Tax Law, § 659

(a) General

The report referred to in section 159.1 of this Part must be made on the prescribed form with respect to a change or correction in Federal taxable income, Federal items of tax preference, total taxable amount or ordinary income portion of a lump sum distribution, the Federal credit for employment-related expenses and the disallowance in whole or in part of a claim for credit or refund of Federal income tax. A change or correction in the amount an employer is required to deduct and withhold from wages for Federal income tax withholding purposes should be reported by submitting to the Tax Commission a detailed explanation of the final Federal determination or renegotiation agreement together with a statement showing the inclusive dates of the period involved, the amount of new York State personal income tax which should have been withheld and reported. The employer may submit either an amended form IT-2101 (PNS) or a copy of the final Federal determination or renegotiation agreement in lieu of submitting a detailed explanation of the final Federal determination or renegotiation agreement. Any New York State personal income tax which an employer is required to deduct and withhold as a result of a Federal change or correction should accompany the report required by section 159.1 of this Part. The prescribed form used to report the Federal change or correction must be accompanied by a copy of the final Federal determination or renegotiation agreement as well as any of the pertinent data in all cases in which a New York State income tax refund, based on such final determination or a renegotiation, is claimed. Where additional New York State income tax is due, the taxpayer may, in lieu of a copy of the final determination or renegotiation agreement, give full details of the changes on such prescribed form. The prescribed form used to report the Federal change or correction, together with any supplemental forms (where applicable) must be accompanied by full payment of any additional New York State income tax shown to be due thereon and must be forwarded separately from, and not as part of, any other report or New York State income tax return. The report must be made regardless of whether the taxpayer believes any modification of such taxpayer's New York State income tax liability is required. However, a nonresident taxpayer must make such report, and must file such amended New York State income tax return with the Tax Commission as required by section 159.3 of this Part, only if the Federal change, results of renegotiation or amended Federal income tax return relates to an increase or decrease in such nonresident taxpayer's New York State income tax liability.

(b) Husband and wife

A husband and wife who file a joint Federal income tax return but file separate New York State personal income tax returns on one form must file separate forms to report Federal adjustments affecting their separate New York State personal income tax returns. Each report must show the changes made on the Federal income tax return attributable to the reporting spouse. These separate reports must be filed together. If the Federal changes are attributable solely to one spouse, that spouse must file the prescribed form used to report the Federal changes. However, such form must include the name and social security number of the other spouse and contain a statement that the Federal changes do not affect the separate New York State personal income tax return of the other spouse.