NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6013
SPONSOR: Maher TITLE OF BILL:
An act to amend the tax law, in relation to installment payment for the
earned income credit
PURPOSE OR GENERAL IDEA OF THE BILL:
The purpose of this legislation is to require that the earned income tax
credit be paid in monthly installments to avoid binge spending and to
facilitates the development of a regular monthly budget leading to fewer
financial emergencies for the working pbor.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the bill amends section 686 .of the Tax Law by adding a new
subsection (d) to require that earned income tax credits that exceed
$200 be paid in monthly installments of at least $200.
Section 2 of the bill would make the bill effective 120 days after it
becomes law and would empower the commissioner of taxation and finance
to promulgate regulations necessary for its implementation.
JUSTIFICATION:
Under current law, working poor are entitled to an earned income tax
credit (EITC), which is a direct payment from the State of New York
that. supplements their prior income. The EITC is in addition to any tax
refund, and acts in the same manner as a negative income tax that pays.
the working poor more in a. "refund" than they paid in taxes. The EITC
is paid in a lump sum in the same check as any regular tax refund.
Because the EITC is paid in a lump sum, it can encourage binge spending
on nonessential amenities. For example, according to a 2009 consumption
survey by the U.S. Department of Energy, one-third of- those in poverty
have a wide-screen plasma or LCD TV,. one-third have more than one
-vehicle, one in seven have two or more computers, and more than half
have.video game systems.
This bill would require the EITC to be paid in monthly installments,
thus reducing its .use for nonessential big-ticket items, encouraging
responsible monthly budgeting, and making more funds available on a
monthly basis for basic expenses. more responsible budgeting will assist
the working poor in having the financial resources available on a month-
ly basis to meet reoccurring expenses, will reduce the incidence of
financial emergencies, and-will assist in the successful transition to
full independence. The regular tax refund would still be paid in a lump
sum.
PRIOR LEGISLATIVE HISTORY:
A.7486 (2015) referred to ways and means
A.7486 (2016) referred to ways and means
A.7486 (2016) held for-consideration in ways and means
A.4300 (2017) referred to ways and means
A.4300 (2018) referred to ways and means
A.4300(2018) held for consideration in ways and means
A.5574(2020) referred to ways and means
A.5024(2022) held for consideration in ways and means
A.1737(2023) enacting clause stricken
FISCAL IMPLICATIONS:
The bill would result in lower government expenditures for emergency
financial assistance (such as emergency HEAP or other emergency finan-
cial assistance) by increasing the effective monthly income of the work-
ing poor.
EFFECTIVE DATE:
The bill would become effective 120 days after enactment
STATE OF NEW YORK
________________________________________________________________________
6013
2023-2024 Regular Sessions
IN ASSEMBLY
March 30, 2023
___________
Introduced by M. of A. MAHER, GOODELL -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to installment payment for the
earned income credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 686 of the tax law is amended by adding a new
2 subsection (j) to read as follows:
3 (j) Earned income tax credit. An earned income tax credit pursuant to
4 subsection (d) of section six hundred six of this article or an enhanced
5 earned income tax credit pursuant to subsection (d-1) of section six
6 hundred six of this article shall be paid to the taxpayer as follows:
7 (i) for amounts equal to or less than two hundred dollars, the payment
8 or refund shall be made in a lump sum, (ii) for amounts in excess of two
9 hundred dollars and less than two thousand four hundred dollars, the
10 payment or refund shall be two hundred dollars a month for the number of
11 months equal to the total amount thereof divided by two hundred and
12 rounded down to the nearest whole number, and the remaining balance of
13 such payment or refund shall be made in the first month thereafter, and
14 (iii) for amounts equal to or greater than two thousand four hundred
15 dollars, the payment or refund shall be paid in equal monthly payments
16 equal to the total amount thereof divided by twelve.
17 § 2. This act shall take effect on the one hundred twentieth day after
18 it shall have become a law. Effective immediately, the commissioner of
19 taxation and finance is authorized to make any addition, amendment
20 and/or repeal of any rule or regulation necessary for the implementation
21 of this act on its effective date on or before such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06121-01-3
