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New York State tax implications of federal COVID relief for tax years beginning before January 1, 2022

The federal Coronavirus Aid, Relief and Economic Security Act (CARES Act), Consolidated Appropriations Act, 2021, and American Rescue Plan Act of 2021 contained a number of tax provisions that impact the computation of taxable income for individuals and businesses, modify eligibility for certain tax credits, and provide assistance to taxpayers and businesses affected by COVID-19.

New York State follows the federal tax treatment resulting from some of these federal provisions and they will automatically be reflected in the New York State personal income and corporation tax computations. However, others require state-specific adjustments on New York State personal income and corporation tax returns.

Below are questions and answers regarding New York State’s treatment of some of the most high-profile items. These and other provisions that require state adjustments are explicitly addressed in tax form instructions, such as Form IT-558-I, New York State Adjustments due to Decoupling from the IRC, and Form CT-225-I, New York State Modifications, (or Form CT-225-A for filers of combined franchise tax returns). See Previous year tax forms (by tax year) to view the 2020 and 2021 forms and instructions. 

Generally, if a federal provision is not specifically addressed in the New York State form instructions, it means no separate adjustments are necessary at the state level.

Note: For tax years beginning on or after January 1, 2022, any changes to the Internal Revenue Code after March 1, 2020, will apply to the New York State and New York City personal income tax, unless a specific modification is otherwise required under the Tax Law.

Frequently Asked Questions