Form IT-221, officially known as the Disability Income Exclusion, is a New York State tax form used by eligible taxpayers to claim an exclusion for qualifying disability income. It applies to New York State income tax, New York City income tax, and Yonkers income tax calculations. The form is designed for individuals who receive disability payments and satisfy the applicable permanent and total disability requirements. It collects information about the taxpayer’s retirement date, employer or disability payment provider, disability income received during the tax year, and the amount eligible for exclusion. Married taxpayers may also report their spouse’s disability income separately when both individuals qualify. The form calculates the allowable exclusion by considering the amount of disability payments received, the number of qualifying weeks, payments for partial weeks, and the applicable income limitation. It also includes a statement of permanent and total disability that may need to be completed and signed by a physician. This medical certification helps establish whether the taxpayer meets the disability requirements for the exclusion. Form IT-221 is important because it determines the amount of qualifying disability income that can be subtracted through a New York State tax modification. The calculated exclusion is transferred to Form IT-225 using subtraction modification code S-124. Completing the form accurately helps ensure that the taxpayer claims only the eligible exclusion and provides the required supporting medical certification when necessary.
How To File Form IT-221
Form IT-221 must be submitted with your New York State income tax return. It is a supporting form used to calculate the disability income exclusion and is not a standalone tax return.
Attach the completed form to one of the following:
- Form IT-201: New York State Resident Income Tax Return.
- Form IT-203: New York State Nonresident and Part-Year Resident Income Tax Return.
The appropriate return depends on your New York State residency and filing circumstances.
Information To Prepare Before Completing The Form
Gather the following information before starting:
- Your name as shown on your New York State income tax return.
- Your Social Security number.
- Your spouse’s name and Social Security number, if applicable.
- Your disability retirement date, if applicable.
- Your spouse’s disability retirement date, if applicable.
- Your employer’s name.
- The name of the disability payment provider, if different from your employer.
- Total disability payments received during the tax year.
- The number of weeks in which disability payments were at least $100.
- Details of any weeks in which disability payments were less than $100.
- Information about disability payments received for periods shorter than one week.
- Your federal adjusted gross income information from Form IT-201 or Form IT-203.
- Your previous physician’s disability certification, if applicable.
- A completed physician’s statement, if a new certification is required.
Important Filing Considerations
Disability Qualification
The exclusion is intended for taxpayers who meet the applicable permanent and total disability requirements. The physician’s statement provides the medical certification needed to establish eligibility.
Retirement Date
If you retired after December 31, 1976, enter your retirement date in the designated area on page 1 and in the physician’s statement section on page 2.
Married Taxpayers
If both spouses received disability income, use Column A for your disability payments and Column B for your spouse’s payments. Special proration instructions apply when both spouses claim the exclusion.
Income Limitation
The form includes an exclusion limitation calculation based on the federal amount reported on Form IT-201 or Form IT-203. The form specifies $15,000 as the amount used to calculate the exclusion decrease.
Physician’s Certification
If you cannot use the previously established disability certification provision, your physician must complete the statement on page 2. Both pages must be submitted with your tax return when a new physician’s statement is required.
How To Complete Form IT221
Form IT-221 contains an identification section, disability income calculations, an exclusion limitation calculation, and a physician’s statement.
Complete the applicable fields carefully and use the instructions below to understand each entry.
Taxpayer and Spouse Information
Before completing the numbered lines, enter the identifying information requested at the top of page 1.
Name(s) as Shown on Your Return
Enter your name exactly as it appears on your New York State income tax return. If filing jointly, ensure that the taxpayer and spouse information is consistent with the main return.
Social Security Number
Enter the taxpayer’s Social Security number in the designated field.
Spouse’s Name
If you are married and completing the form with your spouse’s disability income information, enter your spouse’s name in the appropriate identification area.
Spouse’s Social Security Number
Enter your spouse’s Social Security number in the designated field.
Your Date of Retirement
Enter the date you retired if your retirement occurred after December 31, 1976. This date must also be entered in the physician’s statement section on page 2.
Your Spouse’s Date of Retirement
If your spouse also received disability income and the retirement date applies, enter the spouse’s retirement date in the designated space.
Employer’s Name
Enter the name of your employer associated with the disability payments.
If the disability payments were made by a different organization or payer, also provide that payer’s name.
Spouse Living Separately Checkbox
Mark an X in this box if you did not live with your spouse during any part of the tax year.
This information is relevant when determining the appropriate treatment of disability income for married taxpayers.
Understanding Columns A and B
The form provides two columns for reporting disability income.
Column A: Yourself
Enter your own disability payment amounts in Column A.
Column B: Your Spouse
If your spouse also received disability income during the tax year, enter the spouse’s applicable amounts in Column B.
If you selected married filing separately as your filing status, follow the special instructions applicable to that filing situation.
Disability Income Exclusion Calculation
This section calculates the disability income that may qualify for exclusion.
Disability Payment Entries
Line 1: Total Disability Pay Received During the Tax Year
Enter the total disability payments you received during the tax year.
If your spouse also received disability payments, report the spouse’s total separately in Column B.
Use Column A for your payments and Column B for your spouse’s payments.
Line 2: Disability Payments of at Least $100 Per Week
Multiply $100 by the number of weeks during which your disability payments were at least $100.
Calculation:
Line 2 = $100 × Number of qualifying weeks.
For example, if you received at least $100 in disability payments for 30 weeks:
$100 × 30 = $3,000.
Enter the calculated amount in the appropriate column.
Apply the same calculation separately to your spouse’s qualifying weeks, if applicable.
Line 3: Disability Payments of Less Than $100 Per Week
If you received disability payments of less than $100 during any week, enter the total amount received for all those weeks.
Include the applicable payments for each qualifying week in which the amount was below $100.
If your spouse also received such payments, enter the spouse’s amount separately in Column B.
Line 4: Disability Payments for Less Than One Week
Use this line if you received disability payments for a period shorter than one full week.
Enter the smaller of the following amounts:
- The actual disability payment received for that period.
- The highest exclusion amount allowed for the applicable period.
Use the applicable instructions to determine the maximum exclusion allowed for a period shorter than one week.
If the same situation applies to your spouse, calculate the amount separately in Column B.
Line 5: Total Excludable Disability Pay
Add the amounts reported on lines 2, 3, and 4 separately for each column.
Calculation:
Line 5 = Line 2 + Line 3 + Line 4.
The result represents the preliminary excludable disability income for each individual.
Enter your total in Column A and your spouse’s total in Column B, if applicable.
Line 6: Combined Excludable Disability Pay
Add the amounts reported on line 5 in Columns A and B.
Calculation:
Line 6 = Line 5, Column A + Line 5, Column B.
Enter the combined amount in the designated space.
This figure is used in the following section to determine the amount eligible for exclusion after applying the income limitation.
Limit on Disability Income Exclusion
This section calculates the reduction in the allowable exclusion based on the taxpayer’s federal adjusted gross income.
Line 7: Federal Amount From Your New York State Tax Return
Enter the amount reported on line 19 of the applicable New York State income tax return.
Use:
- Form IT-201, line 19; or
- Form IT-203, line 19, Federal amount column.
This figure is used to determine the applicable reduction in the disability income exclusion.
Line 8: Amount Used to Calculate the Exclusion Decrease
The form provides a fixed amount of $15,000 on this line.
Enter $15,000 as shown on the form.
This amount is used to determine whether the disability income exclusion must be reduced.
Line 9: Amount Above the Exclusion Decrease Threshold
Subtract line 8 from line 7.
Calculation:
Line 9 = Line 7 − Line 8.
If line 8 is greater than line 7, enter zero.
The result represents the amount used in determining the reduction of the allowable disability income exclusion.
Line 10: Remaining Disability Income Eligible for Exclusion
Subtract line 9 from line 6.
Calculation:
Line 10 = Line 6 − Line 9.
If line 9 is greater than line 6, stop the calculation because you cannot claim a disability income exclusion.
If the result is zero or greater, continue to line 11.
Line 11: Final Disability Income Exclusion
Enter the amount calculated on line 10 in Column A.
This amount represents your disability income exclusion before applying any required spouse proration.
If both spouses received disability payments, follow the applicable instructions for dividing or prorating the exclusion between the two spouses.
Use Column A for your share and Column B for your spouse’s share, where applicable.
Transferring the Disability Income Exclusion to Form IT-225
After completing line 11, add the amounts reported in Columns A and B.
Transfer the combined exclusion amount to:
- Form IT-225, line 10, Total amount column.
- Enter S-124 in the Number column as the subtraction modification code.
This identifies the amount as a disability income exclusion when reporting the New York State tax modification.
Statement of Permanent and Total Disability
The bottom section of page 1 contains a checkbox for taxpayers who have previously submitted a physician’s statement establishing permanent and total disability.
This section determines whether a new medical certification is required for the current tax year.
Previously Submitted Physician’s Statement Checkbox
Mark an X in this box if both of the following conditions apply:
- You previously submitted a physician’s statement for this disability for tax year 1984, or submitted a statement for a tax year after 1984 in which the physician marked Box B.
- Because of your continuing disabled condition, you were unable to engage in any substantial gainful activity during the current tax year.
If you meet these conditions, you do not need to submit another physician’s statement for the current tax year.
If you do not meet these conditions, ask your physician to complete the statement on page 2.
Submit both pages of Form IT-221 with your tax return when a new physician’s statement is required.
Page 2: Physician’s Statement
Page 2 contains the medical certification section that must be completed by a qualified physician when a new statement is required.
The physician confirms the taxpayer’s permanent and total disability status and identifies the applicable medical certification category.
Patient and Disability Information
Name of Patient
Enter the full name of the individual whose disability is being certified.
This should match the taxpayer or spouse claiming the disability income exclusion.
Permanent and Total Disability Certification
The physician must certify that the patient was permanently and totally disabled on the applicable date.
The certification must establish one of the following circumstances:
- The individual was permanently and totally disabled on January 1, 1976.
- The individual was permanently and totally disabled on January 1, 1977.
- The individual was permanently and totally disabled on the date of retirement.
The applicable date depends on when the taxpayer retired due to disability.
Date Retired
If the individual retired after December 31, 1976, enter the retirement date in the space provided.
Use the required month, day, and year format (MMDDYYYY).
This date must agree with the retirement information entered on page 1.
Physician’s Disability Certification
The physician must select only one of the following two certification boxes.
Box A: Disability Lasting or Expected to Last at Least One Year
Mark an X in Box A if the disability has continued, or is expected to continue, for at least one uninterrupted year.
This certification establishes that the disability meets the specified duration requirement.
Box B: Disability Not Expected to Improve
Mark an X in Box B if there is no reasonable probability that the individual’s disabled condition will ever improve.
The physician must select only one box, either A or B.
Physician’s Signature and Identification
Physician’s Signature
The physician must sign the statement to confirm the medical certification.
Date
Enter the date on which the physician signs the statement.
Physician’s Name
Enter the physician’s full name in printed or typed form.
Physician’s Address
Provide the physician’s complete professional address.
Ensure that the information is readable and that the statement is properly signed before submitting it with the tax return.
Instructions for the Physician’s Statement
The final section on page 2 provides additional guidance for both the taxpayer and the physician.
Instructions for the Taxpayer
Retirement Date Information
If you retired after December 31, 1976, enter your retirement date in the designated space.
This date must also be provided in the physician’s statement section.
Physician Completion Requirement
If a new medical certification is required, your physician must complete the statement on page 2.
Submission of Both Pages
When a new physician’s statement is required, submit both the front and back pages of Form IT-221 with your New York State income tax return.
Both Spouses Claiming the Exclusion
If both spouses are claiming the disability income exclusion, a separate physician’s statement must be completed for each spouse.
Each individual’s disability must be supported by the appropriate medical certification.
Disability Retirement Before January 1, 1977
If you retired due to disability before January 1, 1977, the physician’s statement must establish that you were permanently and totally disabled on January 1, 1976, or January 1, 1977.
Disability Retirement After 1976
If you retired due to disability after 1976, the physician’s statement must establish that you were permanently and totally disabled when you retired.
Instructions for the Physician
Definition of Permanent and Total Disability
For this certification, an individual is considered permanently and totally disabled when a physical or mental condition prevents them from participating in any substantial gainful activity.
The physician must determine whether the disability satisfies at least one of the following conditions:
- The disability has lasted or is expected to last continuously for at least one year.
- The disability can be expected to lead to death.
Completing the Medical Certification
The physician must:
- Complete the patient identification section.
- Confirm the applicable permanent and total disability date.
- Enter the retirement date if the individual retired after December 31, 1976.
- Select either Box A or Box B.
- Sign the physician’s statement.
- Enter the date of signature.
- Print or type the physician’s name.
- Provide the physician’s professional address.
After completing the certification, the physician should return the signed statement to the taxpayer for submission with the New York State income tax return.
Final Review Before Filing
Before submitting Form IT-221, review the following checklist to ensure that all required information and calculations are complete.
Taxpayer and Spouse Information
- Your name matches your New York State income tax return.
- Your Social Security number is correct.
- Your spouse’s name and Social Security number are entered, if applicable.
- Your retirement date is entered if you retired after December 31, 1976.
- Your spouse’s retirement date is included where applicable.
- Your employer’s name is provided.
- The disability payment provider’s name is included if different from your employer.
- The spouse living-separately checkbox is marked correctly, if applicable.
Disability Income Calculation
- Your total disability payments are reported on line 1.
- Your spouse’s disability payments are reported separately, if applicable.
- Line 2 includes the correct calculation for weeks with payments of at least $100.
- Line 3 includes payments received during weeks with payments below $100.
- Line 4 includes applicable payments for periods shorter than one week.
- Line 5 correctly adds lines 2, 3, and 4.
- Line 6 correctly combines the amounts from Columns A and B.
Exclusion Limitation
- Line 7 agrees with Form IT-201 or Form IT-203.
- Line 8 reflects the $15,000 amount shown on the form.
- Line 9 is calculated correctly.
- Line 10 reflects the remaining eligible disability income.
- Line 11 includes the correct disability income exclusion.
- Any required spouse proration has been completed.
- The combined exclusion is transferred to Form IT-225, line 10.
- Subtraction modification code S-124 is entered in the Number column.
Physician’s Statement
- You have determined whether a new physician’s statement is required.
- The previous-certification checkbox is marked only when the stated conditions are satisfied.
- The patient’s name is entered correctly on page 2.
- The applicable permanent and total disability date is certified.
- The retirement date is entered if applicable.
- The physician has selected only one certification box.
- The physician’s signature and signature date are included.
- The physician’s printed name and address are provided.
- A separate physician’s statement is completed for each spouse claiming the exclusion, if required.
Final Submission
- All applicable calculations have been reviewed.
- Required medical certification is included.
- Both pages of Form IT-221 are submitted when a new physician’s statement is required.
- Form IT-221 is attached to Form IT-201 or Form IT-203.
- The disability income exclusion transferred to Form IT-225 agrees with the completed calculation.
Final Reminder: Form IT-221 is used to calculate the New York State disability income exclusion for eligible taxpayers. Pay particular attention to the disability payment calculations, the $15,000 exclusion decrease amount, married-spouse proration, and physician certification requirements. The form refers taxpayers to Form IT-221-I for the detailed exclusion limitations and additional calculation instructions. Review those instructions when determining the exact allowable exclusion, particularly for married taxpayers filing separately or when both spouses receive disability payments.