This article was recently published in the New York State Society of CPAs TaxStringer Newsletter.

Since New York has decoupled from certain personal federal income tax changes for 2018 and after, the state and federal tax treatment of those items will differ. In particular, individuals may claim some deductions on their New York returns that are no longer available for federal purposes, including state and local real estate taxes over the $10,000 federal limit and certain miscellaneous deductions that are no longer allowed federally, such as tax preparation fees and investment expenses.

Initially, the New York Department of Taxation and Finance took the position that the decoupling did not extend beyond individuals to non-grantor trusts and estates. That position has now been reversed in light of the 2020 New York Executive Budget, which was enacted into law on April 12, 2019, and does extend the decoupling benefit to trusts and estates.

These modifications apply to taxable years beginning in 2018.

For returns that have not yet been filed, these may be valuable deductions to take. Many returns will already have been filed. If so, advisors should consider filing amended returns.

 Please see important disclosures at the end of the article.

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