1. (a) If a taxpayer or employer fails to report a change or correction or fails to file an amended New York State income tax return required to be filed by section 659 of the Tax Law with respect to:

   1. (1) a Federal change or correction or an amended Federal income tax return increasing the taxpayer's Federal taxable income, Federal items of tax preference, or total taxable amount or ordinary income portion of a lump sum distribution;
   2. (2) a Federal change or correction which is treated in the same manner as if it were a deficiency for Federal income tax purposes;
   3. (3) a Federal change or correction decreasing the taxpayer's Federal credit for employment-related expenses;
   4. (4) a Federal change or correction or amended Federal return of income tax withheld increasing the amount required to be deducted and withheld from wages for Federal income tax purposes; or

   5. (5) the disallowance, in whole or in part, of a taxpayer's claim for credit or refund of Federal income tax;

      the assessment of New York State income tax may be made at any time.

2. (b) If a taxpayer or employer reports a change or correction or files an amended New York State income tax return required to be filed by section 659 of the Tax Law with respect to:

   1. (1) a Federal change or correction or an amended Federal income tax return increasing the taxpayer's Federal taxable income, Federal items of tax preference, or total taxable amount or ordinary income portion of a lump sum distribution;
   2. (2) a Federal change or correction which is treated in the same manner as if it were a deficiency for Federal income tax purposes;
   3. (3) a Federal change or correction decreasing the taxpayer's Federal credit for employment-related expenses;
   4. (4) a Federal change or correction or amended Federal return of income tax withheld increasing the amount required to be deducted and withheld from wages for Federal income tax withholding purposes; or

   5. (5) the disallowance, in whole or in part, of a taxpayer's claim for credit or refund of Federal income tax;

      the assessment of New York State income tax, if not deemed to have been made upon the filing of the report or amended New York State income tax return, may be made at any time within two years after such report or amended New York State income tax return is filed. The amount of such an assessment may not exceed the increase in New York State income tax attributable to the Federal change or correction. The provisions of this subdivision do not affect the time within which or the amount for which an assessment may otherwise be made under article 22 of the Tax Law.

3. (c) If a taxpayer reports a change or correction or files an amended New York State income tax return required to be filed by section 659 of the Tax Law with respect to:

   1. (1) a change or correction in Federal taxable income, Federal items of tax preference or total taxable amount or ordinary income portion of a lump sum distribution reported on such taxpayer's Federal income tax return;
   2. (2) a change or correction in the Federal credit for employment-related expenses;
   3. (3) a change or correction which is treated in the same manner as if it were an overpayment for Federal income tax purposes; or

   4. (4) the filing of an amended New York State income tax return where an amended Federal income tax return was filed;

      a claim under this subdivision for credit or refund of any resulting overpayment of New York State income tax must be filed within two years from the time such report or amended New York State income tax return was required to be filed (that is, two years and 90 days from the date of final Federal determination). If the report or amended New York State income tax return is not filed within the period specified in section 659 of the Tax Law (90 days), interest on any resulting refund or credit ceases to accrue after such period has expired. The amount of such credit or refund may not exceed the amount of the reduction in New York State income tax attributable to such Federal change, correction or items amended on the taxpayer's amended Federal income tax return. The provisions of this subdivision do not affect the time within which or the amount for which a claim for credit or refund may otherwise be filed under article 22 of the Tax Law.

Tax Law, §§ 683(c) and 687(c)