§ 662. Computation of tax where taxpayer restores substantial amount
held under claim of right. (a) General. If:

(1) an item was included in New York adjusted gross income for a prior
taxable year (or years) because it appeared that the taxpayer had an
unrestricted right to such item, and

(2) for the current taxable year the provisions of paragraph five of
subsection (a) of section thirteen hundred forty-one of the internal
revenue code apply to such item, then the tax imposed by this article
for the taxable year shall be an amount equal to

(3) the tax for the taxable year computed without regard to this
section, minus

(4) the decrease in tax under this article for the prior taxable year
(or years) which would result solely from the exclusion of such item (or
portion thereof) from New York adjusted gross income for such prior
taxable year (or years).

(b) Special rules. (1) If the decrease in tax ascertained under
paragraph four of subsection (a) of this section exceeds the tax imposed
by this article for the taxable year, such excess shall be considered a
payment of tax on the last day prescribed by law for the payment of tax
for the taxable year, and shall be refunded or credited in the same
manner as if it were an overpayment for such taxable year.

(2) Nonresidents and part-year residents. In the case of a
nonresident or part-year resident, the exclusion of an item from New
York adjusted gross income for a prior taxable year beginning after
nineteen hundred eighty-seven under paragraph four of subsection (a) of
this section shall also be reflected, as appropriate, in the New York
source fraction.