ALBANY — More than 50,000 New York taxpayers who filed their returns early got a bit of scare this year when a typo resulted in them being issued reduced refunds or receiving notices demanding they pay more taxes before the error was corrected.
The snafu unfolded in early March when the state Department of Taxation and Finance sent a notice to tax professionals regarding New York residents who are married and filing their taxes jointly or filed as a qualified surviving spouse. It affected those who had an adjusted gross income between $107,650 to $161,550, and they were informed they would receive refunds lower than what they were owed, or in some cases a bill indicating that additional income tax was owed.
“The Department of Taxation and Finance (DTF) discovered an error in the tax computation that impacted a select number of returns,” the notice stated. “Affected returns will be reprocessed automatically by DTF, and corrected notices including additional refund amounts, if applicable, will be sent directly to impacted taxpayers. No taxpayer action is necessary.”
According to the department, the reduced refunds resulted from a typo in one of the withholding tables included in the submitted tax forms. The typo was noticed around the third week of February and fixed around the start of March, the department said, and those who have yet to file will not be affected.
The department added that the issue affected around 52,000 people in the state — less than 1% of all people who are expected to file returns this tax season. Refunds have been issued after the error was detected, but the department said that some may not have received a refund yet as their returns continue to be examined.
In terms of the monetary amount withheld, the department downplayed the impact, saying it represented a similar “fraction of 1%” of all funds. They declined to give an exact number.
Nearly 6 million residents have already submitted their tax returns as of Wednesday, with the state’s remaining taxpayers expected to file in the next two weeks as the April 15 deadline approaches. The state has around 11 million people who submit tax returns as either full-time or part-time residents.
Data from the department from 2023, the most recent year available, shows around 500,000 married filing jointly tax returns with an adjusted gross income between $100,000 and $150,000 — an income range similar to the one that involved the error. That represents roughly 4.5% of all tax returns filed that year.