Subtraction modification for deductions related to the production and distribution of adult-use cannabis products (Articles 9-A and 22)

For tax years beginning on or after January 1, 2022, when computing entire net income (ENI) or New York adjusted gross income (NYAGI), a taxpayer will be allowed to subtract the amount of any federal deduction related to the production and distribution of adult-use cannabis products (as defined under Tax Law Article 20-C) that was not allowed under Internal Revenue Code section 280E, provided that the amount:

was not used as the basis for any other tax deduction, exemption, or credit; and

was not otherwise required to be added back when computing ENI or NYAGI.

For more information on this modification, see:

Form IT-225 , New York State Modifications , and its instructions .

Form CT-225 , New York State Modifications , and its instructions .

[Part PP of Chapter 59 of the Laws of 2022; Tax Law §§ 208(9)(a)(23) and 612(c)(46)]