Form IT-225: New York State Modifications (2026)

Last reviewed: 2025-10-29

Use the New York Tax Form Calculator Form IT-225 — New York State Modifications as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 New York state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Form IT-225 is an attachment to your main New York income tax return (IT-201 for residents, IT-203 for nonresidents/part-year residents, IT-204 for partnerships, or IT-205 for estates/trusts). It captures all New York State additions (to federal AGI) and subtractions (from federal AGI) that do not have their own designated line on the return.

By completing IT-225 you ensure that your New York adjusted gross income reflects state-specific differences between federal and state law. These differences may include items such as interest from U.S. government entities, certain partnership pass-through modifications, innovation hot-spot deductions, or other state-only subtractions. Accurate use of IT-225 supports audit readiness and avoids modifications being ignored by the NY DTF.

1. Who must file: You must attach IT-225 if you have any New York additions or subtractions without a dedicated line on your return. This includes individuals with pass-through income (from partnerships, S-corporations, trusts, or estates) that generate modification codes listed in the addition or subtraction charts.
2. Addition modifications (Schedule A): These increase your federal AGI for New York tax purposes. Examples include modification codes A-102 (interest income from U.S. government instrumentality), A-103 or A-104 (529 college savings schedule differences applicable to residents), or EA codes for entity flow-throughs. Enter amounts in column A (total) and column B (NYS allocated) for non-resident or part-year resident filers.
3. Subtraction modifications (Schedule B): These reduce federal AGI for New York tax purposes. Examples include S-103 (New York’s 529 contribution deduction), S-117 (income from certain partnership or S-corporation items), or S-302 (pass-through income for S-corporation where the corporation was a NY C-corporation). Similar two-column treatment applies for part-year residents/non-residents.
4. Entity and allocation rules: Partners, shareholders, and beneficiaries complete Part 2 of Schedules A and B to report EA/ES codes received from partnerships, S-corporations, estates or trusts. For non-residents or part-year residents, column B must reflect New York source amounts only.
5. Transfer to main return: After completing IT-225, line 9 (total additions) is entered on IT-201 line 23 or IT-203 line 22, and line 18 (total subtractions) is entered on IT-201 line 31 or IT-203 line 29. Ensure the totals reconcile and that you attach supporting schedules or forms as required.

Key Considerations and Practical Steps

Begin by reviewing your federal return for any items that differ under New York law (for example, federal interest exclusion from U.S. obligations may not apply under New York law). Refer to the “Addition Modifications Chart” and “Subtraction Modifications Chart” in the IT-225 instructions. For each applicable code, gather supporting documentation: K-1s, partnership statements, 529 contributions, etc.

Enter each modification code, description, and amount on Schedule A or Schedule B as appropriate. For part-year residents or non-residents, allocate the amount by entering the New York portion in column B (source income basis) so that only the correct portion impacts New York taxable income.

Example: You are a part-year resident of New York and during your New York resident period you contributed $8,000 to a NY 529 college savings account (qualified for subtraction code S-103). On Schedule B you enter code “S-103” and amount $8,000 in column A. In column B you enter the portion that applies to your New York resident months, e.g., $4,000. That $4,000 reduces your New York AGI.

After totaling both schedules, verify that line 9 (additions) equals the sum of Schedule A column A, and line 18 (subtractions) equals the sum of Schedule B column A. Carry over the amounts specified to your return lines per instructions. Review for consistency: modifications entered on IT-225 must be reflected in your IT-201 or IT-203 and reconciled with K-1s or partner/shareholder statements.

Failing to list a required code or using incorrect resident-allocation for column B is a common audit trigger. Maintain documentation for each code claimed, ensure worksheet or schedule support exists, and keep files for at least three years post-filing.

Audit and Planning Insights

Prepare a schedule of modifications each year. At year-end, coordinate with your payroll, partnership statements and 529 plan administrator to identify items that may require modifications. Early identification avoids last-minute scrambling and potential filing delays.

If you have pass-through income from interstate partnerships, verify New York source allocations. Use column B to scope only the portion that is sourced to New York — non-New York portions should not reduce or increase your New York income. Mis-allocation may lead to notices or adjustments.

For retirees or those with multiple K-1s, review whether any modification codes for “built-in gains” or “S-corporation basis increases” apply (such as A-304 or S-302). These items often require separate worksheets and may trigger depreciation or basis adjustment review by the NY DTF.

Best Practices for Year-Ahead Preparation

Maintain a “modification register” listing each applicable code, year incurred, amount, and supporting document. Update this ledger each time you receive a new K-1, S-corp distribution, or state-sponsored plan notification.

When changing residence or filing jointly/separately, review how modifications flow through column B (allocation) versus column A. Document your calculation of days or portions for part-year residents to support column B entries.

In audit scenarios, NY DTF may request your summary by modification code. Present the IT-225 together with your supporting schedule (modification code list), your main tax return, and K-1 or employer statements. Organized documentation avoids adjustment exposures and penalties.

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Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.