New York ~ Personal Income Tax: Tenant’s Payments to Escrow Account Not Eligible for QEZE Credit

CCH Tax Day Report

The New York Tax Appeals Tribunal has affirmed an administrative law judge’s denial of a tenant’s personal income tax refund claimed for the qualified empire zone enterprise (QEZE) credit because its payments to the lender’s escrow account did not constitute eligible real property taxes. To claim the QEZE real property tax credit, a tenant is required to pay real property taxes directly to the taxing authority. In this case, although the tenant’s payments to the lender’s escrow account were ultimately used to pay real property taxes, those were deemed to be payments made through an intermediary and not direct payments to the taxing authority.

Balbo, New York Division of Tax Appeals, Tax Appeals Tribunal, DTA Nos. 825765 and 826269, August 18, 2016, ¶408-839

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