General.

(1) Where a resident individual receives income derived from sources within another state of the United States, a political subdivision of another state, the District of Columbia, or a province of Canada, such resident individual is entitled to a credit against his or her ordinary tax (see section 101.1 of this Title) for any income tax imposed on such income by the other jurisdiction. The term income tax imposed, as used in this section and in sections 120.2 through 120.5 of this Part, does not include the portion of such tax (determined in accordance with the provisions of section 120.6[b] of this Part) imposed on the ordinary income portion (or part thereof) of a lump sum distribution which is subject to the separate tax imposed by section 603 of the Tax Law. (See section 120.6 of this Part for the credit allowable against the separate tax on the ordinary income portion [or part thereof] of a lump sum distribution.) A resident estate or trust is also entitled to a similar credit against ordinary tax, computed in the same way and subject to the same exception and limitations, set forth in this section and sections 120.2 through 120.5 of this Part, as in the case of a resident individual.

(2) The credit against ordinary tax is allowable only for that portion of the income tax imposed by another state of the United States, a political subdivision of another state, the District of Columbia, or a province of Canada (or both another state of the United States and also one or more of its political subdivisions) which is applicable to the income derived from sources within such other taxing jurisdiction. (See section 120.4[d] of this Part for the definition of the term income derived from sources within another jurisdiction, and subdivision [c] of such section for the definition of income tax imposed by the other jurisdiction. )