried filer.Be sure to mark an “X” in either theYes or No box at item B.Item B asks whether or not you can beclaimed as a dependent on anothertaxpayer’s federal return. Be sure tomark an “X” in either the Yes or No box,especially if you are single, since theanswer determines the amount ofstandard deduction allowed.Public employee 414(h) retirementcontributions must be entered online 20.If you are a Tier 3 or Tier 4 member ofthe New York State and LocalRetirement Systems (including theNew York State Employees’ RetirementSystem and the New York State Policeand Fire Retirement System), New YorkState Teachers’ Retirement System, oran employee of the State or CityUniversity of New York who belongs tothe Optional Retirement Program or anytier member of the New York City Complete the New York Dependentexemption worksheet on page 26 andenter the line c number on line 36.Some taxpayers make the mistake ofentering the number of exemptions thatthey claimed on their federal return online 36 of their Form IT-201. In general,federal exemptions include bothpersonal and dependent exemptions.However, only dependent exemptionsare allowed on your New York Statereturn. The value of each New Yorkdependent exemption is 1,000. Toensure that you receive credit for thecorrect number of New York dependentexemptions, complete the worksheet onpage 26 of these instructions beforemaking an entry at line 36 of your return. Use the correct New York tax table.Be sure you are using the correct taxtable to look up your tax; sometaxpayers erroneously use the city taxtable to determine their state tax, andvice versa. (The state tax table is on redpages 61 through 68.) Enter your refund or amount you oweon the correct line of your return.Taxpayers sometimes enter the amountthey owe on the refund line (line 70)instead of on the amount you owe line(line 72). The taxpayer then expects arefund, when in fact he or she owes tax.This will result in a bill for the tax owedplus interest and possible penalty. Thissituation can be avoided by making surethat if you owe tax, you enter the amountowed on the correct line and pay thisamount when you file your return. Amount applied to 2002 estimatedtax.If you elect to apply all or part of theamount overpaid to your 2002 estimatedtax, that election generally cannot bechanged after April 15, 2002, or, if youlive in the state of New York (except thecity of New York and the counties ofNassau, Rockland, Suffolk, andWestchester), Connecticut, Maine,Massachusetts, New Hampshire,Rhode Island, or Vermont, afterApril 16, 2002. Nonobligated spouses should attachForm IT-280 to their returns.If you are a nonobligated spouse who isfiling Form IT-280 to disclaim yourspouse’s debt, use the originalForm IT-280. Do not use a photocopy. Toorder Form IT-280, see Need help? onthe back cover.If you do not need a tax packet:If you use a paid preparer, or if you use computer software to prepare your return, or if for any other reason you do not needa tax packet mailed to you for next year’s taxes, please mark an “X” in the box at item C of your Form IT-201. By markingthis box, you will help us reduce printing and mailing costs.When you mark the box, we will send you a preprinted peel-off label that you or whoever prepares your return should use onyour 2002 return. Be sure to use your label; if you do not, it may cause a delay in processing your return and your refund, ifyou are entitled to one.Americans with Disabilities ActIn compliance with the Americans with Disabilities Act, we will ensure that our lobbies, offices, meeting rooms and other facilitiesare accessible to persons with disabilities. If you have questions about special accommodations for persons with disabilities,please call the information numbers under Need help? on the back cover.
Table of contents3Commissioner’s message . front coverHow to avoid mistakes . (inside front cover) 2Highlights for tax year 2001 . 4General information. 5Who must file . 5Residents of NY State, NY City, and Yonkers . 5Nonresidents of Yonkers . 5Partnerships/limited liability companies . 5Estates and trusts . 5Homeowners and renters . 5Farmers’ school tax credit . 5College tuition credit . 6Earned income credit . 6Child and dependent care credit . 6City of New York school tax credit . 6Deceased taxpayers . 6Innocent spouse relief . 6Members of the armed forces . 6Nonresidents and part-year residents . 6Resident, nonresident andpart-year resident defined . 7Your rights under the Tax Law . 7Which form to file . 8Can you file Form IT-200 instead of IT-201? . 8Worksheet for figuring which deduction is larger . 8E-file . 9Other forms you may have to file . 10When to file . 11Extension of time to file . 11Where to file . 11Private delivery services . 11Reminders . 12Interest and penalties . 13Voluntary gifts/contributions . 13, 14, and 29Steps 1, 2 and 3 for preparing your returnLine instructions for Form IT-201 (continued)Standard deduction table .Dependent exemption worksheet .NYS tax computation: worksheets 1 and 2 .NYS household credit tables .City of NY household credit tables .Yonkers worksheet .Voluntary gifts/contributions (line 56) .Payments and refundable credits (lines 58-67) .NYS child and dependent care credit (line 58) .NYS earned income credit (line 59) .Real property tax credit (line 60) .College tuition credit (line 61) .City of NY school tax credit (line 62) .Refund or amount you owe (lines 69-73) .Collection of debts from your refund (line 70) .Disclaiming of spouse’s debt (line 70) .Direct deposit (lines 70a, b, and c) .Estimated tax/estimated tax penalty .Pay your taxes by credit card .26262627282930303030303030323232323333Steps 4 through 9 for preparing your return. 35Peel-off label, social security numbers, death oftaxpayer, receive your refund, sign your return . 35Return assembly, checklist,preaddressed envelope . 36Line instructions for Form IT-201-ATT. 37NY State itemized deduction (lines 1-16) . 37Adjustment worksheets 1, 2, 3, and 4 . 37 and 38College tuition itemized deduction (line 15) . 39Worksheet 5 . 39Other New York State taxes (lines 17-35) . 40Other city of New York taxes (lines 36-40) . 41Other tax credits (lines 41-80) . 41Nonrefundable credits (lines 41-65) . 41Refundable credits (lines 66-79) . 43Claim of right credit (lines 77-79) . 44. 14Privacy notification . 14Line instructions for Form IT-201 . 15Filling in your tax return .Items A, C, and D .Joint and several tax liability .Federal income and adjustments (lines 1-18) .Simplified instructions with worksheet .NY adjustments/NY adjusted gross income .New York additions (lines 19-22) .Public employee 414(h) retirementcontributions (line 20) .NY City IRC 125 amounts; A-19 (line 22) .New York subtractions (lines 24-30) .Pensions of NYS, local & federal govts. .Pension and annuity income exclusion .Tax computation, credits, andother taxes (lines 34-54) .Standard or itemized deduction .15151516161718Line instructions for Form IT-200 . 45Instructions for Form IT-214Instructions for Form IT-215Instructions for Form IT-216. 52. 55. 57New York State Tax Table (red pages) . 61City of New York Tax Table (white pages) . 69School districts and code numbers . 77Form IT-2104 and instructions18202121212626Index to instructions. inside back coverNeed help? (phone and fax numbers,internet access) . back cover. back coverResolving tax problems
4Form IT-201 highlights for tax year 2001On October 1, 2001, as these instructions were being prepared for printing, the New York State Legislatureand Governor Pataki were considering tax law changes that could affect your 2001 tax return and 2002estimated taxes. For up-to-date information, visit our Web site atwww.tax.state.ny.us Standard deductionThe standard deduction for married filing jointly andqualifying widow(er) is increased to 13,400. There is nochange to the standard deduction for the other filingstatuses. New York State earned income credit increasedThe New York State earned income credit is increasedfrom 22.5% of the federal earned income credit to 25% ofthe federal credit. College tuition credit or itemized deductionFor tax years beginning on or after January 1, 2001, if you,your spouse, or your dependent(s) were a student enrolledat or attending an institution of higher education, you maybe entitled to a new college tuition credit. The collegetuition credit is available to full-year New York Stateresidents only. If the credit exceeds your tax for the year,the excess credit will be refunded, without interest.You may elect to claim the New York college tuitionitemized deduction instead of the college tuition credit ifyou itemized your deductions on your federal return. Theitemized deduction is available to residents, nonresidents,and part-year residents. For more information, see newForm IT-272, Claim for College Tuition Credit for New YorkState Residents. To order this form, see Need help? on theback cover. New York City tax rate reducedThe New York City top tax rate is reduced to 3.592%. New York City school tax creditThe New York City school tax credit has increased forNew York City residents under the age of 65. If you areunder 65 years of age as of January 1, 2002, and you aremarried filing jointly or a qualifying widow(er), the credit is 125; for all others under age 65, the credit is 62.50. Automated external defibrillator machine creditA new credit is available for the purchase of an automatedexternal defibrillator machine. The credit is equal to thecost of the unit, but may not exceed 500 per unit (there isno limit on the number of units for which the credit may betaken). The credit may not be carried forward and is notrefundable. For more information, see page 41, and newForm IT-250, Claim for Credit for Purchase of anAutomated External Defibrillator. Two new credits under the Empire Zone (EZ) ProgramThere is a new credit for real property taxes paid by aqualified empire zone enterprise (QEZE) on property whichit owns in an empire zone. There is also a new QEZE taxreduction credit. For more information, see pages 41 and44, and Form IT-604, Claim for QEZE Credit for RealProperty Taxes and QEZE Tax Reduction Credit. Residential fuel oil storage tank creditA new credit is available for the cost of removal and thecost of permanent closure of an unprotected residentialfuel oil storage tank, and the installation costs of a new residential fuel oil storage tank used to provide heating fuelfor single- to four-family residences located in New York.For more information, see page 43 and new Form IT-254,Claim for Residential Fuel Oil Storage Tank Credit.Green building creditThe new green building credit consists of the sum ofsix credit components, and in each case is based on theapplicable costs paid or incurred. The credit applies tocosts paid or incurred on or after June 1, 1999, forproperty placed in service, or which has received a finalcertificate of occupancy, in tax years beginning on or afterJanuary 1, 2001. For more information, see page 43, andnew Form DTF-630, Claim for Green Building Credit. Low-income housing creditA new low-income housing credit is now allowed for theconstruction or rehabilitation of rent-restricted housing inNew York State. For more information, see page 43 andnew Form DTF-624, Claim for Low-Income HousingCredit. Farmers’ school tax creditThe base acreage amount used to compute the farmers’school tax credit is increased by acreage enrolled orparticipating in a federal environmental conservationacreage reserve program pursuant to Title Three of theFederal Agricultural Improvement and Reform Act of 1996. Wage tax credit increasedThe wage tax credit for wages paid in empire zones (EZ)and zone equivalent areas (ZEA) has been increased. Thecredit increased to 3,000 for targeted employees and to 1,500 for other individuals. In addition, the period in whichtaxpayers may claim the ZEA wage tax credit is increasedfrom two to five years. QETC employment and investment creditsThe QETC employment and investment credits areexpanded to remanufacturers of certain commodities thatwould otherwise enter the solid waste stream. Form number changesSelected DTF prefix credit claim forms previously used forboth income and corporation tax purposes have beenobsoleted and replaced with separate income tax andcorporation tax forms. Listed below are the old DTFnumbers and the new income tax (IT) form numbers: Form DTF-601 is now Form IT-601, Claim for EZWage Tax Credit; Form DTF-601.1 is now Form IT-601.1, Claim for ZEAWage Tax Credit; Form DTF-602 is now Form IT-602, Claim for EZ CapitalTax Credit; Form DTF-603 is now Form IT-603, Claim for EZInvestment Tax Credit and EZ Employment IncentiveCredit; Form DTF-605 is now Form IT-605, Claim for EZInvestment Tax Credit and EZ Employment IncentiveCredit for the Financial Services Industry.
Need help? See the back cover of these instructions.General information5Who must fileNew York residentsYou must file a New York State residentreturn if you meet any of the followingconditions:— You have to file a federal return.— You did not have to file a federal returnbut:your federal filingstatus would havebeen:and you hadfederal adjustedgross income (plusNew Yorkadditions)* of morethan:single, and you can beclaimed as adependent on anothertaxpayer’s federalreturn . 3,000single, and you cannot beclaimed as a dependent onanother taxpayer’s federalreturn ormarried filing joint return ormarried filing separatereturn orhead of household orqualifying widow(er) . 4,000*(New York additions are explained onpages 18 through 20 of these instructions;see the federal instructions to find yourfiling status and figure your federaladjusted gross income.)— You want to claim a refund of any New YorkState, city of New York, or city of Yonkersincome taxes withheld from your pay.— You want to claim a refund of any of thefollowing New York State, city of New York,or city of Yonkers credits: New York State earned income credit;New York State child and dependentcare credit;Farmers’ school tax credit;Investment credit for new businesses;Empire zone (EZ) investment tax creditand EZ employment incentive creditfor new businesses;Financial services industry (FSI)investment credit for new businesses;Financial services industry EZinvestment tax credit and EZemployment incentive credit for newbusinesses;EZ wage tax credit for newbusinesses;ZEA wage tax credit for newbusinesses;Qualified emerging technology company(QETC) employment credit for newbusinesses; Industrial or manufacturing business(IMB) credit for energy taxes; College tuition credit;QEZE credit for real property taxes; orClaim of right credit (New York State,city of New York, and city of Yonkers).— You are subject to the minimum income tax.— You are subject to the separate tax onlump-sum distributions.Did you use federal Form 8814 or federalForm 8615 to report your child’sinvestment income?If you elected to file federal Form 8814 withyour federal return, the amount of your child’sinvestment income over 1,500 that wasincluded in your federal gross income will bereported on your New York return and taxed atyour rate. In this case, you will not file aNew York return for your child. However, it willbe to your advantage to file a New York returnfor your child since there will not be anyNew York tax on the first 3,000 of your child’sinvestment income. To qualify for filing a NewYork return for your child, you must first file afederal Form 8615 (instead of federal Form8814) to report your child’s investmentincome.Residents of New York Cityand YonkersIf you were a New York City or Yonkersresident for the tax year and you have to file aNew York State return, report your New YorkCity income tax or your Yonkers residentincome tax surcharge on your state return.Nonresidents of YonkersIf you were not a Yonkers resident for 2001 butyou earned wages or self-employment incomefrom within the city of Yonkers, and you haveto file a New York State income tax return, youmust also file Form Y-203, City of YonkersNonresident Earnings Tax Return.If you are married, you cannot file jointly onForm Y-203. If you each have taxableearnings, you must each file a separateForm Y-203. Form Y-203 is due at the sametime as your state return and must be attachedto it. For more information, see the instructionsfor Form Y-203.Partnerships/limited liabilitypartnerships or companiesPartnerships, limited liability partnerships(LLPs) and limited liability companies (LLCs),limited liability investment companies (LLICs)and limited liability trust companies (LLTCs)that are treated as partnerships for federalpurposes are not subject to the New YorkState personal income tax, but individualmembers of the partnerships are.If your partnership has a partner who is aNew York State resident, or if the partnershiphas any income from New York State sources,it must file Form IT-204, Partnership Return. Ifyou were a partner, transfer your share ofincome or loss, deductions and adjustmentsfrom Form IT-204 to your Form IT-201. If yourpartnership carried on a business in New YorkCity, it may also be required to file FormNYC-204, City of New York UnincorporatedBusiness Tax Partnership Return.Since New York State does not administer theNew York City unincorporated business tax, donot file your NYC-204 with your state return.How to get New York City formsIf you need to get tax forms and instructionsfrom the NYC Department of Finance, youcan access the NYC government Web site athttp://www.nyc.gov/financeYou can also get forms by calling New YorkCity Tax Fax at (718) 935-6114 from thetelephone connected to your fax machine ormodem (24 hours a day, 7 days a week); orby using the Access Finance Kiosk to printthe forms you need (for hours and locations,call (718) 935-6736 and select message143).A CD-ROM is available for viewing andprinting forms. To order, call (718) 935-6739any time, or call Taxpayer Assistance at(718) 935-6000 weekdays from 9 a.m. to4:30 p.m.Estates and trustsEstates and trusts are subject to the New YorkState personal income tax. The fiduciary for anestate or trust must file Form IT-205, FiduciaryIncome Tax Return. Each beneficiary of anestate or trust must include his or her share ofthe estate or trust income on Form IT-201. Formore information on responsibilities ofbeneficiaries, see Beneficiaries (estates andtrusts) on page 17 of these instructions.Homeowners and rentersIf you are a New York State resident and ifyour household gross income was 18,000 orless, you may be entitled to a state tax creditfor part of the real property taxes or rent youpaid during the year. Qualified persons 65 orolder can claim a credit of up to 375. Forqualified persons under 65, the maximumcredit is 75. To claim the credit, completeForm IT-214, Claim for Real Property TaxCredit for Homeowners and Renters, andattach it to your return.Even if you do not have to filean income tax return, you maystill claim the real property tax credit byfiling only Form IT-214. For moreinformation, see Instructions for Form IT-214on page 52 and Publication 22, GeneralInformation on New York State’s Real PropertyTax Credit for Homeowners and Renters.Farmers’ school tax creditIf you are engaged in thebusiness of farming, you maybe entitled to an income tax credit for theschool district property taxes you paid. Tosee if you qualify and for more information,see the instructions for Form IT-217, Claim forFarmers’ School Tax Credit, and Publications51, Questions and Answers on New YorkState’s Farmers’ School Tax Credit, and 51.1,Update to Publication 51.(continued)
6General informationNeed help? See the back cover of these instructions.Who must file (continued)Residents of New York Stateclaiming the college tuitioncreditIf you paid qualified collegetuition expenses, you may beeligible for either an itemized deduction ora credit on your New York State personalincome tax return. For more information, seethe instructions for line 61 on page 30 and theinstructions for Form IT-272, Claim for CollegeTuition Credit for New York State Residents.Note: Tuition payments required forenrollment or attendance in a course ofstudy leading to the granting of a postbaccalaureate or other graduate degree donot qualify for purposes of the collegetuition credit or itemized deduction.Residents of New York Stateclaiming the earned incomecreditIf you are a New York Stateresident and claimed a federalearned income credit, you may be entitledto a state earned income credit. To claim thecredit, complete Form IT-215, Claim forEarned Income Credit, and attach it to yourreturn. For more information, see page 55.Residents of New York Stateclaiming the child anddependent care creditIf you are a New York State resident andclaimed the federal child and dependent carecredit, you may be entitled to a state child anddependent care credit.You may still be entitled toclaim the state credit even ifyou did not claim the credit on your federalreturn or di
New York State City of New York . For example, since 1995, 19 different taxes have been cut a total of 57 times, fueling New York's economic resurgence by saving taxpayers nearly 55 billion to date. When the cuts are fully effective, New York taxpayers will have realized 100 billion in savings.
