N.Y. Comp. Codes R. & Regs. tit. 20 § 201.1

Current through Register Vol. 46, No. 45, November 2, 2024

Section 201.1 - Verification of income information and determination of total annual income

Tax Law, § 171-b

(a)Definitions.

For the purpose of this Part, the following mean:

(1)

(i) For purposes of verification of income information (see subdivision [b] of this section), a complete match means that both the name and the corresponding social security account number of a tenant that the commissioner of housing, a supervising agency, the housing trust fund corporation, or a company forwards to the department, match both the name and the corresponding social security account number on the department's computer records of individuals who filed a personal income tax return under article 22 of the Tax Law for the taxable year inquired about and the applicable return has completed processing.

(ii) For purposes of determination of total annual income (see subdivision [c] of this section):

(a) a complete match means that both the name(s) and the corresponding address of as many persons who reside in a housing accommodation subject to rent regulation, that the commissioner of housing forwards to the department, as are needed to determine if the total annual income of such persons exceeds $175,000 per annum in each of the two preceding calendar years, match both the name(s) and the corresponding address on the department's computer records of individuals who filed a personal income tax return under article 22 of the Tax Law for each of the taxable years inquired about and the applicable returns have completed processing; and

(b) a one-year match means that for one of the years inquired about, but not both, the name(s) and the corresponding address of as many persons who reside in such housing accommodation as are needed to determine if the total annual income of such persons exceeds $175,000 in such year, match both the name(s) and the corresponding address on the department's computer records of individuals who filed a personal income tax return under article 22 of the Tax Law for the taxable year and the applicable returns have completed processing.

(2) The department means the Department of Taxation and Finance.

(3) The commissioner means the Commissioner of Taxation and Finance.

(4) The requester means the Division of Housing and Community Renewal, a supervising agency, the housing trust fund corporation, or a company.

(5) The commissioner of housing means the Commissioner of the Division of Housing and Community Renewal.

(6) A supervising agency means a supervising agency as such term is defined in subdivision 15 of section 2 of the Private Housing Finance Law.

(7) The housing trust fund corporation means the public benefit corporation established pursuant to the authority of section 45-a of the Private Housing Finance Law.

(8) A company means a company as such term is defined in subdivision 2 of section 12 of the Private Housing Finance Law.

(9)Income information is the information that the commissioner of housing requires of a tenant in order to make a determination of eligibility for admission or continued occupancy, pursuant to Subpart 1727-2 of Part 1700 of Title 9 NYCRR.

(10)Material representations contained in such income information are the select items of income information that the department will verify and they consist of:

(i) the name;

(ii) the social security account number;

(iii) total income;

(iv) the number of exemptions;

(v) whether the tenant elected the New York standard deduction or elected to itemize deductions; and

(vi) the amount, if any, of the tenant's medical deduction if the tenant elected to itemize deductions.

(11)Tenant means the individual from whom, or about whom, the commissioner of housing, a supervising agency, the housing trust fund corporation, or a company requires verification of income information or determination of total annual income.

(12)Personal income tax return means the New York State personal income tax return, if any, filed for the taxable year regarding which the commissioner of housing, a supervising agency, the housing trust fund corporation, or a company seeks income verification.

(13)Annual income shall mean the Federal adjusted gross income as reported on the New York State personal income tax return for a taxable year.

(14)Total annual income means, for each taxable year inquired about, the sum of the annual incomes of all persons whose names are recited as the tenant or co-tenant on a lease who occupy the housing accommodation and all other persons that occupy the housing accommodation as their primary residence on other than a temporary basis, excluding bona fide employees of such occupants residing therein in connection with such employment and excluding bona fide subtenants in occupancy pursuant to the provisions of section 226-b of the Real Property Law. In the case where a housing accommodation is sublet, the annual income of the tenant or co-tenant recited on the lease who will reoccupy the housing accommodation upon the expiration of the sublease shall be considered.

(b)Verification of income information.

(1) Verification of income information by the department shall be limited to the material representations.

(2) The department shall determine if a complete match is possible (see subparagraph [a][1][i] of this section). If a complete match is not possible, the department shall reply either "NOT FOUND" (meaning that no social security account number match was found) or "UNMATCHED" (meaning that a social security account number match was found, but that a name code match was not). If a complete match is possible, the department shall verify the material representations as follows:

(i) If the total income figure forwarded is materially less than the total income as reported by the tenant on such tenant's personal income tax return, then the department will reply with respect to income "LOW". In all other cases, the department will reply, consistent with the terms of reporting mutually agreed to with the requester, "HIGH".

(ii) If the number of exemptions forwarded is more than the number of exemptions reported by the tenant on such tenant's personal income tax return, then the department will reply with respect to exemptions "HIGH". In all other cases where the department is furnishing information under subparagraph (i) of this paragraph, then the department will reply with regard to exemptions "LOW".

(iii) If the tenant elected the New York standard deduction, the department will reply "STD". If the tenant elected to itemize deductions on his or her personal income tax return, then the department will reply "ITM".

(iv) If the amount of the medical deduction forwarded is more than the medical deduction reported by the tenant on such tenant's personal income tax return, then the department will reply with respect to the medical deduction "HIGH". In all other cases, where the department is furnishing information under subparagraph (i) of this paragraph, then the department will reply with respect to medical deductions "LOW".

(3) The department will verify the material representations listed in subparagraphs (a)(10)(i) through (v) of this section annually as the computer records of New York State personal income tax taxpayers become available for the taxable year inquired about, and may verify them from time to time, by automated or manual processes, whenever the department determines that adequate resources are available. The department may verify the material representation listed in subparagraph (a)(10)(vi) of this section from time to time after the information becomes available for the taxable year inquired about, by automated or manual processes, if the department determines that adequate resources are available.

(4) The department shall from time to time advise the requester of the characteristics and specifications of magnetic media on which the material representations must be received in order to be verified and of the characteristics, specifications and mode of the information to be forwarded to the requester. Requesters must comply with instructions and requirements of the department with respect to filing income verification requests on magnetic media. The department shall charge a reasonable fee to the requester in payment for the expense incurred in verifying income information.

(5) Nothing in this Part shall be construed to require the department to record in computerized form any material representations not presently recorded in such form.

(c)Determination of total annual income.

(1)

(i) The department shall determine if a complete match or a one-year match is possible (see subparagraph [a][1][ii] of this section).

(a) If a complete match is possible, the department shall determine if the total annual income of persons residing in any housing accommodation subject to rent regulation exceeds $175,000 per annum in each of the two preceding calendar years and, depending on its findings, shall notify the commissioner of housing that:

(1) such total annual income is determined to exceed $175,000 per annum in each of the two preceding calendar years,

(2) such total annual income is determined to exceed $175,000 in one year but not both, in which case the notification to the commissioner of housing shall indicate for which year the threshold was exceeded or

(3) such total annual income is not determined to exceed $175,000 in either of the two years.

(b) If a complete match is not possible but a one-year match is possible, the department shall determine if the total annual income of persons residing in the housing accommodation for the year matched exceeds $175,000, and shall notify the commissioner of housing of the result and for which year such result was determined, and of not finding a match in the other year.

(c) No other information regarding the annual income of such persons, whether a complete match or a one-year match is possible, shall be provided.

(d) In every other case not provided for by clauses (a) and (b) of this subparagraph, the department shall reply "UNMATCHED".

(e) As used in this subdivision and subparagraph (a)(1)(ii) of this section, in the case of a person whose taxable year is other than a calendar year, the term "calendar year" shall be deemed to refer to "taxable year".

(ii) In replying to the commissioner of housing under subparagraph (i) of this paragraph, the department shall indicate, in any case, whether such reply is based on all, or less than all, of the required matches for each calendar year inquired about. Where the reply is based on less than all of such required matches, the department shall indicate, for each calendar year, the names of those persons whose returns were not found. In so indicating those names, nothing is to be implied about those individuals as to whether or not they are in compliance with, or in violation of, any civil or criminal provisions of the Tax Law.

(2) The department will determine the total annual income referred to in paragraph (1) of this subdivision annually as the computer records of New York State personal income tax taxpayers become available for the calendar years inquired about, and may determine such total annual income from time to time, by automated or manual processes.

(3) The department shall from time to time advise the Division of Housing and Community Renewal of the characteristics and specifications of magnetic media on which the required information relating to the determination of total annual income must be received in order to be determined and of the characteristics, specifications and mode of the information relating to the determination of such total annual income to be forwarded to the commissioner of housing. The Division of Housing and Community Renewal must comply with the instructions and requirements of the department with respect to filing total annual income determination requests on magnetic media.

(4) Nothing contained in this subdivision shall be deemed to require the violation of any confidentiality agreement entered into by New York State or any entity thereof under section 6103, or any other provision, of the Internal Revenue Code, nor shall this subdivision be administered in any manner which will result in a violation of any such confidentiality agreement.

N.Y. Comp. Codes R. & Regs. Tit. 20 § 201.1