(a) General. If an individual changes his or her status during his or her taxable year from city resident to city nonresident, or from city nonresident to city resident, such individual shall file one return as a resident for the portion of the year during which he or she is a city resident, and a return under chapter nineteen of this title, for the portion of the year during which he or she is a city nonresident, subject to such exceptions as the tax commission may prescribe by regulation.
(b) City taxable income as city resident. The city taxable income for the portion of the year during which he or she is a city resident shall be determined, except as provided in subdivision (c), as if his or her taxable year for federal income tax purposes were limited to the period of his or her city resident status.
(c) Special accruals.
(1) If an individual changes his or her status from city resident to city nonresident, he or she shall, regardless of his or her method of accounting, accrue to the period of residence any items of income, gain, loss or deduction accruing prior to the change of status, if not otherwise properly includible (whether or not because of an election to report on an installment basis) or allowable for city income tax purposes for the portion of the taxable year prior to the change of status or for a prior taxable year. The amounts of such accrued items shall be determined with the applicable modifications described in sections 11-1712 and 11-1715 as if such accrued items were includible or allowable for federal income tax purposes.
(2) If an individual changes his or her status from city nonresident to city resident, he or she shall, regardless of his or her method of accounting, accrue to the period of nonresidence any items of income, gain, loss or deduction accruing prior to the change of status, other than items derived from or connected with New York state sources, if not otherwise properly includible (whether or not because of an election to report on an installment basis) or allowable for federal income tax purposes for the portion of the taxable year prior to the change of status or for a prior taxable year. The amounts of such accrued items shall be determined with the applicable modifications described in sections 11-1712 and 11-1715 as if such accrued items were includible or allowable for federal income tax purposes.
(3) No item of income, gain, loss or deduction which is accrued under this subdivision shall be taken into account in determining city adjusted gross income or the city itemized deduction for any subsequent taxable period.
(4) The accruals under this subdivision shall not be required if the individual files with the tax commission a bond or other security acceptable to the tax commission, conditioned upon the inclusion of amounts accruable under this subdivision in city adjusted gross income for one or more subsequent taxable years as if the individual had not changed his or her resident status.
(5) The foregoing provisions of this section shall apply if an individual changes his status from a city resident to city nonresident or from a city nonresident to a city resident during a taxable year, or at the beginning of a taxable year, as a result of a change of domicile or as a result of becoming a city resident or city nonresident based on the definition contained in subparagraph (B) of paragraph one of subdivision (b) of section 11-1705 of this chapter.
(6) Except as hereinafter provided, where an individual who is a member of a partnership or shareholder of an S corporation changes status from city resident to city nonresident, or from city nonresident to city resident, the portion of the distributive or pro rata share of income, gain and loss (less deductions attributable thereto) from a partnership or S corporation shall be allocated to the resident and nonresident periods of the partner or shareholder on a proportionate basis throughout the taxable year of the partnership or S corporation. In such event, the portion of the distributive or pro rata share allocated to the period of residency shall be determined based on the number of days of residency within the reporting period of the partnership or S corporation over the total number of days in the reporting period of the partnership or S corporation. Provided, however, that the commissioner may require, or the individual may elect, to accrue to the period of residence, and the period of nonresidence, the portion of the distributive or pro rata share of partnership or S corporation income, gain and loss (less deductions attributable thereto) accruing during the individual's respective resident and nonresident periods in a manner that reflects the date of accrual of said income, gain and loss by the partnership or S corporation.
(7) Except as hereinafter provided, where an individual who is a beneficiary of an estate or trust changes status from city resident to city nonresident, or from city nonresident to city resident, the portion of any estate or trust income credited, distributable, payable or required to be distributed to such beneficiary shall be allocated to the resident and nonresident periods of the beneficiary on a proportionate basis throughout the taxable year of the estate or trust. In such event, the portion of such estate or trust income allocated to the period of residency shall be determined based on the number of days of residency within the reporting period of the estate or trust. Provided, however, that the commissioner may require, or the beneficiary may elect, to accrue to the period of residence, and the period of nonresidence, the portion of such estate or trust income accruing during the beneficiary's respective resident and nonresident periods in a manner that reflects the date of accrual of said estate or trust income by the estate or trust.
(d) City minimum tax. Where two returns are required under this section, the total of the taxes due thereon shall not be less than would be due if the city taxable incomes reportable on the two returns were included in one return.
(e) Proration. Where a return is required under this section, the city personal exemptions allowable under section 11-1716 shall be prorated, under regulations of the tax commission, to reflect the portions of the entire taxable year during which the individual was a resident.
(f) Standard deduction. Where a return is required under this section, the city standard deduction allowable on such return shall be the amount allowed pursuant to the provisions of section 11-1714, prorated according to the period covered by the return.
(g) Trusts. If the status of a trust changes during its taxable year from city resident to city nonresident, or from city nonresident to city resident, the fiduciary shall file one return as a city resident trust for the portion of the year during which the trust is a city resident trust, and one return under chapter nineteen of this title for the portion of the year during which the trust is a city nonresident trust, subject to such exceptions as the tax commission may prescribe by regulations. The provisions of subdivisions (b), (c), (d) and (e) of this section shall apply for the purposes of this subdivision, except to the extent that any of such provisions may be inconsistent with the provisions of section 11-1718, and except that the term "individual" shall be read as "trust", the term "city adjusted gross income" shall be read as "city taxable income", reference to "gain" shall include any modification for includible gain under subdivision five of section 11-1718, and the phrase "personal exemptions allowable under section 11-1716" shall be read as "city exemptions allowable under section 11-1718."
(h) Lump sum distributions. If the status of a taxpayer changes from city resident to city nonresident, or from city nonresident to city resident, the taxpayer shall, regardless of his or her method of accounting, accrue the total taxable amount of a lump sum distribution accruing prior to the change of status, if the ordinary income portion thereof is not otherwise subject to tax under section 11-1703 for the portion of the taxable year prior to the change in status or for a prior taxable year. No ordinary income portion of a lump sum distribution the total taxable amount of which is accrued under this subdivision shall be subject to tax under section 11-1703 for any subsequent taxable period. The accrual under this subdivision shall not be required if the taxpayer files with the tax commission a bond or other security acceptable to the tax commission, conditioned upon the payment of tax under section 11-1703, with respect to such amount accruable under this subdivision, for a subsequent taxable year as if the taxpayer had not changed its resident status.
(i) Deduction for two-earner married couples. Where a return is required under this section, the amount of deduction under paragraph twenty-nine of subdivision (c) of section 11-1712 shall be equal to ten percent of the lesser of:
(1) thirty thousand dollars, pro rated according to the period covered by the return or
(2) the qualified earned income of the spouse with the lower qualified earned income for the period covered by the return.