Common questions about NY Form IT-205 and IT-205-A in Lacerte

When preparing a NY resident estate or trust with one nonresident beneficiary and no income from New York sources, the instructions for Form IT-205 indicate Form IT-205-A shouldn't be included with the return filing.

Why is this form generated, along with a statement on Form IT-205, Schedule C, Share of New York Fiduciary Adjustment "Income distributed to nonresident beneficiaries consists only of income that is not taxable to nonresident individuals?"

New York Form IT-205-A is required for electronic filing. If it isn't included with the return when attempting to e-file, the return won't meet this business rule requirement due to the fact that page 1 amounts must include amounts from the IT-205-A and Schedule C. These forms are required, even when blank.

This form is not required when preparing a conventional paper filed return.

Table of contents:

Where can I enter partially tax exempt dividend income for a Fiduciary K-1 on the NY IT-205?

To enter partially tax exempt dividend income for a  K-1 on the NY IT-205:

1. Navigate to Screen 55.091 -  New York Modifications and Adjustments.
2. Navigate to Section - St. Mods.
3. Select New York in the St. Mods. section.
4. Enter description of the adjustment in the field labeled Description (code 800).
5. Enter amount in the field labeled Fiduciary adjustment (Code 2).

Note:  This entry will appear on NY IT-205, Schedule B -- positive amounts flow to line 65 and negative amounts flow to line 68.

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How do I generate an amount on IT-205, line 64 - Income taxes deducted on federal fiduciary return?

Lacerte generates an amount on IT-205, line 64 based on the state, local, and foreign income taxes including unincorporated business taxes deducted on the federal fiduciary return, line 11. See Form 1041, Line 11 for more information.

To override the amount calculated on NY IT-205, line 64:

1. Go to Screen 55.091, New York Modifications and Adjustments.
2. Click on the General button or the General link from the left navigation panel.
3. Scroll down to the New York Additions section.
4. Enter the amount in, Personal income taxes and unincorporated business taxes deducted in determining federal AGI [O] code 5.

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How do I generate New York City tax and mark NYC residency status on page 2, Schedule C, Line C of NY Form IT-205? 

To mark residency status for NYC on IT-205: 

1. Go to Screen 2.1, Miscellaneous Information.
2. Scroll to New York Miscellaneous section.
3. Enter a 4 or 5 in, NYC 4=full year, 5=part-year (code 102) under Residency Status subsection.

This entry checks the appropriate box on Form IT-205, page 2 and determines the need to file Form IT-205-A for a New York City non-resident or part-year resident trust.

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A NY IT-205 has pension income flowing to Line 68. It is necessary to adjust the amount on the line to match what the entity is really able to exclude. Is this possible?

1. On the Detail tab, go to Screen 55.
2. Select New York under St. Mods on the left panel.
3. Select General under Adjustment on the left panel.
4. Go to the Subtractions section.
5. Enter an amount in Pension and annuity income exclusion (-1=none) [O] (code 9).  Enter an amount to override the amount of pension and annuity income exclusion computed for Form IT-205, Schedule B, Line 67. This exclusion is limited to $20,000.

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Where do I enter Trustee information to override IT-205 Question F?

To override the address for NY IT-205, Question F:

1. Open Screen 2.1, Miscellaneous Information.
2. Scroll to the section New York.
3. Locate the field, List of executors and trustees with address and social security number [O](CTRL+E).
4. Enter the desired information.

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Why are my beneficiaries not showing on the New York (NY) Form IT-205, Page 2, Schedule C?

The name and address of the beneficiaries are not going to show on the IT-205, unless there is something distributed to the beneficiaries. Be sure that amounts or percentages have been entered into screen 7 (1041 Distributions).

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When there is an overpayment on the IT-205, the program is not applying any of the refund to the next year's estimated tax.

Estates (and any trusts that were treated as owned by the decedent and that received the residue of a decedent’s estate under the will, or if no will is admitted to probate, were primarily responsible for paying debts, taxes, and other expenses of administration) are exempt from paying estimated income tax payments for the tax year of the decedent’s death and the following tax year.

Exceptions — Generally, the estate or trust will not have to pay estimated tax if its 2008 income tax return will show (1) a tax refund, or (2) a tax balance due of less than $300 for New York State, New York City, or Yonkers. 

Force the return to apply the overpayment - In order to override and apply an overpayment to the next year's tax liability, enter a "1" on the Miscellaneous Information screen (Screen 2.1) in the field "1=decedent's estate open over 2 years,2=leave question blank[O]" (code 18).

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