I purchased a home in 2018 and the principal exceeded $750k. For my 2018 tax return, I see that the $750k limit was applied for my federal return and the limit was not applied for my NY State IT-196 Form. For my 2019 and 2020 returns, the principal still exceeded $750k and the limit was applied on both my federal and NY state (form IT-196) returns. Is this correct or should the higher amount (without the $750k limit) have been applied on NY Form IT-196? If so, is it possible to amend the NY Form IT-196 right now? Should I do this before filing my 2021 taxes (not yet filed)? Thank you in advance for your help.
