Bill Text: NY S00277 | 2023-2024 | General Assembly | Amended
Bill Title: Provides for a working families tax credit; directs quarterly prepayment of the credit; provides for a sliding reduction in the credit for incomes which exceed a certain threshold.
Spectrum: Moderate Partisan Bill (Democrat 26-3)
Status: (Introduced) 2024-07-10 - PRINT NUMBER 277C [S00277 Detail]
Download: New_York-2023-S00277-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 277--C 2023-2024 Regular Sessions IN SENATE (Prefiled) January 4, 2023 ___________ Introduced by Sens. GOUNARDES, COONEY, ASHBY, BRESLIN, BROUK, CHU, CLEARE, COMRIE, FERNANDEZ, GONZALEZ, HARCKHAM, HINCHEY, HOYLMAN-SIGAL, JACKSON, KAVANAGH, MANNION, MAY, MAYER, MURRAY, MYRIE, RAMOS, RIVERA, SALAZAR, SEPULVEDA, SERRANO, WEBB, WEBER -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Budget and Revenue in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to a New York state working families tax credit The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (d) of section 606 of the tax law is amended by 2 adding a new paragraph 9 to read as follows: 3 (9) Commencing in the taxable year next succeeding the effective date 4 of subsection (c-2) of this section, the earned income credit for 5 taxpayers with qualifying children through age seventeen, as defined in 6 paragraph one of subsection (c-2) of this section, shall be reduced over 7 the course of four years as follows: 8 (A) In the first taxable year succeeding the effective date of 9 subsection (c-2) of this section, the applicable percentage of the 10 earned income credit allowed under section thirty-two of the internal 11 revenue code for the same taxable year, as described in paragraph one of 12 this subsection, shall be reduced to twenty-five; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02008-14-4S. 277--C 2 1 (B) In the second taxable year succeeding the effective date of 2 subsection (c-2) of this section, the applicable percentage of the 3 earned income credit allowed under section thirty-two of the internal 4 revenue code for the same taxable year, as described in paragraph one of 5 this subsection, shall be reduced to twenty; 6 (C) In the third taxable year succeeding the effective date of 7 subsection (c-2) of this section, the applicable percentage of the 8 earned income credit allowed under section thirty-two of the internal 9 revenue code for the same taxable year, as described in paragraph one of 10 this subsection, shall be reduced to fifteen; 11 (D) In the fourth taxable year succeeding the effective date of 12 subsection (c-2) of this section, the applicable percentage of the 13 earned income credit allowed under section thirty-two of the internal 14 revenue code for the same taxable year, as described in paragraph one of 15 this subsection, shall be reduced to ten. 16 (E) In the fifth taxable year succeeding the effective date of 17 subsection (c-2) of this section and each taxable year thereafter, the 18 applicable percentage of the earned income tax credit allowed under 19 section thirty-two of the internal revenue code for the same taxable 20 year, as described in paragraph one of this subsection, shall be reduced 21 to zero. 22 Taxpayers with both qualifying children through age seventeen as 23 defined in paragraph one of subsection (c-2) of this section and another 24 qualifying child, as defined in 26 USC §152(c), and/or a qualifying 25 relative, as defined in 26 USC §152(d), shall not be subject to the 26 reduction of the earned income tax credit provided in subparagraphs (A) 27 through (D) of this paragraph and shall continue to receive the full 28 applicable percentage of the earned income credit allowed under section 29 thirty-two of the internal revenue code for the same taxable year, as 30 described in paragraph one of this subsection, until the fifth taxable 31 year succeeding the effective date of subsection (c-2) of this section 32 and each taxable year thereafter, at which point such taxpayer shall 33 receive such full applicable percentage only for a qualifying child, as 34 defined in 26 USC §152(c), and/or qualifying relative, as defined in 26 35 USC §152(d), who does not meet the definition of qualifying child 36 through age seventeen in paragraph one of subsection (c-2) of this 37 section. 38 § 2. Paragraph 1 of subsection (c-1) of section 606 of the tax law, as 39 amended by section 1 of part HH of chapter 56 of the laws of 2023, is 40 amended to read as follows: 41 (1) [A] For taxable years prior to the first of January next succeed- 42 ing the effective date of subsection (c-2) of this section, a resident 43 taxpayer shall be allowed a credit as provided herein equal to the 44 greater of one hundred dollars times the number of qualifying children 45 of the taxpayer or the applicable percentage of the child tax credit 46 allowed the taxpayer under section twenty-four of the internal revenue 47 code for the same taxable year for each qualifying child. Provided, 48 however, in the case of a taxpayer whose federal adjusted gross income 49 exceeds the applicable threshold amount set forth by section 24(b)(2) of 50 the Internal Revenue Code, the credit shall only be equal to the appli- 51 cable percentage of the child tax credit allowed the taxpayer under 52 section 24 of the Internal Revenue Code for each qualifying child. For 53 the purposes of this subsection, a qualifying child shall be a child who 54 meets the definition of qualified child under section 24(c) of the 55 internal revenue code. The applicable percentage shall be thirty-three 56 percent. For purposes of this subsection, any reference to section 24 ofS. 277--C 3 1 the Internal Revenue Code shall be a reference to such section as it 2 existed immediately prior to the enactment of Public Law 115-97. 3 § 3. Section 606 of the tax law is amended by adding a new subsection 4 (c-2) to read as follows: 5 (c-2) New York state working families tax credit. (1) Definitions. 6 (A) "Adjusted for all inflation since two thousand twenty-three" shall 7 mean the commissioner increases the dollar amount of a credit or 8 adjusted gross income, as applicable, by an amount equal to the sum of 9 all cost-of-living adjustments calculated and published by the internal 10 revenue service pursuant to 26 USC §1(f)(3) since calendar year two 11 thousand twenty-three. 12 (B) "Qualifying child" or "qualifying children" shall mean as defined 13 in 26 USC §24(c)(1). 14 (C) "Qualifying child through age seventeen" or "qualifying children 15 through age 17" shall mean as defined in 26 USC §24(c)(1) except that 16 such term shall also include qualifying children who have not attained 17 the age of eighteen. 18 (2) (A) For taxable years beginning on and after the first of January 19 next succeeding the effective date of this subsection, a resident 20 taxpayer shall be allowed a credit equal to: 21 (i) In the first taxable year succeeding the effective date of this 22 subsection, five hundred and fifty dollars per qualifying child; 23 (ii) In the second taxable year succeeding the effective date of this 24 subsection, eight hundred dollars per qualifying child, provided, howev- 25 er, that the dollar amount herein prescribed shall be adjusted for all 26 inflation since two thousand twenty-three; 27 (iii) In the third taxable year succeeding the effective date of this 28 subsection, one thousand dollars per qualifying child, provided, howev- 29 er, that the dollar amount herein prescribed shall be adjusted for all 30 inflation since two thousand twenty-three; 31 (iv) In the fourth taxable year succeeding the effective date of this 32 subsection, one thousand two hundred dollars per qualifying child 33 through age seventeen, provided, however, that the dollar amount herein 34 prescribed shall be adjusted for all inflation since two thousand twen- 35 ty-three; 36 (v) In the fifth taxable year succeeding the effective date of this 37 subsection and each taxable year thereafter, one thousand six hundred 38 dollars per qualifying child through age seventeen, provided, however, 39 that the dollar amount herein prescribed shall be adjusted for all 40 inflation since two thousand twenty-three in the fifth taxable year 41 succeeding the effective date of this subsection and each taxable year 42 thereafter. 43 (B) The amount of the credit shall be reduced, however, by twenty 44 dollars for each one thousand dollars by which the taxpayer's New York 45 state adjusted gross income exceeds: 46 (i) In the first taxable year succeeding the effective date of this 47 subsection, seventy-five thousand dollars in the case of an individual 48 who is not married, one hundred ten thousand dollars in the case of a 49 joint return, or seventy-five thousand dollars in the case of a married 50 individual filing a separate return; 51 (ii) In the second taxable year succeeding the effective date of this 52 subsection, sixty-five thousand dollars in the case of an individual who 53 is not married, one hundred ten thousand dollars in the case of a joint 54 return, or sixty-five thousand dollars in the case of a married individ- 55 ual filing a separate return;S. 277--C 4 1 (iii) In the third taxable year succeeding the effective date of this 2 subsection, fifty-five thousand dollars in the case of an individual who 3 is not married, one hundred ten thousand dollars in the case of a joint 4 return, or fifty-five thousand dollars in the case of a married individ- 5 ual filing a separate return; 6 (iv) In the fourth taxable year succeeding the effective date of this 7 subsection, forty-five thousand dollars in the case of an individual who 8 is not married, ninety thousand dollars in the case of a joint return, 9 or forty-five thousand dollars in the case of a married individual 10 filing a separate return; and 11 (v) In the fifth taxable year succeeding the effective date of this 12 subsection and each taxable year thereafter, twenty-five thousand 13 dollars in the case of an individual who is not married, fifty thousand 14 dollars in the case of a joint return, or twenty-five thousand dollars 15 in the case of a married individual filing a separate return, provided, 16 however, that the dollar amount herein prescribed shall be adjusted 17 for all inflation since two thousand twenty-three in the fifth taxable 18 year succeeding the effective date of this subsection and each taxa- 19 ble year thereafter. 20 (C) Provided further, that the amount of the credit shall never be 21 reduced below one hundred dollars per qualifying child in the second and 22 third taxable years succeeding the effective date of this subsection. In 23 the fourth taxable year succeeding the effective date of this subsection 24 and each taxable year thereafter, the credit shall never be reduced 25 below one hundred dollars per qualifying child through age seventeen. 26 (D) Such resident taxpayer must provide the social security number or 27 individual taxpayer identification number for each qualifying child in 28 order to receive the credit described in this subsection. 29 (3) If the amount of the credit allowed under this subsection for any 30 taxable year shall exceed the taxpayer's tax for such year, the excess 31 shall be treated as an overpayment of tax to be credited or refunded in 32 accordance with the provisions of section six hundred eighty-six of this 33 article, provided, however, that no interest shall be paid thereon. 34 (4) In the case of spouses who file a joint federal return, but who 35 are required to determine their New York taxes separately, the credit 36 allowed pursuant to this subsection may be applied against the tax 37 imposed on either or divided between them as they may elect. 38 (5) Commencing in the fourth taxable year succeeding the effective 39 date of this subsection, the commissioner shall provide for the prepay- 40 ment of the working families credit under this subsection to qualifying 41 taxpayers. Four advanced payments shall be made to such qualifying 42 taxpayers. An estimated annual tax credit shall be determined by the 43 commissioner in advance of the first payment and shall be subject to 44 adjustment due to changes in employment or family status over the course 45 of the year. The first three advanced payments shall be made during the 46 taxable year and shall be twenty percent of the anticipated credit. The 47 fourth advanced payment shall be made after the end of the tax year and 48 shall be adjusted to match the actual credit due. Such payments shall, 49 to the extent practicable, be made available via direct deposit and via 50 electronic benefit transfer (EBT) card. The commissioner shall provide 51 information on the availability of advanced payments of the working 52 families credit to tax preparers, accountants, and organizations that 53 assist individuals in tax preparation. Such information shall be 54 distributed to qualifying taxpayers. If a taxpayer establishes that they 55 are requesting and receiving payments under this paragraph in good faith 56 by establishing that they properly claimed payments under thisS. 277--C 5 1 subsection in the prior year and that they have not experienced a 2 substantial change in circumstances such that they have a reasonable 3 expectation of eligibility in the current year, then they shall not be 4 held responsible for an incorrect prepayment/refund amount. 5 (6) Notwithstanding any provision of law to the contrary, the refunda- 6 ble credit and its payment authorized under this subsection shall be 7 treated in the same manner as the federal Earned Income Tax Credit and 8 shall not be considered as assets, income, or resources to the same 9 extent the credit and its payment would be disregarded pursuant to 26 10 U.S.C. § 6409 and the general welfare doctrine for purposes of determin- 11 ing eligibility for benefits or assistance, or the amount or extent of 12 those benefits or assistance, under any state or local program, includ- 13 ing benefits established under section ninety-five of the social 14 services law. 15 § 4. Section 616 of the tax law, as amended by chapter 28 of the laws 16 of 1987, subsection (b) as amended by chapter 760 of the laws of 1992, 17 is amended to read as follows: 18 § 616. New York exemptions of a resident individual. (a) General. For 19 taxable years beginning after nineteen hundred eighty-seven, a resident 20 individual shall be allowed a New York exemption of one thousand dollars 21 for each exemption for which [he is] they are entitled to a deduction 22 for the taxable year under section one hundred fifty-one(c) of the 23 Internal Revenue Code; and for taxable years beginning in nineteen 24 hundred eighty-seven, a resident individual other than a taxpayer whose 25 federal exemption amount is zero shall be allowed a New York exemption 26 of nine hundred dollars for each exemption for which [he is] they are 27 entitled to a deduction for the taxable year for federal income tax 28 purposes. 29 (b) [Husband and wife] Spouses. If the New York income taxes of [a30husband and wife] spouses are required to be separately determined but 31 their federal income tax is determined on a joint return, each of them 32 shall be separately entitled to the New York exemptions under subsection 33 (a) of this section to which each would be separately entitled for the 34 taxable year if their federal income taxes had been determined on sepa- 35 rate returns. 36 (c) Commencing in the second taxable year succeeding the effective 37 date of subsection (c-2) of section six hundred six of this article, a 38 resident individual shall not be allowed the exemption described in this 39 section for any qualifying child as defined in subparagraph (B) of para- 40 graph one of subsection (c-2) of section six hundred six of this arti- 41 cle. Commencing in the fourth taxable year succeeding the effective 42 date of subsection (c-2) of section six hundred six of this article, a 43 resident individual shall not be allowed the exemption described in this 44 section for any qualifying child through age seventeen as defined in 45 subparagraph (C) of paragraph one of subsection (c-2) of section six 46 hundred six of this article. In all years on or after the effective date 47 of subsection (c-2) of section six hundred six of this article, however, 48 a resident individual shall continue to be allowed the exemption 49 described in this section for other qualifying dependents, as defined in 50 26 USC § 152(a), who do not meet the definition of qualifying child in 51 subparagraph (B) of paragraph one of subsection (c-2) of section six 52 hundred six of this article and qualifying child through age seventeen 53 as defined in subparagraph (C) of paragraph one of subsection (c-2) of 54 section six hundred six of this article. 55 § 5. This act shall take effect immediately.
