Section 688. Interest on overpayment

--(a) General.--Notwithstanding the
  provisions of section sixteen of the state finance law,  interest  shall
  be  allowed  and  paid  as  follows  at  the overpayment rate set by the
  commissioner pursuant to section six hundred ninety-seven, or if no rate
  is set, at the rate of six per cent per annum upon  any  overpayment  in
  respect of the tax imposed by this article:
    (1)  from  the  date  of  the overpayment to the due date of an amount
  against which a credit is taken;
    (2) from the date of the overpayment to a date (to  be  determined  by
  the  commissioner) preceding the date of a refund check by not more than
  thirty days, whether or  not  such  refund  check  is  accepted  by  the
  taxpayer  after  tender of such check to the taxpayer. The acceptance of
  such check shall be without prejudice to any right of  the  taxpayer  to
  claim any additional overpayment and interest thereon.
    (3)  Late  returns. Notwithstanding the provisions of paragraph one or
  two of this subsection, in the case of a return of tax  which  is  filed
  after  the  last date prescribed for filing such return (determined with
  regard to extensions), no interest shall be allowed or paid for any  day
  before the date on which the return is filed.
    (4)  Interest  on  certain  refunds.  To  the  extent  provided for in
  regulations promulgated by the commissioner of taxation and finance,  if
  an  item  of income, gain, loss, deduction or credit is changed from the
  taxable year or period in which it is reported to the  taxable  year  or
  period  in which it belongs and the change results in an underpayment in
  a taxable year or period and an overpayment in some other  taxable  year
  or  period,  the  provisions  of paragraph three of this subsection with
  respect to an overpayment shall not be applicable to the extent that the
  limitation in such paragraph on the right to interest would result in  a
  taxpayer not being allowed interest for a length of time with respect to
  an  overpayment  while  being  required to pay interest on an equivalent
  amount of the related underpayment. However, this paragraph shall not be
  construed as limiting  or  mitigating  the  effect  of  any  statute  of
  limitations  or  any other provision of law relating to the authority of
  such commissioner to issue a notice of deficiency or to allow  a  credit
  or refund on an overpayment.
    (5)  Amounts  of less than one dollar. No interest shall be allowed or
  paid if the amount thereof is less than one dollar.
    (b) Advance payment of tax, payment of estimated tax, and  credit  for
  income  tax  withholding.--The  provisions of subsections (h) and (i) of
  section six hundred eighty-seven applicable in determining the  date  of
  payment  of tax for purposes of determining the period of limitations on
  credit or refund, shall be applicable in determining the date of payment
  for purposes of this section.
    (c)  Income  tax  refund  within  forty-five   days   of   claim   for
  overpayment.--If  any  overpayment  of  tax  imposed  by this article is
  credited  or  refunded  within  forty-five  days  after  the  last  date
  prescribed  (or permitted by extension of time) for filing the return of
  such tax on which such overpayment was claimed or within forty-five days
  after such return was filed, whichever is later, or  within  six  months
  after  a  demand is filed pursuant to paragraph six of subsection (b) of
  section six hundred fifty-one of this  chapter,  no  interest  shall  be
  allowed  under  this  section  on  any such overpayment. In regard to an
  amended return claiming such overpayment or a claim for credit or refund
  on which such overpayment was claimed, if such overpayment  is  refunded
  within  forty-five days of filing such return or such claim, no interest
  shall be allowed from the date such return or such claim is filed  until
  the day the refund is made. For purposes of this subsection, any amended
  return  or  claim  for  credit  or  refund  filed  before  the  last day

  prescribed (or permitted by extension of time) for  the  filing  of  the
  return  of  tax  for such year shall be considered as filed on such last
  day.
    (d)  Refund  of  income tax caused by carryback.--For purposes of this
  section, if any overpayment of tax imposed by this article results  from
  a  carryback  of  a net operating loss, such overpayment shall be deemed
  not to have been made prior to the filing date for the taxable  year  in
  which  such  net  operating  loss  arises.  Such  filing  date  shall be
  determined without regard to extensions of time to file. For purposes of
  subsection (c) of this section any overpayment described herein shall be
  treated as an overpayment for the loss year and such subsection shall be
  applied with respect to such overpayment by treating the return for  the
  loss  year  as not filed before claim for such overpayment is filed. The
  term "loss year" means the taxable year in which such loss arises.
    (e) No interest until return in processible form.
    (1) For purposes of subsections (a) and (c) of this section, a  return
  shall not be treated as filed until it is filed in processible form.
    (2) For purposes of paragraph one of this subsection, a return is in a
  processible form if--
    (A) such return is filed on a permitted form, and
    (B) such return contains--
    (i)  the  taxpayer's  name,  address,  and  identifying number and the
  required signatures, and
    (ii) sufficient required information (whether  on  the  return  or  on
  required  attachments)  to  permit  the mathematical verification of tax
  liability shown on the return.
    (f) Overpayment  credited  against  past-due  support,  or  against  a
  past-due  legally  enforceable  debt,  or a city of New York tax warrant
  judgment debt, or defaulted guaranteed student, state university or city
  university loans.--If interest is payable pursuant to  this  section  on
  that  portion  of an overpayment of tax imposed by this article which is
  certified by the commissioner of taxation and finance to the comptroller
  as the amount to be credited against  past-due  support,  or  against  a
  past-due  legally  enforceable  debt,  or a city of New York tax warrant
  judgment debt, or the amount of a default in repayment of  a  guaranteed
  student,  state  university or city university loan, as the case may be,
  pursuant to the provisions of section one hundred seventy-one-c, section
  one hundred seventy-one-d, section one  hundred  seventy-one-e,  section
  one  hundred  seventy-one-f or section one hundred seventy-one-l of this
  chapter, such portion  of  such  an  overpayment  shall  cease  to  bear
  interest on the date of such certification.
    (g)  Cross-reference.--For  provision  with  respect to interest after
  failure to file notice of  federal  change  under  section  six  hundred
  fifty-nine, see subsection (c) of section six hundred eighty-seven.
    (h)  Notwithstanding any other provisions in this section, for taxable
  years beginning on or after January first, two thousand eight and before
  January first, two  thousand  nine,  interest  will  be  allowed  on  an
  overpayment on any return or report on which one or more empire zone tax
  credits  are  claimed, only from the one hundred eightieth day after the
  taxpayer files with the department an empire zone retention  certificate
  issued pursuant to subdivision (w) of section nine hundred fifty-nine of
  the  general  municipal  law  to the empire zone enterprise which is the
  basis for the tax credit or credits claimed on the return or report.