Taxpayer Services Division Technical Services Bureau: Standard Deduction

New York State Department of Taxation and Finance
Taxpayer Services Division TSB-M-87 (11) I

Income Tax
Technical Services Bureau September 25, 1987
New York State's Tax Reform and Reduction Act of 1987

Standard Deduction, Itemized Deduction and Personal Exemption
The New York State Tax Reform and Reduction Act of 1987 (Chapter 28), as amended by
the Tax Reform Technical Corrections and New York City Tax Reduction Act of 1987 (Chapter
333), adds new provisions to the Tax Law relating to the standard deduction, itemized deduction and
personal exemption. The following is an explanation of the amendments.
Standard Deduction
Section 614 has been amended and Section 699 (transition provisions) has been added to
provide for an increase in the amount of standard deduction allowable and a separate standard
deduction amount for each of the five different filing statuses. The increase in the standard deduction
is phased in over a five-year period beginning with tax year 1987.
The new standard deduction schedule is as follows:
1991
1987 1988 1989 1990 and after
Married filing jointly

and surviving spouse $5,300 $8,500 $9,500 $11,250 $13,000
Head of a household $4,600 $6,000 $7,000 $8,750 $10,500
Single $3,600 $5,000 $6,000 $6,750 $7,500
Married filing separately $2,650 $4,250 $4,750 $5,625 $6,500
Dependent filers $2,800 $2,800 $2,800 $2,900 $3,000
Itemized Deduction
For tax year 1987, the full amount of New York itemized deduction is allowable. For tax
years beginning after 1987, itemized deductions are retained; however, for higher income
individuals, a varying percentage of their total itemized deductions are disallowed depending on the
taxpayer's adjusted gross income range and filing status.
RODERICK G. W. CHU, COMMISSIONER GABRIEL B. DiCERBO, DEPUTY COMMISSIONER

FRANK J. PUCCIA, DIRECTOR
TP-8 (3/83)
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TSB-M-87 (11) I
Income Tax
September 25, 1987
The following two tables contain the percentage of itemized deductions disallowed for tax
year 1988.
Table I - Percentage of itemized deductions disallowed where New York adjusted gross income
does not exceed $ 475,000
Filing status Up to 10%* 10%

and surviving spouse $200,000 - 250,000 $250,000 - 475,000
Head of a household 150,000 - 200,000 200,000 - 475,000
Single and married

filing separately 100,000 - 150,000 150,000 - 475,000
*The following formulas are used to determine the amount of itemized deductions disallowed within
these income ranges:
• Married filing jointly and surviving spouse

NY itemized x 10 percent x lesser of $50,000 or (NY AGI - $200,000)
$50,000
• Head of a household
$50,000
• Single and married filing separately

$50,000
Example 1. Single taxpayer - tax year 1988

New York adjusted gross income - $145,000
Total itemized deductions - $30,000
Itemized deductions disallowed:
lesser of $50,000 or ($145,000 - $100,000)

$30,000 x 10% x $50,000
lesser of $50,000 or ($45,000)

$30,000 x 10% x $50,000
$45,000
($30,000 x 10%) x $50,000
$3,000 x 90% = $2,700 itemized deductions disallowed
Itemized deductions allowed:
$30,000 total itemized deductions

- 2,700 itemized deductions disallowed
$27,300 itemized deductions allowed
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TSB-M-87 (11) I
Income Tax
September 25, 1987
Example 2. Married filing Jointly - tax year 1988

Itemized deductions disallowed: $40,000 x 10% = $4,000

$36,000 itemized deductions allowed
For tax years 1989 and after, the same income limits and formulas apply. However, the percentage
of disallowance is increased from 10% to 25%.
Table II - Percentage of itemized deductions disallowed where New York adjusted gross
income exceeds $475,000
Filing status 10 to 20%* 20%

and surviving spouse $475,000 - 525,000 over $525,000
Head of a household 475,000 - 525,000 over 525,000
Single and married

filing separately 475,000 - 525,000 over 525,000
*The following formula is used regardless of the filing status of the taxpayer:
NY itemized x 10 percent + [ NY itemized x 10 percent x

lesser of 50,000 or (NY AGI - $475,000) ]
$50,000
Example 1. Single taxpayer - tax year 1988

Itemized deductions disallowed:
($100,000 x 10%) +
[$100,000 x l0% x lesser of $50,000 or <$480,000 - $475,000)]

$50,000
10,000 + [ $100,000 x 10% x lesser of $50,000 or $5,000 ]

$50,000
$10,000 +[ $10,000 x 10% x $5,000 ]

$50,000
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TSB-M-87 (11) I
Income Tax
September 25, 1987
$10,000 + $100,000 x 10% x 10%

$10,000 + $100,000 x 1%
$10,000 + $1,000
$11,000 itemized deductions disallowed

$ 89,000 itemized deductions allowed
Example 2. Married filing Jointly - tax year 1988

Itemized deductions disallowed: $100,000 x 20% = $20,000

$ 80,000 itemized deductions allowed
For tax years 1989 and after, the same income limits and formulas apply. However, the
percentages of disallowance are increased from 10% to 25% and 20% to 50%.
Section 615(b) of the Tax Law has also been amended to provide that a husband and wife
who file a joint federal return, but who are required to file separate New York returns, must claim
only the itemized deduction that applies to his or her own income, computed as if their federal
taxable incomes had been determined separately.
Personal Exemption
For tax year 1987, a taxpayer will be entitled to $900 for each exemption (taxpayer, spouse
and dependents). Elderly or blind taxpayers are no longer entitled to an additional personal
exemption.
A dependent filer (one who can be claimed as a dependent on another taxpayer's return, such
as a working student) cannot be claimed as a personal exemption on his or her own return.
For tax years beginning in 1988 and thereafter, a $1,000 exemption will be allowed only for
each dependent of the taxpayer. The personal exemption will no longer be allowed for the taxpayer
and spouse.
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TSB-M-87 (11) I
Income Tax
September 25, 1987
Nonresidents and Part-Year Residents

For tax year 1987, the amount of the standard deduction, itemized deduction and personal
exemptions for nonresidents and part-year residents will be the same as the amounts allowed to
residents. However, such amounts will be subject to the limitation percentage, where applicable.
For tax years beginning after 1987, nonresidents and part-year residents will determine their
New York State income tax under a new method. They will compute a base tax as if they were
residents for the entire year and then prorate the tax based on the ratio of New York source income
to all income. Under this method, nonresidents and part-year residents will be allowed the same
standard deduction, itemized deduction and exemptions allowed to residents. The limitation
percentage will no longer apply. For a detailed explanation of these new provisions, see TSB-M-87-
(13)I.
City of New York and City of Yonkers

The Administrative Code of the City of New York (Chapter 17 of Title 11) has been amended
to conform with the above changes to Article 22 of the Tax Law.
These amendments to the New York State Tax Law are also applicable to the City of Yonkers
resident income tax surcharge authorized by Article 30-A of the Tax Law.

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New York State Department of Taxation and Finance

Taxpayer Services Division TSB-M-87 (11) I

New York State's Tax Reform and Reduction Act of 1987

The new standard deduction schedule is as follows:

Married filing jointly

Head of a household $4,600 $6,000 $7,000 $8,750 $10,500

Single $3,600 $5,000 $6,000 $6,750 $7,500

Married filing separately $2,650 $4,250 $4,750 $5,625 $6,500

Dependent filers $2,800 $2,800 $2,800 $2,900 $3,000

RODERICK G. W. CHU, COMMISSIONER GABRIEL B. DiCERBO, DEPUTY COMMISSIONER

Filing status Up to 10%* 10%

Head of a household 150,000 - 200,000 200,000 - 475,000

Single and married

• Married filing jointly and surviving spouse

• Single and married filing separately

Example 1. Single taxpayer - tax year 1988

lesser of $50,000 or ($145,000 - $100,000)

lesser of $50,000 or ($45,000)

$3,000 x 90% = $2,700 itemized deductions disallowed

Itemized deductions allowed:

$30,000 total itemized deductions

Example 2. Married filing Jointly - tax year 1988

Itemized deductions allowed:

$40,000 total itemized deductions

Married filing jointly

Head of a household 475,000 - 525,000 over 525,000

Single and married

NY itemized x 10 percent + [ NY itemized x 10 percent x

Example 1. Single taxpayer - tax year 1988

[$100,000 x l0% x lesser of $50,000 or <$480,000 - $475,000)]

10,000 + [ $100,000 x 10% x lesser of $50,000 or $5,000 ]

$10,000 +[ $10,000 x 10% x $5,000 ]

$10,000 + $100,000 x 10% x 10%

Itemized deductions allowed:

$100,000 total itemized deductions

Example 2. Married filing Jointly - tax year 1988

Itemized deductions allowed:

$100,000 total itemized deductions

Nonresidents and Part-Year Residents

City of New York and City of Yonkers

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