1088 - Interest on overpayment.

§  1088.  Interest  on overpayment.--(a) General.--Notwithstanding the  provisions of section sixteen of the state finance law,  interest  shall  be  allowed  and  paid  as  follows  at  the overpayment rate set by the  commissioner of taxation and finance pursuant to  section  one  thousand  ninety-six,  or  if no rate is set, at the rate of six percent per annum  upon any overpayment in respect of the tax imposed by  article  nine  or  nine-a:    (1)  from  the  date  of  the overpayment to the due date of an amount  against which a credit is taken;    (2) from the date of the overpayment to a date (to  be  determined  by  the  commissioner) preceding the date of a refund check by not more than  thirty days, whether or  not  such  refund  check  is  accepted  by  the  taxpayer  after  tender of such check to the taxpayer. The acceptance of  such check shall be without prejudice to any right of  the  taxpayer  to  claim any additional overpayment and interest thereon.    (3)  Late  and  amended  returns  and  claims  for  credit  or refund.  Notwithstanding paragraph one or two of this subsection, in the case  of  an  overpayment claimed on a return of tax which is filed after the last  date prescribed for  filing  such  return  (determined  with  regard  to  extensions),  or  claimed  on  an  amended return of tax or claimed on a  claim for credit or refund, no interest shall be allowed or paid for any  day before the date on which such return or claim is filed.    (4) Interest on  certain  refunds.  To  the  extent  provided  for  in  regulations  promulgated by the commissioner of taxation and finance, if  an item of income, gain, loss, deduction or credit is changed  from  the  taxable  year  or  period in which it is reported to the taxable year or  period in which it belongs and the change results in an underpayment  in  a  taxable  year or period and an overpayment in some other taxable year  or period, the provisions of paragraph three  of  this  subsection  with  respect to an overpayment shall not be applicable to the extent that the  limitation  in such paragraph on the right to interest would result in a  taxpayer not being allowed interest for a length of time with respect to  an overpayment while being required to pay  interest  on  an  equivalent  amount of the related underpayment. However, this paragraph shall not be  construed  as  limiting  or  mitigating  the  effect  of  any statute of  limitations or any other provision of law relating to the  authority  of  such  commissioner  to issue a notice of deficiency or to allow a credit  or refund on an overpayment.    (5) Amounts of less than one dollar. No interest shall be  allowed  or  paid if the amount thereof is less than one dollar.    (b)  Advance  payment  of  tax  and  estimated tax.--The provisions of  subsections (h) and (i) of section one thousand eighty-seven  applicable  in  determining  the  date of payment of tax for purposes of determining  the period of limitations on credit or refund, shall  be  applicable  in  determining the date of payment for purposes of this section.    (c)  Tax  refund  within three months of claim for overpayment. (1) If  any overpayment of tax imposed by article nine or nine-a is credited  or  refunded  within  three  months  after  the  last  date  prescribed  (or  permitted by extension of time) for filing the return  of  such  tax  on  which  such  overpayment  was  claimed or within three months after such  return was filed, whichever is later, or within three  months  after  an  amended  return  was  filed  claiming  such  overpayment or within three  months after a claim for credit  or  refund  was  filed  on  which  such  overpayment was claimed, no interest shall be allowed under this section  on  any  such  overpayment. For purposes of this subsection, any amended  return or  claim  for  credit  or  refund  filed  before  the  last  day  prescribed  (or  permitted  by  extension of time) for the filing of thereturn of tax for such year or period shall be considered  as  filed  on  such last day.    (2)  In  the  case of an overpayment of tax credited due to absence of  application by the taxpayer for refund under subsection (a)  of  section  one  thousand  eighty-six,  where the commissioner notifies the taxpayer  that such overpayment has been so credited within three months after the  last date prescribed (or permitted by extension of time) for filing  the  return of such tax on which such overpayment was claimed or within three  months  after  such  return was filed, whichever is later, and where the  taxpayer subsequent to such notice makes a claim for refund  of  all  or  part  of  such  overpayment,  no  interest  shall  be allowed under this  section prior to the date of such claim for refund.    (d) Refund of tax caused by carryback.--For purposes of this  section,  if  any  overpayment  of  tax  imposed  by article nine-a results from a  carryback  of  a  net  operating  loss  or  a  net  capital  loss,  such  overpayment  shall  be  deemed not to have been made prior to the filing  date for the taxable year in  which  such  net  operating  loss  or  net  capital  loss  arises.  In  the  case  of  a  taxpayer which has made an  election under subchapter s of chapter one of the internal revenue code,  where an overpayment of tax results from a carryback of a net  operating  loss arising in a taxable year ending on or after December thirty-first,  nineteen  hundred seventy-six, or from a carryback of a net capital loss  arising in a taxable year ending  on  or  after  December  thirty-first,  nineteen  hundred  eighty-one,  unless  a claim for refund based on such  overpayment has been filed within a period ending twelve months and  one  hundred  eighty  days  subsequent to the last day of the taxable year in  which the net operating loss or net capital loss arises, interest on any  resulting refund or credit shall cease to accrue upon the conclusion  of  such  period.  Such  filing  date  shall be determined without regard to  extensions of time to file. For  purposes  of  subsection  (c)  of  this  section  any  overpayment  described  herein  shall  be  treated  as  an  overpayment for the loss year and such subsection shall be applied  with  respect  to such overpayment by treating the return for the loss year as  not filed before claim for such overpayment is  filed.  The  term  "loss  year" means the taxable year in which such loss arises.    (e) No interest until return in processible form.--    (1)  For purposes of subsections (a) and (c) of this section, a return  shall not be treated as filed until it is filed in processible form.    (2) For purposes of paragraph one of this subsection, a return is in a  processible form if--    (A) such return is filed on a permitted form, and    (B) such return contains--    (i) the taxpayer's name, address,  and  indentifying  number  and  the  required signatures, and    (ii)  sufficient  required  information  (whether  on the return or on  required attachments) to permit the  mathematical  verification  of  tax  liability shown on the return.    (f)   Overpayment   credited   against  past-due  legally  enforceable  debts.--If interest is payable pursuant to this section on that  portion  of an overpayment which is certified by the commissioner of taxation and  finance  to  the  comptroller  as  the  amount  to be credited against a  past-due legally enforceable debt pursuant to the provisions of  section  one  hundred  seventy-one-f  of  this chapter, or a city of New York tax  warrant judgment debt pursuant to the provisions of section one  hundred  seventy-one-l of this chapter, such portion of such an overpayment shall  cease to bear interest on the date of such certification.    (g)  Cross-reference.--For  provision  with  respect to interest after  failure to file a report or amended return under  subdivision  three  ofsection  two  hundred eleven, subsection (e) of section fourteen hundred  sixty-two or paragraph one of subdivision (e) of section fifteen hundred  fifteen, see subsection (c) of section one thousand eighty-seven.    (h)  Notwithstanding  any other provision in this section, for taxable  years beginning on or after January first, two thousand eight and before  January first, two  thousand  nine,  interest  will  be  allowed  on  an  overpayment on any return or report on which one or more empire zone tax  credits  are  claimed, only from the one hundred eightieth day after the  taxpayer files with the department an empire zone retention  certificate  issued pursuant to subdivision (w) of section nine hundred fifty-nine of  the  general  municipal  law  to the empire zone enterprise which is the  basis for the tax credit or credits claimed on the return or report.