Does the $750k limit on the mortgage principal also apply to NY Form IT-196?

[TK89]

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.

[RaifH]

No, New York did not conform with the changes brought about by the Tax Cuts and Jobs Act of 2017. New York still calculates deductible home mortgage interest based on the $1 million limit in place before that. 

If your loan is over $750,000, the amount reported on IT-196 Line 10 should be greater than the federal deduction reported on Schedule A Line 8. If your outstanding loan is over $1 million it will still not be the entire amount of interest paid in the year. You are also allowed to deduct interest on up to $100,000 of home equity debt in NY that was not used to acquire or substantially improve the home. Home equity debt is not deductible federally.  

You can amend the 2019 and 2020 state returns if the mortgage interest is not correct. Since this does not change anything on your 2021 return, you do not have to do this before filing this year's taxes. You have three years from the original due date of the return to file an amended return. 

@TK89