Mwisa Chisunka Senior Tax Analyst Mwisa_chisunka@tax.state.ny.us

1. 2010 Coordinators Training November 9, 2010 MwisaChisunka Senior Tax Analyst Mwisa_chisunka@tax.state.ny.us www.nystax.gov

2. Private and Confidential • In accordance with Internal Revenue Service Taxpayers utilizing volunteer program services provide personal information to the volunteers, such as names, addresses, social security numbers, birth dates, and bank account information. • Therefore, partners and volunteers must keep the information confidential and protect it from unauthorized individuals and misuse.

3. NYS Tax Contact Information • Tax Practitioners Hot Line - (518) 457-5451 • Forms Control Unit phone number: (518) 244-1911 TP-3 Forms Order (Can order TP-300 and TP-301) • E-file Helpdesk line - 518) 457-6387 • Online Tax Center Assistance (518) 485-7884 • Child Support Helpline 1-888-208-4485 (request review if noncustodial EITC is denied) • 1099-G: (518) 485-0799l • www.nystax.gov

4. Resources Available for Volunteers • TP -300 Quick Reference Guide • TP -301 NYS Intake Sheet • Publication 80 – General Information for NYS residents • Publication 310NY – NYS Earned Income Tax Credit • Pub10-W-FAQ’s -College Tuition Credit or Itemized Deduction • Publication 94 – Should I be Paying Estimated taxes • Publication 84- Handbook for e-filers of 2009 PIT Returns.  • Publication 99IND-NYS/NYC Income tax credits for Individuals

5. Resources Available for Volunteers • Publication 22 - FAQS: NYS Real Property Tax Credit For Homeowners and Renters • Publication 36 - General Information for Senior Citizens and Retired Persons • Publication 38 – Your Rights as a Taxpayer • Publication 46 - Common Reasons for Income Tax Adjustments • Publication 140-W-FAQs: New York State Lottery Winners - What are my Tax Responsibilities for New York State

6. Review of 2009 – Most Common Errors • Amount of public employee 414(h) retirement contribution, subject to NYS tax, reported on return not equal to amount reported on Form(s) W-2. (Reject Code 0103) • Withholding (NY State, NY City, or Yonkers) should not be greater than or equal to wages. (code 502)  • Required information missing for qualifying person reported on Form IT-216. (code 376)  • NYS wages should not be equal to zero when W-2 shows NY wages. (code 100)   • Amount of NYS withholding reported on return not equal to amount reported on wage and tax statements. (code 129) • NY City withholding entered on W-2 not equal to amount on the return, or NY City withholding on W-2 not carried to NY City withholding claimed on the return, but the W-2 does not have NY City withholding. (code 130) 

7. Review of 2009 – Most Common Errors • NYS wages cannot be more than federal wages. (code 98)   • Amount of wages, tips and other compensation reported on return less than amount reported on Form(s) W-2 and/or 1099-R. (code 101)  • A computational error occurred in calculating the NYS Adjusted Gross Income on return. (code 105)  • Negative amount not allowed for these lines. (code 99)  • The return was rejected due to an inappropriate city tax computation; full-year residency for NYC or Yonkers not properly indicated. (code 110)  • One Child’s Social Security Number cannot be the same as another child’s. (code 650)

8. Site Reviews • The New York State Department of Taxation and Finance: • Conducted 62 statewide site reviews - (33 sites downstate, 29 sites upstate). Three of the sites were closed (2 sites downstate, 1 site upstate). • Reviews was conducted to determine: • whether the sites had NYS tax law training, • whether the sites utilized the NYS Intake Sheet, • whether the site utilized the TP-3 order form, • whether the site was E-file, Paper or E-file/Paper whether the site had a quality review process (utilizing IRS criteria).

9. Site Reviews • Special Training Needs or Recommendations from volunteers: • Training: • IT 214 • Pensions ( Q and A on Pensions for senior sites ) • 414 H • More Credit Training • Resident tax credit and nonresident training for sites located near bordering states • Recommendations: • NYS general brochure or guidelines on the non custodial EITC • phone number for denial of noncustodial EITC added in the TP-300 • IT-245 (firefighter credit) added to the taxwise tree. • Taxpayer Advocate Number added to TP-300 • IT-2105 estimated taxes added to taxwise • Increase the amount for NYS filing requirement

10. Changes for 2010 Training • Department will create a URL for volunteers to view the power point and pertinent updates • Order number of instructions needed for your site on form TP-3 • NYS will provide training: • Basic/ Intermediate (include basic credits, itemized deductions and Taxwise updates) • Advanced (in addition to information covered in intermediate will cover nonresident issues and resident tax credit issues) • Military (only to those trained in IRS military training) • Nonresident aliens (to scholars and students in conjunction with IRS training)

11. Changes for 2010 Training • Department will provide an addendum to the Federal Publication 4491W for NYS training for E-file users. • Addendum will consist of: • an intake sheet (TP-301) completed • answer sheet listing various lines on the NYS income tax returns for e-filing.

12. What’s New for 2010?

13. New York Itemized Deductions • Limit of itemized deductions • New York adjusted gross income over $1million and not more than $10 million, the New York itemized deduction is limited to 50% of charitable contributions (Tax years 2010-2012). • New York AGI over $10 million, the New York itemized deduction is limited to 25% of charitable contributions (Tax years 2010-2012). • Change in calculating itemized deductions • Beginning for tax year 1/1/2010, New York will no longer allow the federal deduction for state and local sales tax in the computation of an individual’s New York itemized deduction. • TSB-M-10(8)I Amendments Affecting New York Itemized Deductions

14. Increase in New York City Income Taxes • The total tax rate for taxable income in excess of $500,000 has increased from 3.648 percent to 3.876 percent. • Effective for tax years beginning after 2009. • TSB-M-10(7) I - New York City Resident Tax Rates

15. New Contribution Lines • Volunteer Firefighting and Volunteer Emergency Services Recruitment and Retention Fund • Line 36 on IT-150 • Line 60 on IT-201 • Line 57 on IT-203

16. Limits the Basic STAR Exemption • Beginning with school year 2011-2012, the BASIC STAR real property tax exemption is eliminated to homeowners with affiliated income in excess of $500,000. • The law eliminates the STAR tax rate reduction for New York City income taxpayers with taxable income in excess of $500,000. The base rate for these taxpayers will increase from 3.2 to 3.4 percent for tax year 2010 and after.

17. Build America Bond (BAB) Interest • Interest income from BABs will be treated the same as if the interest was from any other tax exempt obligation issued by a state or local government: • Issued by New York State or its local governments is not subject to tax • Issued by states and local governments other than New York State or its local governments, is subject to tax. • A subtraction is available for interest income attributable to a BAB issued by New York State or its local governments. • Special condition code A-6 – if BAB interest is included in your federal adjusted gross income. • TSB-M-10(4)I, Treatment of Interest Income from Build America Bonds

18. Automatic 90 Day Extension for Certain Taxpayers • If your spouse died within 30 days before your return is due, you qualify for an automatic 90-day extension to file your return. (Chapter 429 – A7162B/S5789A) • Enter code D9 if you qualify for an automatic extension of time to file because of the death of your spouse.

19. Due Date of the 2010 personal income tax return • Friday April 15th is Emancipation Day in Washington D.C. so the deadline for filing a personal income tax return has been extended.  • NYS will conform with the IRS and the personal income tax return will be due April 18, 2011

20. Historic Homeownership Rehabilitation Credit • Amendments to Historic Homeownership Rehabilitation Credit: • The definition of a qualified historic home has been revised • The credit limitation per year has been increased from $25,000 to $50,000 for most taxpayers, and • The credit is now refundable for certain taxpayers. • TSB-M-10(2)C, (3)I, The Rehabilitation of Historic Properties Credit and the Historic Homeownership Rehabilitation Credit.

21. OnLINE SERVICESwww.nystax.gov

22. Online Services (formerly Online Tax Center) In early 2011, we’ll be adding new features to our online services accounts. • enhanced account view • e-mail notifications • respond to department notices online • new Web site design (implemented mid-December) We’ll notify taxpayers and practitioners of the improvements via email, subscription service, and paper notices.

23. Online Services (formerly Online Tax Center) Account View: The new landing page will allow taxpayers to view a comprehensive customized summary of their tax account. The page will include: • List of recent messages from the Tax Department • List of any recent tax bills, including tax type, date, and balance • List of recent filings, including confirmation number and filing method (paper or e-file). Initially supporting Sales Tax and Individual Filings. This page will include the taxpayer’s contact information, which will be easy to revise.

24. Online Services (formerly Online Tax Center) E-mail Notifications: • Taxpayers can elect to receive email notifications of certain non-statutory department notices, including assessments. • This is the first time that the department is using email to communicate with taxpayers about their personal tax account. • Taxpayer will receive an email with a prompt that they have an urgent message from the Tax Department. The e-mail won’t include any confidential tax information. • Taxpayer then goes to their online account, and in a secure environment, can view an electronic version of the paper notice they would have received. • NOTE: This will be the only notice the taxpayer receives. The department won’t be sending a paper notice.

25. Online Services (formerly Online Tax Center) Respond to Department Notices: • Taxpayers will be able to respond online to selected department notices. • Whether the taxpayer received an electronic or traditional paper notice, they’ll be able to respond online. • Only the selected non-statutory notices are eligible for this service. • NOTE: The program won’t allow taxpayers to respond to notices that aren’t included in the program.

26. Online Services (formerly Online Tax Center) Respond to Department Notices: First group of notices to use this service will include: • Assessments, • sales tax and corporation tax delinquency notices, • sales tax reclassification notices and • audit notices asking the taxpayer for additional information. The additional information can be scanned and sent along with the response.

27. NYS Department of Taxation and Finance Web Site Redesign: • Our redesigned Web site will have a user-friendly look and feel with easier to find information and services • The new design results from an in-depth study of how customers use the site (interviews, data analysis, etc.) and prototype testing with real users.

28. Additional Information for coordinators

29. Refund Anticipation Loan Facilitators Registration • A facilitator  is a person who individually or in conjunction or cooperation with another person: • solicits the execution of, processes, receives, or accepts an application or agreement for a refund anticipation loan or refund anticipation check; • serves or collects upon a refund anticipation loan or refund anticipation check; or • in any other manner facilitates the making of a refund • Note: An individual who may meet one of the exclusions from being considered a tax return preparer, for registration purposes, can still be considered a facilitator and be subject to the registration requirements

30. Requirement of Tax and Finance to Create a Task Force • The Task Force will examine the need for additional oversight of tax return preparers. • The Task Force will include representatives from NYS Department of Taxation and Finance, representatives from Office of Temporary and Disability Assistance, practitioner participants, CPAs , etc • The Task Force will prepare a report making recommendations for the appropriate professional qualifications, including, but not limited to, minimum educational qualifications and continuing education requirements for tax return preparers.

31. Where to file PAPER returns – new mailing address • If enclosing a payment (check or money order), mail your return to: • STATE PROCESSING CENTER • PO BOX 15555 • ALBANY NY 12212-5555 • If not enclosing a payment, mail your return to: • STATE PROCESSING CENTER • PO BOX 61000 • ALBANY NY 12261-0001 NOTE – address to mail payment with the IT-2105 (estimated tax payment) and address for IT-201-V (payment voucher for e-filing) are listed in the instructions of the form and these payments are sent to Binghamton NY

32. Amended Income Tax ReturnsIT-201X, IT-150X, and IT-203X • Amended returns must be completed as if you were filing an original return. • Attach to the IT-150-X, IT-201-X or IT-203-X amended return any: • amended credit claim or other form that you attached to your original return (do not attach original version) • new credit form or any other form that you are filing for the first time with your amended return • copy of any tax form, credit form, IT-2 or related withholding form, or other form that you attached to your original return and are not amending

33. New York State and Local Sales TaxLine 35 on IT150 or line 59 on IT-201 • NYS Sales Tax is owed if you purchase property or a service delivered to YOU in New York State without payment of sales and use tax; such purchases through the internet, by catalog, or from television shopping channels • most tangible personal property is subject to tax • clothing • jewelry • electronic equipment • furniture • prewritten software • books (excluding text books) • compact disk • videos, etc.

34. www.nystax.gov

35. Acknowledgements • On a Fed/State filing, if the Federal tax return is rejected, the state return is not received by the IRS. • Once we receive a return, we will accept or reject the return and issue an acknowledgement. • The New York acknowledgement is generally issued 24-48 hours after the return is e-filed.

36. USING TAX WISE • MUST Enter on NYS Tax Form: • School District Name • School District Code • County of Resident • Tax Wise will automatically calculate the Household Credit • Line 59 – NYS Sales Tax must have an entry • IT214 and NYC-210 are the only forms we accept as stand alone. However, if e-filing must be accompanied by a person income tax return – IT-201, IT-203 or IT-150.

37. Tax Credits automatically calculated on New York State software when calculated on IRS return • Household Credit • IT-213 - Empire Child Tax Credit – From federal child tax credit • IT-215 – Earned income tax credit – From federal earned income tax credit • IT-216 – Child care and Dependent Credit – From federal 2441

38. IRS forms that must be included with the NYS e-file return • Schedule C Profit or Loss from Business • Schedule C-EZ Net Profit from Business • Schedule D Capital Gains and Losses • Schedule E Supplemental Income and Loss • Schedule EIC Earned Income Credit • Schedule F Profit or Loss from Farming • Form W-2 Wage and Tax Statement • Form 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans,IRAs, Insurance Contracts, etc.

39. Addition adjustment on NYS return • The 414H and amount must be entered on line 14 on the W-2. • IF NYC IRC 125 must be entered on box 14 of the W-2 • Other Addition modifications must be included on proper addition lines of the IT-201

40. Subtraction adjustments on NYS return • Must be entered on appropriate line of NYS return • Income tax refund is automatically subtracted • Social security income is automatically subtracted • Contributions to a NYS 529 College Savings Plan • Pensions - Must indicated on 1099 if the pensions is from NYS and local government of if private pension entitled to exclusion if taxpayer reaches age 59 & ½.

41. Pension subtraction on Tax Wise PRIVATE- If a taxpayer is 59 ½ or older, he or she can subtract up to $20,000 from the qualifying pension and annuity income from his or her federal adjusted gross income (1099R) To enter the amount on line 29 of the IT-201 page 2 (or line 18,page 1, on the IT-150), enter the amount in the 1099R, and put an “x” in box 1 which is located left to box 13/local taxes. PUBLIC- Pensions of New York State, local government and the federal government (form 1099R) The entire pension is excluded & entered on line 26, page 2 onIT-201(or line 16,page 1 on the IT-150). To enter the amount on line 26 of the IT-201 page 2, enter the amount in the 1099R, and put an “x” in box 2 which is located left to box 13/local taxes

42. Advisory Decisions • TSBA -09 (09)I and 09(10)I - Whether distributions from an IRA that was funded with assets rolled over from a IRC §403(b) tax-deferred annuity plan are subject to New York State personal income tax. • TSB-A-09 (07) I - Whether distributions from an Individual Retirement Account (IRA) are subject to personal income tax if the taxpayer rolls over a Federal Reserve Bank of New York 401K Thrift Plan to the IRA. • TSB-A-10(02)I - Whether marriage to a same-sex partner will be recognized for New York State personal income tax purposes. • TSB-A-10(06)I - Whether a distribution from an IRA established by means of a tax-free rollover from the State University of New York Optional Retirement Program may be federal adjusted gross income when computing New York adjusted gross income. • TSB-A-10(08)I - Whether in-service distributions received from the Federal Employees' Retirement System qualify for the income subtraction modification under Tax Law §612(c)(3)(ii).

43. E-file Signature Requirements • There is no need to mail Forms W-2 or other supporting documents to the Tax Department. • Volunteers are required to have the taxpayer sign the TR-579-IT for each return that is e-filed. The TR-579-IT should be retained by the volunteer with the IRS (federal) signature document. • Volunteers should: • enter their SITE ID number where requesting Federal ID number or SS number • and Name of Site where requesting name of practitioner. • Ignore the line “Preparer’s NYTPRIN”. This is for paid preparers that are required to register.

44. If using the Taxwise Software and a paper return must be filed what you need to know • The NYS forms IT-2, IT-1099-R and IT-1099-UI are for paper filing only; if software is used to prepare the return and the return is NOT E-filed, print IT-2 for all W-2’s. • Print IT-1099R if there is NYS withholding tax on the pensions. • Print IT-1099 UI if withholding on unemployment insurance

45. Payment Options on E-filing • Electronic Funds Transfer (EFT) from a checking or savings account. • EFT allows a taxpayer to defer payment until the return due date, regardless of the filing date of the return. • We will not debit the account for more than the amount authorized by the taxpayer. • We will reject returns if we determine that the account information is incorrect. • Credit Card • Mail in a check with Form IT-201-V

46. Direct Deposit for Tax Refunds • e-file with Direct Deposit is the fastest way to get a refund. • If a computational error results in a balance due on the return, we won’t use the account information provided for a direct deposit to debit the taxpayers account. • We will reject returns if we determine that the account information is incorrect. • NYS will not support split refunds

47. Extensions • Form IT-370,will extend the due date for 6 months • You may e-file extensions using your e-file software or directly on our website. • You can file Form IT-370 on-line on @ www.nystax.gov. Payment options for our on-line extension include ACH debit, credit card and checks. • No signature requirement if no tax due.

48. Estimated taxes • You are not required to fill estimated taxes if you expect to owe less than $300 of New York State, city of New York, or city of Yonkers income tax after deducting tax withheld and credits that you are entitled to claim. • Payment - April 15, June 15, Sept 15 and Jan 15 • NYS does not provide statement of accounts and does not provide vouchers (IT-2105V). • The easiest and fastest way for individuals to make estimated tax payments is through our Online tax Center. Individuals can also view and reconcile their estimated tax payments electronically.

49. NOTE: Free e-filing available by visiting • http://www.tax.state.ny.us/elf/free_efile_info.htm • Qualifications for free e-filing vary by software providers. Generally, if a taxpayer qualifies for EITC, or under the age of 25, or over 65, or active military or Federal adjusted gross income under $57,000. Software providers include: • TaxSlayer.com • Freedomtax.com • I-CAN!

50. Online Services • Create an online service account to: • Pay estimated income and manage your estimated tax account • View and pay tax bills (all tax types) • Use Metropolitan Commuter Transportation Mobility Tax (MCTMT) Web File • Use tax preparer registration and certificate reprint (register for tax year 2011 starting in mid-November) • Report change of address