Instructions For Form It-203-Gr - Group Return For Nonresident Partners

Page 2 of 4 IT-203-GR-

(2004)

Example: A husband participates in a group return for

Qualified nonresident partner

Partnerships A and B and has Yonkers income from both

A qualified nonresident partner is a partner who meets all of the

partnerships. The partner’s wife participates in a group return for

following conditions:

Partnership C and has Yonkers income from Partnership C. The

— The partner must be a nonresident of New York State for the

husband is participating in two group returns for purposes of the

entire tax year.

10-group return limitation, and must also waive the allowable

exclusion for purposes of the Yonkers nonresident earnings tax on

— The partner did not maintain a permanent place of abode in

the group returns of both Partnerships A and B because he has

New York State at any time during the tax year.

Yonkers income from more than one source. The wife is

— Neither the partner nor the partner’s spouse has income derived

participating in one group return for purposes of the 10-group

from New York sources other than (1) the partner’s distributive

return limitation and may claim the allowable exclusion for

share of partnership income with New York additions and

purposes of the Yonkers nonresident earnings tax since she has

subtractions allocated to New York, or (2) other income derived

Yonkers income from only one source.

from certain New York sources described below.

Electing to participate in the group return

— Neither the partner nor the partner’s spouse is subject to the

New York State minimum income tax or the New York State

A qualified nonresident partner elects to participate in the group

separate tax on the ordinary income portion of a lump-sum

return by informing the group agent that he or she wishes to

distribution.

participate. The election must be made by the fifteenth day of the

fourth month following the close of the tax year for which the

— The partner must waive the right to claim the New York standard

election is being made. The partner’s inclusion in the group return

deduction or itemized deduction, the New York dependent

constitutes notice to the Tax Department that the partner is electing

exemption, any New York State personal income tax credits (see

to participate in the group return.

Special rule for credits below), and any carryback or carryover

of a New York State net operating loss or capital loss.

A partner who elects to be included in the group return may not

change that election after the fifteenth day of the fourth month after

Special rule for credits:

The partner must waive the right to

the close of the tax year. However, if it is later determined that a

claim any New York State personal income tax credits that originate

partner included in the group return did not meet the definition of a

in a year for which the partner elects to file on a group return. The

qualified nonresident partner for the tax year, the partner would be

partner must also waive the right to claim any carryover to a

required to file an amended return on an individual basis.

subsequent tax year(s) of a credit(s) that originated in a year for

which the partner elected to file on a group return, whether the

A partnership filing a group return must attach to its Form IT-204,

partner files on a group return or files an individual personal

Partnership Return , a list showing the name (in either alphabetical or

income tax return for the subsequent tax year(s). Additionally, the

social security number order) and social security number of each

partner must waive the right to claim any carryover of a credit(s) on

partner who will be included on the group return.

the group return that originated in a year for which the partner filed

Yonkers nonresident earnings tax

an individual personal income tax return.

If a partnership files a group New York State return and the

However, if a credit originated in a year for which the partner filed

partnership has income derived from Yonkers sources, the

an individual personal income tax return, the partner may claim a

partnership must also file a group Yonkers nonresident earnings

carryover of the credit (if applicable), in any subsequent tax year for

tax return. The group Yonkers return must include all qualified

which the partner files an individual personal income tax return

nonresident partners who participate in the group state return. If a

even if the partner filed on a group return for any year or years after

partner does not participate in the group state return, the partner

the credit was initially claimed. In this instance, a partner must

may not participate in the group Yonkers return.

consider any year or years for which the partner filed on a group

return for purposes of determining the allowable carryover period

However, a partnership may file a group Yonkers return even if the

for those credits with limited carryover periods.

partnership is not filing a group New York State return. To be

eligible to file a separate group Yonkers return, the partnership

If both a husband and wife are partners in the same partnership,

must have 11 or more qualified nonresident partners for Yonkers

both spouses may be included in the group return if they both meet

purposes who elect to participate in the Yonkers group return.

the qualifications described above and both spouses elect to

A qualified nonresident partner for Yonkers purposes is a partner

participate. Unless both spouses elect to participate, neither may

who meets all of the following conditions:

participate in the group return.

— The partner must be a nonresident of New York State for the

If a partner or partner’s spouse has other New York source income

entire tax year.

only from another partnership, New York S corporation,

— The partner did not maintain a permanent place of abode in

professional athletic team, or other group or organization that files

New York State at any time during the tax year.

a group return and (1) the partner or partner’s spouse participates

— The partner has no income derived from Yonkers sources other

in the other group return(s); and (2) the partner or partner’s spouse

than the partner’s share of the partnership’s net earnings from

does not participate in more than 10 group returns for the tax year,

self employment allocated to Yonkers. (A partner cannot be

the partner must be included on the partnership’s group return. The

included on more than one group Yonkers return unless the

partner must also waive the right to claim the allowable exclusion

partnership is also filing a group New York State return.)

for purposes of the Yonkers nonresident earnings tax if the partner

A partnership that elects to file only a Yonkers group nonresident

has Yonkers income from more than one source. The partner must

return must make application to the Tax Department, appoint a

also notify each group agent that the partner is included on another

group agent, and submit any required powers of attorney in the

group return.

same manner that applies for New York State purposes.

Note: In the case of a partner and a partner’s spouse who are both

If the separate Yonkers election is made, each of the participating

participating in group returns, the 10-group return limitation, and

nonresident partners will file an individual New York State

the waiving of the allowable exclusion for purposes of the Yonkers

nonresident income tax return and omit the Yonkers entries on the

nonresident earnings tax, is determined individually (that is, the

return. The partner must attach a statement to the return that the

partner may participate in up to 10 group returns and the partner’s

Yonkers nonresident earnings tax is being reported separately on a

spouse may participate in up to 10 group returns).

group return filed by the partnership. The statement must also

contain the special New York identification number assigned to the

partnership.

Instructions For Form It-203-Gr - Group Return For Nonresident Partners - 2004 Page 2

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