New York Form IT-257, officially titled Claim of Right Credit, is a tax form used to calculate a credit when a taxpayer repays income that was previously reported and taxed under a claim of right. The form applies to New York State income tax, New York City resident tax, New York City nonresident earnings tax, Yonkers resident income tax surcharge, Yonkers nonresident earnings tax, and the Metropolitan Commuter Transportation Mobility Tax (MCTMT). It allows eligible taxpayers to calculate the difference between the tax previously calculated on the income and the tax that would apply after accounting for the repayment. The 2025 version of Form IT-257 collects the taxpayer’s name, identifying number, original tax year in which the income was reported, amount of income repaid, and an explanation of the type of income and reason for repayment. It then provides six separate sections for calculating the applicable tax credits. Each section requires the taxpayer to enter the previously calculated tax, the recalculated tax, and the difference between those amounts. The resulting credit is calculated separately for each applicable tax category. The form is relevant to individuals and fiduciaries filing the appropriate New York tax returns. Individuals must transfer the calculated credits to the specified lines of their IT-201-ATT or IT-203-ATT, depending on their filing circumstances. Fiduciaries must include the applicable credits from Sections 1 through 5 on Form IT-205, line 33. Form IT-257 must be submitted with Form IT-201, IT-203, or IT-205. Completing the form correctly is important because each credit must be calculated using the appropriate previously calculated and recalculated tax amounts. The form helps ensure that taxpayers receive the applicable tax adjustment when income previously included in their taxable income is subsequently repaid.
How To File Form IT-257
Form IT-257 must be completed by taxpayers claiming a New York Claim of Right Credit for income that was previously reported under a claim of right and subsequently repaid.
The form is submitted together with the applicable New York income tax return. Taxpayers should complete the general information section, Lines 1 through 3, and every tax section that applies to their circumstances.
Where to File Form IT-257
Submit Form IT-257 with one of the following New York tax returns:
- Form IT-201: New York State Resident Income Tax Return.
- Form IT-203: Nonresident and Part-Year Resident Income Tax Return.
- Form IT-205: Fiduciary Income Tax Return.
The appropriate return depends on the taxpayer’s filing status.
What Information to Prepare Before Completing Form IT-257
Gather the following information before starting the form:
- Taxpayer’s name as shown on the applicable tax return.
- Identifying number as shown on the return.
- Tax year in which the income was originally reported under a claim of right.
- Total amount of income repaid.
- Description of the type of income involved.
- Explanation of why the income was repaid.
- Previously calculated New York State tax.
- Recalculated New York State tax.
- Previously calculated New York City resident or nonresident tax, if applicable.
- Recalculated New York City tax, if applicable.
- Previously calculated and recalculated Yonkers taxes, if applicable.
- Previously calculated and recalculated MCTMT amounts, if applicable.
- The applicable tax return and supporting tax calculations.
Having these details available will help ensure that each applicable credit is calculated accurately.
How To Complete Form IT-257
Form IT-257 contains a taxpayer identification section, three general information lines, and six separate tax credit calculation sections.
The taxpayer must complete Lines 1, 2, and 3, along with all sections that apply.
Taxpayer Information
Begin by entering the taxpayer’s identifying information at the top of the form.
Name(s) as Shown on Return
Enter the taxpayer’s name exactly as it appears on the corresponding New York income tax return.
For joint filers, include the names as shown on the applicable return.
Identifying Number as Shown on Return
Enter the identifying number associated with the tax return.
Use the appropriate taxpayer identification number shown on the corresponding New York income tax return.
General Claim of Right Information
Before calculating the individual tax credits, complete Lines 1 through 3.
These lines identify the original tax year, the amount of income repaid, and the circumstances surrounding the repayment.
Line 1: Tax Year for Which the Income Was Originally Reported Under a Claim of Right
Enter the tax year in which the income was originally reported under a claim of right.
This identifies the original reporting year associated with the income that was subsequently repaid.
Use the year in which the income was included in the taxpayer’s income under the claim of right.
Line 2: Amount of Income Repaid
Enter the total amount of income that was repaid.
This amount represents the income previously reported under a claim of right that the taxpayer subsequently returned or repaid.
Enter the actual repayment amount in dollars and cents.
Line 3: Type of Income and Reason for Repayment
Identify the type of income involved and explain why the taxpayer had to repay it.
Describe the nature of the income that was originally reported and provide a clear explanation of the circumstances that resulted in its repayment.
For example, identify the relevant income category and explain the reason the taxpayer was required to return the previously received amount.
Provide enough detail to explain the connection between the original income and the repayment.
Section 1: New York State Tax
Section 1 calculates the New York State Claim of Right Credit.
Complete this section to determine the difference between the previously calculated New York State tax and the recalculated New York State tax after accounting for the repayment.
Line 4: Previously Calculated New York State Tax
Enter the previously calculated New York State tax associated with the original income reporting.
Use the tax amount calculated before accounting for the repayment of the income.
Line 5: Recalculated New York State Tax
Enter the recalculated New York State tax after accounting for the income repayment.
This amount represents the revised New York State tax calculation associated with the claim of right.
Line 6: New York State Claim of Right Credit
Subtract the amount on Line 5 from the amount on Line 4.
Enter the difference on Line 6.
Calculation:
Line 6 = Line 4 − Line 5.
The resulting amount represents the New York State Claim of Right Credit.
For individuals, transfer the Line 6 amount to:
- Form IT-201-ATT, line 15; or
- Form IT-203-ATT, line 14.
For fiduciaries, include the Line 6 amount on Form IT-205, line 33.
Section 2: New York City Resident Tax
Section 2 calculates the New York City resident tax Claim of Right Credit.
Complete this section when the applicable New York City resident tax is involved in the claim of right calculation.
Line 7: Previously Calculated New York City Resident Tax
Enter the previously calculated New York City resident tax.
Use the tax amount determined before accounting for the repayment of the income.
Line 8: Recalculated New York City Resident Tax
Enter the recalculated New York City resident tax after accounting for the repayment.
This amount represents the revised tax calculation for the applicable income repayment.
Line 9: New York City Resident Claim of Right Credit
Subtract the amount on Line 8 from the amount on Line 7.
Enter the resulting difference on Line 9.
Calculation:
Line 9 = Line 7 − Line 8.
This amount represents the New York City resident tax Claim of Right Credit.
For individuals, transfer the Line 9 amount to:
- Form IT-201-ATT, line 16; or
- Form IT-203-ATT, line 15.
For fiduciaries, include the Line 9 amount on Form IT-205, line 33.
Section 3: New York City Nonresident Earnings Tax
Section 3 calculates the Claim of Right Credit for New York City nonresident earnings tax.
Complete this section when the taxpayer’s repayment affects the applicable New York City nonresident earnings tax calculation.
Line 10: Previously Calculated New York City Nonresident Earnings Tax
Enter the previously calculated New York City nonresident earnings tax.
Use the amount determined before accounting for the income repayment.
Line 11: Recalculated New York City Nonresident Earnings Tax
Enter the recalculated New York City nonresident earnings tax after accounting for the repayment.
This amount represents the revised tax calculation associated with the income repayment.
Line 12: New York City Nonresident Earnings Tax Claim of Right Credit
Subtract the amount on Line 11 from the amount on Line 10.
Enter the resulting difference on Line 12.
Calculation:
Line 12 = Line 10 − Line 11.
This amount represents the New York City nonresident earnings tax Claim of Right Credit.
For individuals, transfer the Line 12 amount to:
- Form IT-201-ATT, line 16; or
- Form IT-203-ATT, line 15.
For fiduciaries, include the Line 12 amount on Form IT-205, line 33.
Section 4: Yonkers Resident Income Tax Surcharge
Section 4 calculates the Claim of Right Credit for the Yonkers resident income tax surcharge.
Complete this section when the repayment affects the taxpayer’s applicable Yonkers resident income tax surcharge.
Line 13: Previously Calculated Yonkers Resident Income Tax Surcharge
Enter the previously calculated Yonkers resident income tax surcharge.
Use the amount calculated before accounting for the repayment of the income.
Line 14: Recalculated Yonkers Resident Income Tax Surcharge
Enter the recalculated Yonkers resident income tax surcharge after accounting for the repayment.
This amount represents the revised surcharge calculation associated with the income repayment.
Line 15: Yonkers Resident Claim of Right Credit
Subtract the amount on Line 14 from the amount on Line 13.
Enter the resulting difference on Line 15.
Calculation:
Line 15 = Line 13 − Line 14.
This amount represents the Yonkers resident income tax surcharge Claim of Right Credit.
For individuals, transfer the Line 15 amount to:
- Form IT-201-ATT, line 17; or
- Form IT-203-ATT, line 16.
For fiduciaries, include the Line 15 amount on Form IT-205, line 33.
Section 5: Yonkers Nonresident Earnings Tax
Section 5 calculates the Claim of Right Credit for Yonkers nonresident earnings tax.
Complete this section when the taxpayer’s repayment affects the applicable Yonkers nonresident earnings tax.
Line 16: Previously Calculated Yonkers Nonresident Earnings Tax
Enter the previously calculated Yonkers nonresident earnings tax.
Use the amount calculated before accounting for the repayment of the income.
Line 17: Recalculated Yonkers Nonresident Earnings Tax
Enter the recalculated Yonkers nonresident earnings tax after accounting for the income repayment.
This amount represents the revised tax calculation for the applicable repayment.
Line 18: Yonkers Nonresident Earnings Tax Claim of Right Credit
Subtract the amount on Line 17 from the amount on Line 16.
Enter the resulting difference on Line 18.
Calculation:
Line 18 = Line 16 − Line 17.
This amount represents the Yonkers nonresident earnings tax Claim of Right Credit.
For individuals, transfer the Line 18 amount to:
- Form IT-201-ATT, line 17; or
- Form IT-203-ATT, line 16.
For fiduciaries, include the Line 18 amount on Form IT-205, line 33.
Section 6: Metropolitan Commuter Transportation Mobility Tax (MCTMT)
Section 6 calculates the Claim of Right Credit for the Metropolitan Commuter Transportation Mobility Tax (MCTMT).
Complete this section when the repayment affects the taxpayer’s applicable MCTMT calculation.
Line 19: Previously Calculated MCTMT
Enter the previously calculated Metropolitan Commuter Transportation Mobility Tax.
Use the amount calculated before accounting for the repayment of the income.
Line 20: Recalculated MCTMT
Enter the recalculated MCTMT after accounting for the income repayment.
This amount represents the revised MCTMT calculation associated with the repayment.
Line 21: MCTMT Claim of Right Credit
Subtract the amount on Line 20 from the amount on Line 19.
Enter the resulting difference on Line 21.
Calculation:
Line 21 = Line 19 − Line 20.
This amount represents the MCTMT Claim of Right Credit.
For individuals, transfer the Line 21 amount to:
- Form IT-201-ATT, line 17a; or
- Form IT-203-ATT, line 16a.
The form does not provide a separate fiduciary transfer instruction for Line 21.
Additional Filing Considerations
Before submitting Form IT-257, taxpayers should understand how the different tax sections work and where the resulting credits must be reported.
Complete Only the Applicable Tax Sections
The form contains six separate tax calculation sections:
- Section 1: New York State tax.
- Section 2: New York City resident tax.
- Section 3: New York City nonresident earnings tax.
- Section 4: Yonkers resident income tax surcharge.
- Section 5: Yonkers nonresident earnings tax.
- Section 6: Metropolitan commuter transportation mobility tax.
Complete Lines 1, 2, and 3 and all tax sections that apply to the taxpayer’s circumstances.
Understand the Credit Calculation
Each tax section follows the same basic calculation method:
Previously calculated tax minus recalculated tax equals the Claim of Right Credit.
The resulting amounts are calculated separately for each applicable tax category.
Report the Credit on the Appropriate Tax Return
For individuals, the calculated credits must be transferred to the specified lines of Form IT-201-ATT or Form IT-203-ATT.
For fiduciaries, the credits calculated in Sections 1 through 5 are included on Form IT-205, line 33.
Make sure each amount is reported on the appropriate line of the applicable tax return.
Final Review Before Filing
Before submitting Form IT-257 with the applicable New York income tax return, review all identifying information and calculations.
Use the following checklist:
- Enter the taxpayer’s name exactly as shown on the return.
- Enter the correct identifying number.
- Complete Line 1 with the original tax year in which the income was reported under a claim of right.
- Enter the total income repaid on Line 2.
- Identify the type of income and explain the reason for repayment on Line 3.
- Complete Section 1 if New York State tax applies.
- Enter the previously calculated New York State tax on Line 4.
- Enter the recalculated New York State tax on Line 5.
- Calculate the New York State Claim of Right Credit on Line 6.
- Complete Section 2 if New York City resident tax applies.
- Enter the previously calculated New York City resident tax on Line 7.
- Enter the recalculated New York City resident tax on Line 8.
- Calculate the New York City resident Claim of Right Credit on Line 9.
- Complete Section 3 if New York City nonresident earnings tax applies.
- Enter the previously calculated tax on Line 10.
- Enter the recalculated tax on Line 11.
- Calculate the nonresident earnings tax credit on Line 12.
- Complete Section 4 if the Yonkers resident income tax surcharge applies.
- Enter the previously calculated surcharge on Line 13.
- Enter the recalculated surcharge on Line 14.
- Calculate the Yonkers resident Claim of Right Credit on Line 15.
- Complete Section 5 if Yonkers nonresident earnings tax applies.
- Enter the previously calculated tax on Line 16.
- Enter the recalculated tax on Line 17.
- Calculate the Yonkers nonresident earnings tax credit on Line 18.
- Complete Section 6 if MCTMT applies.
- Enter the previously calculated MCTMT on Line 19.
- Enter the recalculated MCTMT on Line 20.
- Calculate the MCTMT Claim of Right Credit on Line 21.
- Verify that all credit calculations use the correct previously calculated and recalculated tax amounts.
- Transfer the calculated credits to the appropriate lines of the applicable tax return or attachment.
- Attach Form IT-257 to Form IT-201, IT-203, or IT-205, as applicable.
Completing Form IT-257 accurately helps ensure that the applicable New York State, New York City, Yonkers, and MCTMT Claim of Right Credits are properly calculated and reported. Review each applicable section carefully, verify the calculations, and ensure that the resulting credits are transferred to the correct lines of the associated New York tax return.