S T A T E O F N E W Y O R K
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10273
I N A S S E M B L Y
February 20, 2026
___________
Introduced by M. of A. R. CARROLL -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to the treatment of certain
deductions allowable under the internal revenue code in calculating
federal adjusted gross income
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (a) of subdivision 9 of section 208 of the tax
law is amended by adding four new subparagraphs 24, 25, 26, and 27 to
read as follows:
(24) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, THE AMOUNT OF ANY DEDUCTION ALLOWED PURSUANT
TO SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL
REVENUE CODE AS IF THE TAXPAYER HAS NOT MADE AN ELECTION PURSUANT TO
SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVEN-
UE CODE.
(25) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE AMOUNT OF ANY FOREIGN AND DOMESTIC RESEARCH OR
EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-
FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR INCURRED IN EACH
TAXABLE YEAR ON AND AFTER JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AMOR-
TIZED OVER A SIXTY-MONTH PERIOD AS IF THE ELECTION IN SUBSECTION (C) OF
SECTION 174A OF THE INTERNAL REVENUE CODE APPLIED TO SUCH FOREIGN AND
DOMESTIC RESEARCH OR EXPERIMENTAL EXPENDITURES.
(26) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE REMAINING AMOUNT OF ANY FOREIGN AND DOMESTIC
RESEARCH OR EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR
INCURRED PRIOR TO JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, DETERMINED AS
IF SECTION ONE HUNDRED SEVENTY-FOUR OF THE INTERNAL REVENUE CODE IN
EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO, APPLIED TO SUCH
EXPENDITURES.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14215-04-6
A. 10273 2
(27) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY AS DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF ANY DEDUCTION
MADE PURSUANT TO SECTION 179 OF THE INTERNAL REVENUE CODE AS IT SHALL
HAVE BEEN IN EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO.
§ 2. Paragraph (b) of subdivision 9 of section 208 of the tax law is
amended by adding three new subparagraphs 28, 29, and 30 to read as
follows:
(28) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, ANY AMOUNT WHICH THE TAXPAYER CLAIMED AS A
DEDUCTION UNDER SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE
INTERNAL REVENUE CODE THAT INCLUDED AN ALLOWANCE SOLELY AS A RESULT OF
AN ELECTION MADE PURSUANT TO SUBSECTION (N) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE.
(29) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, ANY AMOUNT CLAIMED AS A DEDUCTION UNDER SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE IN EFFECT AS
OF JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AND ANY AMOUNT CLAIMED AS A
DEDUCTION PURSUANT TO FEDERAL PUBLIC LAW 119-21, TITLE VII, SECTION
70302(F)(2)(A), FOR FOREIGN AND DOMESTIC RESEARCH OR EXPERIMENTAL
EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-FOUR AND 174A
OF THE INTERNAL REVENUE CODE.
(30) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF THE DEDUCTION
ALLOWABLE UNDER SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL REVENUE
CODE.
§ 3. Subsection (b) of section 612 of the tax law is amended by adding
three new paragraphs 44, 45 and 46 to read as follows:
(44) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, ANY AMOUNT WHICH THE TAXPAYER CLAIMED AS A
DEDUCTION UNDER SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE
INTERNAL REVENUE CODE THAT INCLUDED AN ALLOWANCE SOLELY AS A RESULT OF
AN ELECTION MADE PURSUANT TO SUBSECTION (N) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE.
(45) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, ANY AMOUNT CLAIMED AS A DEDUCTION UNDER SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE IN EFFECT AS
OF JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AND ANY AMOUNT CLAIMED AS A
DEDUCTION PURSUANT TO FEDERAL PUBLIC LAW 119-21, TITLE VII, SECTION
70302(F)(2)(A), FOR FOREIGN AND DOMESTIC RESEARCH OR EXPERIMENTAL
EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-FOUR AND 174A
OF THE INTERNAL REVENUE CODE.
(46) FOR TAXABLE YEARS BEGINNING AFTER DECEMBER THIRTY-FIRST, TWO
THOUSAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE, WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF THE DEDUCTION
ALLOWABLE UNDER SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL REVENUE
CODE.
A. 10273 3
§ 4. Subsection (c) of section 612 of the tax law is amended by adding
four new paragraphs 48, 49, 50, and 51 to read as follows:
(48) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, THE AMOUNT OF ANY DEDUCTION ALLOWED PURSUANT
TO SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL
REVENUE CODE AS IF THE TAXPAYER HAS NOT MADE AN ELECTION PURSUANT TO
SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVEN-
UE CODE.
(49) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE AMOUNT OF ANY FOREIGN AND DOMESTIC RESEARCH OR
EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-
FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR INCURRED IN EACH
TAXABLE YEAR ON AND AFTER JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AMOR-
TIZED OVER A SIXTY-MONTH PERIOD AS IF THE ELECTION IN SUBSECTION (C) OF
SECTION 174A OF THE INTERNAL REVENUE CODE APPLIED TO SUCH FOREIGN AND
DOMESTIC RESEARCH OR EXPERIMENTAL EXPENDITURES.
(50) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE REMAINING AMOUNT OF ANY FOREIGN AND DOMESTIC
RESEARCH OR EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR
INCURRED PRIOR TO JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, DETERMINED AS
IF SECTION ONE HUNDRED SEVENTY-FOUR OF THE INTERNAL REVENUE CODE IN
EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO, APPLIED TO SUCH
EXPENDITURES.
(51) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY AS DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF ANY DEDUCTION
MADE PURSUANT TO SECTION 179 OF THE INTERNAL REVENUE CODE AS IT SHALL
HAVE BEEN IN EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO.
§ 5. Paragraph 1 of subdivision (b) of section 1503 of the tax law is
amended by adding four new subparagraphs (X), (Y), (Z), and (AA) to read
as follows:
(X) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, THE AMOUNT OF ANY DEDUCTION ALLOWED PURSUANT
TO SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE INTERNAL
REVENUE CODE AS IF THE TAXPAYER HAS NOT MADE AN ELECTION PURSUANT TO
SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF THE INTERNAL REVEN-
UE CODE.
(Y) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE AMOUNT OF ANY FOREIGN AND DOMESTIC RESEARCH OR
EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-
FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR INCURRED IN EACH
TAXABLE YEAR ON AND AFTER JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AMOR-
TIZED OVER A SIXTY-MONTH PERIOD AS IF THE ELECTION IN SUBSECTION (C) OF
SECTION 174A OF THE INTERNAL REVENUE CODE APPLIED TO SUCH FOREIGN AND
DOMESTIC RESEARCH OR EXPERIMENTAL EXPENDITURES.
(Z) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, THE REMAINING AMOUNT OF ANY FOREIGN AND DOMESTIC
RESEARCH OR EXPERIMENTAL EXPENDITURES, AS DEFINED IN SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE, PAID OR
INCURRED PRIOR TO JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, DETERMINED AS
A. 10273 4
IF SECTION ONE HUNDRED SEVENTY-FOUR OF THE INTERNAL REVENUE CODE IN
EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO, APPLIED TO SUCH
EXPENDITURES.
(AA) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY AS DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF ANY DEDUCTION
MADE PURSUANT TO SECTION 179 OF THE INTERNAL REVENUE CODE AS IT SHALL
HAVE BEEN IN EFFECT AS OF JANUARY FIRST, TWO THOUSAND TWENTY-TWO.
§ 6. Paragraph 2 of subdivision (b) of section 1503 of the tax law is
amended by adding three new subparagraphs (AA), (BB), and (CC) to read
as follows:
(AA) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF QUALIFIED PRODUCTION PROPERTY DESCRIBED
IN PARAGRAPH TWO OF SUBSECTION (N) OF SECTION ONE HUNDRED SIXTY-EIGHT OF
THE INTERNAL REVENUE CODE, ANY AMOUNT WHICH THE TAXPAYER CLAIMED AS A
DEDUCTION UNDER SUBSECTION (A) OF SECTION ONE HUNDRED SIXTY-SEVEN OF THE
INTERNAL REVENUE CODE THAT INCLUDED AN ALLOWANCE SOLELY AS A RESULT OF
AN ELECTION MADE PURSUANT TO SUBSECTION (N) OF SECTION ONE HUNDRED
SIXTY-EIGHT OF THE INTERNAL REVENUE CODE.
(BB) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, ANY AMOUNT CLAIMED AS A DEDUCTION UNDER SECTIONS ONE
HUNDRED SEVENTY-FOUR AND 174A OF THE INTERNAL REVENUE CODE IN EFFECT AS
OF JANUARY FIRST, TWO THOUSAND TWENTY-FIVE, AND ANY AMOUNT CLAIMED AS A
DEDUCTION PURSUANT TO FEDERAL PUBLIC LAW 119-21, TITLE VII, SECTION
70302(F)(2)(A), FOR FOREIGN AND DOMESTIC RESEARCH OR EXPERIMENTAL
EXPENDITURES, AS DEFINED IN SECTIONS ONE HUNDRED SEVENTY-FOUR AND 174A
OF THE INTERNAL REVENUE CODE.
(CC) FOR TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TWENTY-FIVE, IN THE CASE OF SECTION 179 PROPERTY DESCRIBED IN
SUBSECTION (D) OF SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL
REVENUE CODE WITH RESPECT TO SUCH PROPERTY THE AMOUNT OF THE DEDUCTION
ALLOWABLE UNDER SECTION ONE HUNDRED SEVENTY-NINE OF THE INTERNAL REVENUE
CODE.
§ 7. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2025.