What Goes on Lines 49–51?

These three lines collect credits that come from separate forms and schedules. They aren’t calculated directly on the IT-201 itself — you compute each one on its own form, then transfer the result here. The credits grouped in this section, as listed in the IT-201 instructions, include:

• Accumulation distribution credit — applies when a trust distributes income that accumulated over multiple years and you, as the beneficiary, need relief from bunched-up taxation
• Investment tax credit (ITC) — for businesses that placed qualified property into service in New York; this flows to individual returns through partnerships and S corps via Form IT-245
• Empire State child credit — a state-specific credit for children ages 4 through 16, worth up to $330 per qualifying child, claimed on Form IT-213
• Real property tax credit — available to renters and homeowners with household income under $18,000, claimed on Form IT-214
• Other business credits — carried in from forms like IT-246, IT-249, and others tied to economic development incentives

If none of those descriptions ring a bell, you’re probably leaving these lines blank. That’s normal.

The Empire State Child Credit: The One That Surprises People

The federal child tax credit gets all the attention, but New York has its own version under NY Tax Law § 606(c-1) — and it’s completely separate. The Empire State child credit applies to children aged 4 through 16. Not under 4. Not 17. That specific window catches parents who assume they’ve already claimed everything at the federal level.

The credit is the greater of $100 per qualifying child or 33% of the portion of your child and dependent care credit that’s allocable to qualifying children. For most families, the flat $100-per-child amount applies. But families with high child care costs and multiple kids in that 4-to-16 range can see the credit reach up to $330 per child.

You’ll need to file Form IT-213 to claim it. There’s an income phase-out, but it’s set high enough that most middle-income families qualify. If you have three kids aged 5, 9, and 14, you’re looking at a minimum $300 credit that a surprising number of families leave on the table.

Accumulation Distribution Credit

This one is rare. It applies when you receive a distribution from a trust that accumulated income over prior years. Without the credit, you’d get taxed on several years’ worth of income all at once, pushing you into a higher bracket. The accumulation distribution credit smooths that out by approximating what the tax would have been if the income had been distributed year by year, consistent with the federal approach under IRC § 667.

If you received a lump distribution from a family trust or estate, your preparer should be looking at this. Most individual filers will never see it.

Investment Tax Credit and Business Credits

The investment tax credit rewards businesses for purchasing or placing qualified tangible property into service within New York, as authorized under NY Tax Law § 210-B. If you’re a partner in a partnership or a shareholder in an S corp that claimed the ITC, your share of the credit flows through on your K-1 and lands here on Line 49.

Other business credits in this section come from various state economic development programs — think START-UP NY, Excelsior Jobs Program, and similar incentives. These are reported on their own forms and transferred to the IT-201. Unless you’re actively participating in one of these programs, you won’t have entries here.

The PTET credit is separate from these business credits. Don’t mix them up — they’re reported on different lines and calculated on different forms.

Real Property Tax Credit

This credit is aimed at very low-income New Yorkers. To qualify, your household income has to be under $18,000, and you need to have paid real property taxes or rent on your primary residence. The maximum credit is $75 for homeowners or renters whose rent exceeds a certain percentage of income.

It’s a small credit, and the income threshold keeps most filers from qualifying. But for seniors on fixed incomes and low-wage workers who rent in New York, it’s worth checking. You’ll claim it on Form IT-214.

Common Mistakes on Lines 49–51

The biggest mistake is simply not knowing the Empire State child credit exists. Parents who claim the federal child tax credit assume they’ve covered everything, but the state credit is a separate claim with a separate form.

Another common error: S corp shareholders or partners entering their resident credit amounts on the wrong line. The resident credit for taxes paid to other states goes on Line 48, not here. These lines are specifically for the credits listed above.

Finally, some filers try to claim the real property tax credit when their income exceeds the $18,000 limit. The form will catch it, but it wastes time if you’re clearly above the threshold.

How These Credits Interact With Your Total Tax

Credits on Lines 49-51 reduce your tax liability after the household credit has already been applied. They’re non-refundable (with the exception of parts of the Empire State child credit under certain conditions), meaning they can bring your Line 39 state tax down to zero but won’t generate a refund by themselves.

If your total credits exceed your computed tax, the excess simply disappears — you don’t carry it forward. That’s different from some business credits, which do have carryforward provisions on their individual forms. Your preparer needs to layer these credits in the right order to get the maximum benefit. The taxable income on Line 37 determines the base, the standard deduction or itemized deduction shapes it, and these credits chip away at the resulting tax. For the full picture, see the IT-201 line-by-line guide.

Sources & References

• NY IT-201 Instructions — Lines 49–51 (tax.ny.gov)
• NY Tax Law § 606 — Credits Against Tax (nysenate.gov)
• Form IT-213 Instructions — Empire State Child Credit (tax.ny.gov)
• Form IT-214 Instructions — Real Property Tax Credit (tax.ny.gov)
• 26 U.S.C. § 667 — Accumulation Distribution Credit (law.cornell.edu)