171-d. Certain overpayments credited against defaulted governmental education loans. (1) The commissioner, on behalf of the tax commission, shall enter into a written agreement with the president of the New York state higher education services corporation, on behalf of such corporation, which shall set forth the procedures for crediting any overpayment by an individual, estate or trust of income tax imposed by article twenty-two of this chapter, city personal income tax on residents imposed pursuant to the authority of article thirty of this chapter, city income tax surcharge on residents imposed pursuant to the authority of article thirty-A of this chapter, city earnings tax on nonresidents imposed pursuant to the authority of former article two-E of the general city law and city earnings tax on nonresidents imposed pursuant to the authority of article thirty-B of this chapter and the interest on such overpayments against the amount of any default in repayment of any governmental education loan owed by such individual, estate or trust of which the commissioner has been notified by the president of the New York state higher education services corporation pursuant to the provisions of such agreement. For purposes of this section, "governmental education loan" shall mean any education loan debt, including judgments, owed to the federal or New York state government that is being collected by the New York state higher education services corporation.
(2) Such agreement shall apply only to the amount of a default in repayment of any governmental education loan debt, including judgments, being collected by the New York state higher education services corporation. Such agreement shall require the New York state higher education services corporation to satisfy the requirements of subdivision three of section one hundred seventy-one-f of this article.
(3) Such agreement shall include:
(a) the procedure under which the New York state higher education services corporation shall notify the commissioner of a default in repayment of a governmental education loan, such procedure to specify when the commissioner shall be notified and the content of such notification;
(b) the minimum amount outstanding on a default in repayment of a governmental education loan against which the commissioner shall, pursuant to this section, credit an overpayment;
(c) the procedure for reimbursement of the commissioner by the New York state higher education services corporation for the full cost of carrying out the procedures authorized by this section;
(d) such other matters as the parties to such agreement shall deem necessary to carry out the provisions of this section; and
(e) the procedure for reimbursement of the comptroller by the New York state higher education services corporation for overpayment and interest thereon which has been credited against the amount of default in repayment of a governmental education loan owed by a taxpayer filing a joint return, but which has been refunded by the comptroller, pursuant to paragraph six of subsection (b) of section six hundred fifty-one of this chapter, to a spouse not liable for the amount of default in repayment of a governmental education loan owed by such taxpayer.
(4) (i) In calculating the amount of an overpayment and interest thereon which shall be credited against the amount of a default in repayment of a governmental education loan owed by a taxpayer, the commissioner shall first credit the overpayment and interest thereon against any:
(A) liability of such taxpayer in respect of any tax imposed by this chapter;
(B) liability of such taxpayer for any tax imposed pursuant to the authority of this chapter or any other law if such tax is administered by the tax commission;
(C) estimated tax for the succeeding taxable year if such taxpayer claims such overpayment or a portion thereof as a credit against estimated tax for such succeeding taxable year pursuant to subsection (e) of section six hundred eighty-six of this chapter or subdivision (e) of section 11-1786 of the administrative code of the city of New York for any tax imposed pursuant to the authority of this chapter or any other law if such tax is administered by the tax commission; and
(D) past-due support owed by the taxpayer pursuant to section one hundred seventy-one-c of this article.
(E) the amount of a default in repayment of a state university loan or city university loan pursuant to section one hundred seventy-one-e of this article.
(F) the amount of a past-due legally enforceable debt owed to a state agency pursuant to section one hundred seventy-one-f of this article.
(G) the amount of a city of New York tax warrant judgment debt owed to the city of New York pursuant to section one hundred seventy-one-l of this article.
(ii) Only the balance remaining, after such overpayment and the interest thereon has been credited as described in paragraph (i) of this subdivision, shall be certified as an overpayment plus any interest to be credited against the amount of a default in repayment of a governmental education loan, with the remainder to be refunded to the taxpayer.
(5) The tax commission shall certify to the comptroller the total amount of the overpayment and the interest on such overpayment, the amount of such overpayment and the interest on such amount to be credited against the amount of the default in repayment of a governmental education loan and the balance of such overpayment and interest to be refunded to the taxpayer.
(6) The commissioner shall notify the taxpayer making the overpayment, in writing, of the amount of such overpayment and the interest thereon certified to the comptroller as the amount to be credited against the amount of a default in repayment of a governmental education loan. Such notice shall include notification to any other person who may have filed a joint return with the taxpayer of the steps such other person may take in order to secure his or her proper share of the refund.
(7) From the time the state tax commission is notified by the New York state higher education services corporation of an individual's, estate's or trust's default in repayment of a governmental education loan under the agreement provided for in this section, the state tax commission and the department shall be relieved from all liability to such individual, estate or trust, their assigns, successors, heirs or representatives for the amount of an overpayment and interest on such amount certified to the comptroller to be credited against the amount of default in repayment of a governmental education loan and such individual, estate or trust shall have no right to commence a court action or proceeding or to any other legal recourse against the state tax commission or the department to recover such overpayment or such interest certified to the comptroller to be credited against the amount of default in repayment of a governmental education loan. Provided, however, nothing herein shall be construed to prohibit such individual, estate or trust from proceeding against the New York state higher education services corporation to recover that part of such overpayment or interest thereon so certified to the comptroller to be credited against the amount of a default in repayment of a governmental education loan which is greater than the amount of such default owed by such individual, estate or trust on the date of such certification.
(8) The tax commission shall promulgate such rules and regulations as it deems necessary to carry out the provisions of this section.
Last modified: February 3, 2019