NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A666
SPONSOR: Shimsky TITLE OF BILL:
An act to amend the real property tax law and the tax law, in relation
to the definition of income in relation to the enhanced STAR exemption
PURPOSE:
This bill seeks to correct a lapse in the STAR program by treating
Thrift Savings Plans (TSPs) established prior to January 1, 1984, the
same as IRAs and annuities as it pertains to income eligibility under
the state's STAR program. Like IRAs and annuities, TSPs established
prior to January 1, 1984, did not trigger an employer (federal govern-
ment) match.
SUMMARY OF PROVISIONS:
Adds thrift savings plans established prior to January 1, 1984, to
eligible deductions when determining federal adjusted gross income for
the STAR program.
JUSTIFICATION:
Most 401Ks and most modern-day Thrift Savings Accounts (TSPs) are not
eligible to reduce income under the STAR program because those accounts
are often matched by employers. Federal agencies only started matching
employee TSP contributions for those employees hired after January 1,
1984, however. Thus, employees hired prior to that date with TSPs have
contributed 100* of their TSPs and should be treated just like IRAs and
annuities under the STAR program.
LEGISLATIVE HISTORY:
Senate
2017 - S6058A, Passed Senate
2018 - S6058A, Reported and Committed to Rules
2020 - S2313 Reported and Committed to Finance
2022 - 51645, Referred to Finance
Assembly
2017 - 7537B, Referred to Real Property Taxation
2018 - 7537B, Referred to Real Property Taxation
2020 - A7452 Referred to Real Property Taxation
2022 - A2226, Referred to Real Property Taxation
FISCAL IMPLICATIONS:
Minimal to the state.
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
666
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. SHIMSKY -- read once and referred to the Commit-
tee on Real Property Taxation
AN ACT to amend the real property tax law and the tax law, in relation
to the definition of income in relation to the enhanced STAR exemption
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (ii) of paragraph (b) of subdivision 4 of
2 section 425 of the real property tax law, as amended by section 1 of
3 part B of chapter 59 of the laws of 2018, is amended to read as follows:
4 (ii) The term "income" as used herein shall mean the "adjusted gross
5 income" for federal income tax purposes as reported on the applicant's
6 federal or state income tax return for the applicable income tax year,
7 subject to any subsequent amendments or revisions, reduced by distrib-
8 utions, to the extent included in federal adjusted gross income,
9 received from an individual retirement account and an individual retire-
10 ment annuity, and distribution from a thrift savings plan established
11 prior to January first, nineteen hundred eighty-four; provided that if
12 no such return was filed for the applicable income tax year, "income"
13 shall mean the adjusted gross income that would have been so reported if
14 such a return had been filed. Provided further, that effective with
15 exemption applications for final assessment rolls to be completed in two
16 thousand nineteen, where an income-eligibility determination is wholly
17 or partly based upon the income of one or more individuals who did not
18 file a return for the applicable income tax year, then in order for the
19 application to be considered complete, each such individual must file a
20 statement with the department showing the source or sources of [his or
21 her] the individual's income for that income tax year, and the amount or
22 amounts thereof, that would have been reported on such a return if one
23 had been filed. Such statement shall be filed at such time, and in such
24 form and manner, as may be prescribed by the department, and shall be
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00253-01-5
A. 666 2
1 subject to the secrecy provisions of the tax law to the same extent that
2 a personal income tax return would be. The department shall make such
3 forms and instructions available for the filing of such statements. The
4 local assessor shall upon the request of a taxpayer assist such taxpayer
5 in the filing of the statement with the department.
6 § 2. Subparagraph (B) of paragraph 1 of subsection (eee) of section
7 606 of the tax law, as amended by section 10 of part B of chapter 59 of
8 the laws of 2018, is amended to read as follows:
9 (B) "Affiliated income" shall mean for purposes of the basic STAR
10 credit, the combined income of all of the owners of the parcel who
11 resided primarily thereon as of December thirty-first of the taxable
12 year, and of any owners' spouses residing primarily thereon as of such
13 date, and for purposes of the enhanced STAR credit, the combined income
14 of all of the owners of the parcel as of December thirty-first of the
15 taxable year, and of any owners' spouses residing primarily thereon as
16 of such date; provided that for both purposes the income to be so
17 combined shall be the "adjusted gross income" for the taxable year as
18 reported for federal income tax purposes, or that would be reported as
19 adjusted gross income if a federal income tax return were required to be
20 filed, reduced by distributions, to the extent included in federal
21 adjusted gross income, received from an individual retirement account
22 and an individual retirement annuity, and distribution from a thrift
23 savings plan established prior to January first, nineteen hundred eight-
24 y-four. For taxable years beginning on and after January first, two
25 thousand nineteen, where an income-eligibility determination is wholly
26 or partly based upon the income of one or more individuals who did not
27 file a return pursuant to section six hundred fifty-one of this article
28 for the applicable income tax year, then in order to be eligible for the
29 credit authorized by this subsection, each such individual must file a
30 statement with the department showing the source or sources of [his or
31 her] the individiual's income for that income tax year, and the amount
32 or amounts thereof, that would have been reported on such a return if
33 one had been filed. Such statement shall be filed at such time, and in
34 such form and manner, as may be prescribed by the department, and shall
35 be subject to the provisions of section six hundred ninety-seven of this
36 article to the same extent that a return would be. The department shall
37 make such forms and instructions available for the filing of such state-
38 ments. The local assessor shall upon the request of a taxpayer assist
39 such taxpayer in the filing of the statement with the department.
40 Provided further, that if the qualified taxpayer was an owner of the
41 property during the taxable year but did not own it on December thirty-
42 first of the taxable year, then the determination as to whether the
43 income of an individual should be included in "affiliated income" shall
44 be based upon the ownership and/or residency status of that individual
45 as of the first day of the month during which the qualified taxpayer
46 ceased to be an owner of the property, rather than as of December thir-
47 ty-first of the taxable year.
48 § 3. This act shall take effect on the first of January next succeed-
49 ing the date on which it shall have become a law.
