Assembly Member Michael DenDekker (D/WFP-Jackson Heights) announced that the New York State Assembly had approved a package of revisions to the New York State tax code that will provide working families with tax cuts, as well as spur job creation in New York State. The package will also increase the tax rate on the state’s high-income earners, but take less than it has in the past.
“For too long, New York State’s tax system was inequitable and inefficient,” Assembly Member DenDekker said. “It placed an undue and unaffordable burden on our working families, while allowing high-earners to avoid paying their fair share of taxes. Under this plan, working families will be given tax cuts, and there are additional provisions to spur job creation, assist small businesses, and help educational facilities.”
Effective January 1, 2012, New York State personal income tax rates for married taxpayers with taxable incomes between $40,000 and $150,000 per year would be decreased from 6.85% to 6.45%. Single taxpayers earning between $20,000 and $75,000 per year will see their tax rate reduced from 6.85% to 6.45%. Those married taxpayers with incomes between $150,000 and $300,000 will see their tax rates decline from 6.85% to 6.65%, while single taxpayers earning $75,001 to $200,000 per year will see their tax rate drop from 6.85% to 6.65%. Married taxpayers with taxable incomes in excess of $2 million per year will see their 2012 tax rates increase from 6.85% to 8.82%. In 2011, the tax rate for high-income earners stood at 8.97%. Furthermore, brackets and exemption levels would be adjusted annually to protect taxpayers from inflationary effects on their tax liabilities. These provisions will be applicable in 2012, 2013, and 2014.
In order to assist small business with job growth, the proposal provides for tax relief from the MTA payroll tax. Small businesses – those with annual payrolls of less than $1.25 million – would now be completely exempt from the MTA payroll tax. Those businesses with payrolls of $1.25 million would see their rate drop from 0.34% to 0.11%, while companies with payrolls between $1.5 million and $1.75 million would see their rates decline from 0.34% to 0.23%. The elimination of the MTA payroll tax will provide an immediate and significant benefit to New York State’s educational system. As of January 1, 2012, the MTA payroll tax will be lifted from all public elementary and secondary schools, private elementary and secondary schools, 853 schools, 4201 schools (such as the Lexington School for the Deaf in Queens), special act schools, all charter schools, and all BOCES facilities.
Moreover, the tax and job growth package provides another tax credit where it is most needed, namely that of employing disadvantaged youth. A total of $25 million in refundable tax credits would be available to businesses that hire at risk or disadvantaged youths equal to $250 per month for part-time work, or $500 per month for full-time work for six months. An additional $500 would be available if a part-time employee is employed for an additional six months.
“It’s always a good day when New York State can give something more back to its residents,” Assembly Member DenDekker concluded. “This historic tax revision package has something for everyone - in particular our schools – and I hope that it will alleviate some of the taxation and budgetary concerns that all of us have as New Yorkers.”