Increases the real property tax circuit breaker credit income limits to $100,000; removes real property tax rebates from real property taxes that qualify under such credit.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7652
SPONSOR: Stern TITLE OF BILL:
An act to amend the tax law, in relation to the real property tax
circuit breaker credit
PURPOSE OR GENERAL IDEA OF BILL::
To amend Section 606 (e) of the Tax Law to increase income, rent and
home value criteria for purposes of qualifying for the Claim for Real
Property Tax Credit for Homeowner and Renters (IT-214) also known as
"Circuit Breaker."
SUMMARY OF PROVISIONS::
Section 1: amends subparagraph (E) of paragraph 1 and paragraphs 3 and 7
of the subsection (e) of section 606 of the tax law, as amended by chap-
ter 28 of the laws of 1987 and subparagraph (E) of paragraph 1 as
amended by chapter 105 of the laws of 2006.
Section 2: sets the effective date.
JUSTIFICATION:
In 1978, the Legislature enacted the refundable Claim for Real Property
Tax Credit for Homeowners and Renters, also known as "Circuit Breaker,"
to help senior citizens and households with moderate incomes cope with
increasingly high property tax costs be it on their homes or incorpo-
rated in one's rent. Unfortunately, the qualifying criteria for this
credit have not been adjusted in 40 years. As a result, numerous house-
holds have been denied the credit because income, taxes and rents have
far surpassed the value of the limits set in 1978.
Although there are still some taxpayers who qualify for the current
credit, statistics compiled by the Department of. Taxation and Finance
indicate that the number of households eligible for the credit has
dropped significantly. In 1996, 517,116 refundable credits were issued.
In 2010, the number of credits had dropped to 209,691 and in 2017, the
number fell to 172,031.
Thousands of homeowners and renters across the state were no longer able
to take advantage of the Claim for Real Property Tax Credit for Homeown-
ers and Renters (IT-214) because of the $18,000 income cap, $425 rent
cap, $85,000 home value cap and a maximum refund of $375 for persons 65
years of age and older and $75 for persons under 65.
Meanwhile, the New York City Enhanced Real Property Tax Credit (Section
606(e-1) of the Tax Law) was established in 2013 with an income thresh-
old of $200,000, no rental or home value cap and a maximum credit of
$500.
The IT-214 or "Circuit Breaker" credit was intended to ease the property
tax burden on homeowners and renters. This bill continues that legisla-
tive intent, maintains the original sliding scale credit formula for
seniors and non-seniors and upgrades the eligibility criteria to reflect
current market rates for housing and rental units. The gross household
income would increase from $18,000 to $100,000; the market value of a
home would increase from $85,000 to $150,000; and the maximum rent would
increase from $425 to $1,000. The amount of the credit would remain the
same with the maximum credit for those 65 years of age or older set at
$375 and the maximum credit for non-seniors set at $75. Enhancing the
IT-214 or "Circuit Breaker" credit so that it is available to more
households comes at a time when housing costs continue to rise. In June
2019, the State Comptroller released a report, "Housing Affordability in
New York State," and noted the following:
"In 2017, almost half of New York State's rental households and more
than one in four homeowners faced housing costs above the affordability
threshold of 30 percent of household income. On the national level, New
York had among the highest percentages of homeowners and renters above
the affordability and severe housing cost burden thresholds. New York's
rankings among all states for these housing affordability metrics dete-
riorated for renters and homeowners alike from 2008 to 2017."
PRIOR LEGISLATIVE HISTORY::
2023-2024: A3442 - referred to ways and means
2021-2022: A6516 - referred to ways and means
2019-2020: A8333 - referred to ways and means
FISCAL IMPLICATIONS::
To be determined.
EFFECTIVE DATE::
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7652
2025-2026 Regular Sessions
IN ASSEMBLY
April 4, 2025
___________
Introduced by M. of A. STERN -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to the real property tax
circuit breaker credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (E) of paragraph 1 and paragraphs 3 and 7 of
2 subsection (e) of section 606 of the tax law, as amended by chapter 28
3 of the laws of 1987 and subparagraph (E) of paragraph 1 as amended by
4 chapter 105 of the laws of 2006, are amended to read as follows:
5 (E) "Qualifying real property taxes" means all real property taxes,
6 special ad valorem levies and special assessments, exclusive of penal-
7 ties and interest, levied on the residence of a qualified taxpayer and
8 paid during the taxable year less the credit claimed under the former
9 subsection (n-1) of this section. [In addition, for taxable years begin-
10 ning after December thirty-first, nineteen hundred eighty-four, a quali-
11 fied taxpayer may elect to include any additional amount that would have
12 been levied in the absence of an exemption from real property taxation
13 pursuant to section four hundred sixty-seven of the real property tax
14 law.] If tenant-stockholders in a cooperative housing corporation have
15 met the requirements of section two hundred sixteen of the internal
16 revenue code by which they are allowed a deduction for real estate
17 taxes, the amount of taxes so allowable, or which would be allowable if
18 the taxpayer had filed returns on a cash basis, shall be qualifying real
19 property taxes. If a residence is owned by two or more individuals as
20 joint tenants or tenants in common, and one or more than one individual
21 is not a member of the household, qualifying real property taxes is that
22 part of such taxes on the residence which reflects the ownership
23 percentage of the qualified taxpayer and members of [his] their house-
24 hold. If a residence is an integral part of a larger unit, qualifying
25 real property taxes shall be limited to that amount of such taxes paid
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02533-01-5
A. 7652 2
1 as may be reasonably apportioned to such residence. If a household owns
2 and occupies two or more residences during different periods in the same
3 taxable year, qualifying real property taxes shall be the sum of the
4 prorated qualifying real property taxes attributable to the household
5 during the periods such household occupies each of such residences. If
6 the household owns and occupies a residence for part of the taxable year
7 and rents a residence for part of the same taxable year, it may include
8 both the proration of qualifying real property taxes on the residence
9 owned and the real property tax equivalent with respect to the months
10 the residence is rented. Provided, however, for purposes of the credit
11 allowed under this subsection, qualifying real property taxes may be
12 included by a qualified taxpayer only to the extent that such taxpayer
13 or the spouse of such taxpayer occupying such residence for six months
14 or more of the taxable year owns or has owned the residence and paid
15 such taxes. Provided further, however, qualifying real property taxes
16 shall not include any portion of a real property tax paid that was
17 subsequently returned to the taxpayer by a tax credit or any other real
18 property tax rebate including, but not limited to, the school tax relief
19 credit under subsection (eee) of this section.
20 (3) Determination of credit. (A) For qualified taxpayers who have
21 attained the age of sixty-five years before the beginning of or during
22 the taxable year the amount of the credit allowable under this
23 subsection shall be fifty percent, or in the case of a qualified taxpay-
24 er who has elected to include an additional amount pursuant to subpara-
25 graph (E) of paragraph one of this subsection, twenty-five percent, of
26 the excess of real property taxes or the excess of real property tax
27 equivalent determined as follows:
28 Excess real property taxes are the
29 excess of real property tax equiv-
30 alent or the excess of qualifying
31 real property taxes over the fo-
32 If household gross income for the llowing percentage of household
33 taxable year is: gross income:
34 ----------------------------------- -----------------------------------
35 [$3,000] $20,000 or less 3 1/2
36 Over [$3,000] $20,000 but not over 4
37 [$5,000] $30,000
38 Over [$5,000] $30,000 but not over 4 1/2
39 [$7,000] $45,000
40 Over [$7,000] $45,000 but not over 5
41 [$9,000] $65,000
42 Over [$9,000] $65,000 but not over 5 1/2
43 [$11,000] $75,000
44 Over [$11,000] $75,000 but not over 6
45 [$14,000] $85,000
46 Over [$14,000] $85,000 but not over 6 1/2
47 [$18,000] $100,000
48 Notwithstanding the foregoing provisions, the maximum credit deter-
49 mined under this subparagraph may not exceed the amount determined in
50 accordance with the following table:
51 If household gross income for the
52 taxable year is: The maximum credit is:
53 ----------------------------------- -----------------------------------
A. 7652 3
1 [$1,000] $5,000 or less $375
2 Over [$1,000] $5,000 but not over $358
3 [$2,000] $10,000
4 Over [$2,000] $10,000 but not over $341
5 [$3,000] $15,000
6 Over [$3,000] $15,000 but not over $324
7 [$4,000] $20,000
8 Over [$4,000] $20,000 but not over $307
9 [$5,000] $25,000
10 Over [$5,000] $25,000 but not over $290
11 [$6,000] $30,000
12 Over [$6,000] $30,000 but not over $273
13 [$7,000] $35,000
14 Over [$7,000] $35,000 but not over $256
15 [$8,000] $40,000
16 Over [$8,000] $40,000 but not over $239
17 [$9,000] $45,000
18 Over [$9,000] $45,000 but not over $222
19 [$10,000] $50,000
20 Over [$10,000] $50,000 but not over $205
21 [$11,000] $55,000
22 Over [$11,000] $55,000 but not over $188
23 [$12,000] $60,000
24 Over [$12,000] $60,000 but not over $171
25 [$13,000] $65,000
26 Over [$13,000] $65,000 but not over $154
27 [$14,000] $70,000
28 Over [$14,000] $70,000 but not over $137
29 [$15,000] $75,000
30 Over [$15,000] $75,000 but not over $120
31 [$16,000] $80,000
32 Over [$16,000] $80,000 but not over $103
33 [$17,000] $86,000
34 Over [$17,000] $86,000 but not over $ 86
35 [$18,000] $100,000
36 (B) For all other qualified taxpayers the amount of the credit allow-
37 able under this subsection shall be fifty percent of excess real proper-
38 ty taxes or the excess of the real property tax equivalent determined as
39 follows:
40 Excess real property taxes are the
41 excess of real property tax equiv-
42 alent or the excess of qualifying
43 real property taxes over the
44 If household gross income for the following percentage of household
45 taxable year is: gross income:
46 ----------------------------------- -----------------------------------
47 [$3,000] $20,000 or less 3 1/2
48 Over [$3,000] $20,000 but not over 4
49 [$5,000] $30,000
50 Over [$5,000] $30,000 but not over 4 1/2
51 [$7,000] $45,000
52 Over [$7,000] $45,000 but not over 5
53 [$9,000] $65,000
A. 7652 4
1 Over [$9,000] $65,000 but not over 5 1/2
2 [$11,000] $75,000
3 Over [$11,000] $75,000 but not over 6
4 [$14,000] $85,000
5 Over [$14,000] $85,000 but not over 6 1/2
6 [$18,000] $100,000
7 Notwithstanding the foregoing provisions, the maximum credit deter-
8 mined under this subparagraph may not exceed the amount determined in
9 accordance with the following table:
10 If household gross income for the
11 taxable year is: The maximum credit is:
12 ----------------------------------- -----------------------------------
13 [$1,000] $5,000 or less $75
14 Over [$1,000] $5,000 but not over $73
15 [$2,000] $10,000
16 Over [$2,000] $10,000 but not over $71
17 [$3,000] $15,000
18 Over [$3,000] $15,000 but not over $69
19 [$4,000] $20,000
20 Over [$4,000] $20,000 but not over $67
21 [$5,000] $25,000
22 Over [$5,000] $25,000 but not over $65
23 [$6,000] $30,000
24 Over [$6,000] $30,000 but not over $63
25 [$7,000] $35,000
26 Over [$7,000] $35,000 but not over $61
27 [$8,000] $40,000
28 Over [$8,000] $40,000 but not over $59
29 [$9,000] $45,000
30 Over [$9,000] $45,000 but not over $57
31 [$10,000] $50,000
32 Over [$10,000] $50,000 but not over $55
33 [$11,000] $55,000
34 Over [$11,000] $55,000 but not over $53
35 [$12,000] $60,000
36 Over [$12,000] $60,000 but not over $51
37 [$13,000] $65,000
38 Over [$13,000] $65,000 but not over $49
39 [$14,000] $70,000
40 Over [$14,000] $70,000 but not over $47
41 [$15,000] $75,000
42 Over [$15,000] $75,000 but not over $45
43 [$16,000] $80,000
44 Over [$16,000] $80,000 but not over
45 [$17,000] $86,000 $43
46 Over [$17,000] $86,000 but not over $41
47 [$18,000] $100,000
48 (7) No credit shall be granted under this subsection:
49 (A) If household gross income for the taxable year exceeds [eighteen]
50 one hundred thousand dollars.
51 (B) To a property owner unless: (i) the property is used for residen-
52 tial purposes, (ii) not more than twenty percent of the rental income,
53 if any, from the property is from rental for nonresidential purposes and
A. 7652 5
1 (iii) the property is occupied as a residence in whole or in part by one
2 or more of the owners of the property.
3 (C) To a property owner who owns real property, the full value of
4 which exceeds [eighty-five] one hundred fifty thousand dollars.
5 (D) To a tenant if the adjusted rent for the residence exceeds [four
6 hundred fifty] one thousand dollars per month on average.
7 (E) To an individual with respect to whom a deduction under subsection
8 (c) of section one hundred fifty-one of the internal revenue code is
9 allowable to another taxpayer for the taxable year.
10 (F) With respect to a residence that is wholly exempted from real
11 property taxation.
12 (G) To an individual who is not a resident individual of the state for
13 the entire taxable year.
14 § 2. This act shall take effect immediately.
