N.Y. TAX Law § 662

§ 662. Computation of tax where taxpayer restores substantial amount\nheld under claim of right. (a) General. If:\n (1) an item was included in New York adjusted gross income for a prior\ntaxable year (or years) because it appeared that the taxpayer had an\nunrestricted right to such item, and\n (2) for the current taxable year the provisions of paragraph five of\nsubsection (a) of section thirteen hundred forty-one of the internal\nrevenue code apply to such item, then the tax imposed by this article\nfor the taxable year shall be an amount equal to\n (3) the tax for the taxable year computed without regard to this\nsection, minus\n (4) the decrease in tax under this article for the prior taxable year\n(or years) which would result solely from the exclusion of such item (or\nportion thereof) from New York adjusted gross income for such prior\ntaxable year (or years).\n (b) Special rules. (1) If the decrease in tax ascertained under\nparagraph four of subsection (a) of this section exceeds the tax imposed\nby this article for the taxable year, such excess shall be considered a\npayment of tax on the last day prescribed by law for the payment of tax\nfor the taxable year, and shall be refunded or credited in the same\nmanner as if it were an overpayment for such taxable year.\n (2) Nonresidents and part-year residents. In the case of a\nnonresident or part-year resident, the exclusion of an item from New\nYork adjusted gross income for a prior taxable year beginning after\nnineteen hundred eighty-seven under paragraph four of subsection (a) of\nthis section shall also be reflected, as appropriate, in the New York\nsource fraction.\n