NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A797
SPONSOR: Solages TITLE OF BILL:
An act to amend the tax law, in relation to itemized deductions for
charitable contributions
PURPOSE:
To repeal the state personal income tax deduction for charitable
contributions for filers making over $10 million.
SUMMARY:
Section 1. Amends paragraph 2 of subsection (g) of section 615 of the
tax law, as amended by section 1 of part A of chapter 59 of the laws of
2024.
Section 2. Sets the effective date.
JUSTIFICATION:
The federal government allows taxpayers to make a sizable deduction of
their personal income tax (PIT) liability when they donate to 501(c)(3)
public charities under 26 U.S. Code § 170. Taxpayers who choose to item-
ize their deductions can lower their adjusted gross income by up to 60%
by donating to organizations that operate for religious, charitable,
scientific, literary, or educational purposes or the prevention of
cruelty to animals or children. They can also deduct the fair market
value of any donated goods, such as clothing or household items, and 20
- 50% of their AGI for other non-cash contributions like appreciated
real property,
New York provides a state-level match of this generous federal deduction
under Tax Law Section 615(g), but not for every income level. PIT filers
making more than $1 million can only claim 50% of the federal deduction
on their state returns, for example, while filers making more than $10
million are limited to a 25% match, The FY25 Executive Budget recently
proposed a permanent extension of the 25% cap of the federal deduction,
which otherwise would have expired in 2025, concluding that allowing the
cap to sunset would have cost the state $350 million. This existing 25%
cap on the federal match also underscores the reality that PIT filers at
such a high income threshold do not need much assistance from the state
to incentivize their continued giving.
This bill goes one step further to repeal the match of the federal
deduction entirely for PIT filers making more than $10 million, yielding
an additional $329 million to the state that can then be used for
healthcare, education, climate investments, or other poverty-fighting
tax expenditures which are targeted at low and middle-income filers
rather than the very wealthy. While charitable giving is always lauda-
ble, the existing, incredibly generous federal deduction will likely
mean that this subset of filers will continue to dedicate some portion
of their income towards nonprofits. Furthermore, the fact that the
federal deduction can only be claimed when a taxpayer chooses to itemize
their deductions, rather than claiming the standard deduction, means
that it benefits a mere ten percent of filers.
This bill represents common sense fiscal policy, repealing an unneces-
sary tax break for very wealthy filers while yielding nearly $330
million back to the state's general fund which can be better used to
support the more than ninety percent of PIT filers who do not itemize
their deductions.
SOCIAL JUSTICE IMPACT:
TBD.
LEGISLATIVE HISTORY:
None
FISCAL IMPACT:
A $329 million positive fiscal impact for the state.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
commencing on and after such date.
STATE OF NEW YORK
________________________________________________________________________
797
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. SOLAGES -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to itemized deductions for
charitable contributions
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 2 of subsection (g) of section 615 of the tax
2 law, as amended by section 1 of part A of chapter 59 of the laws of
3 2024, is amended to read as follows:
4 (2) With respect to an individual whose New York adjusted gross income
5 is over ten million dollars, [the New York] no itemized deduction [shall
6 be an amount equal to twenty-five percent of any] for charitable
7 [contribution deduction] contributions allowed under section one hundred
8 seventy of the internal revenue code [for taxable years beginning after
9 two thousand nine and ending before two thousand thirty] shall be
10 allowed.
11 § 2. This act shall take effect immediately and shall apply to taxable
12 years commencing on and after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00339-01-5
