Creates the middle class circuit breaker tax credit allowing a credit against personal income tax, equal to seventy percent of the amount by which the taxpayer's net real property tax or the taxpayer's real property tax equivalent exceeds the taxpayer's maximum real property tax; establishes a tax reform study commission.
STATE OF NEW YORK
________________________________________________________________________
2023
2025-2026 Regular Sessions
IN SENATE
January 15, 2025
___________
Introduced by Sens. KRUEGER, BAILEY, LIU, SALAZAR -- read twice and
ordered printed, and when printed to be committed to the Committee on
Budget and Revenue
AN ACT to amend the tax law, in relation to creating the middle class
circuit breaker tax credit; and creating a tax reform study commission
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 606 of the tax law is amended by adding a new
2 subsection (bbb) to read as follows:
3 (bbb) Middle class circuit breaker credit. (1) Definitions. For the
4 purposes of this subsection:
5 (A) "Qualified taxpayer" means a resident individual of the state who
6 owns or rents the residential real property in which the individual
7 resides, and has resided in such residential real property for not less
8 than five years.
9 (B) "Household" or "members of the household" means a qualified
10 taxpayer or qualified taxpayers and all other persons, not necessarily
11 related, who all reside in the residential real property owned by the
12 taxpayer or taxpayers, and share its furnishings, facilities and accom-
13 modations; provided that no person may be a member of more than one
14 household at one time.
15 (C) "Household gross income" means the aggregate adjusted gross income
16 of all members of the household for the taxable year as reported for
17 federal income tax purposes, or which would be reported as adjusted
18 gross income if a federal income tax return were required to be filed,
19 with the modifications in subsection (b) of section six hundred twelve
20 of this article but without the modifications in subsection (c) of such
21 section, plus any portion of the gain from the sale or exchange of prop-
22 erty otherwise excluded from such amount; earned income from sources
23 without the United States excludable from federal gross income by
24 section nine hundred eleven of the internal revenue code; support money
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04715-01-5
S. 2023 2
1 not included in adjusted gross income; nontaxable strike benefits;
2 supplemental security income payments; the gross amount of any pension
3 or annuity benefits to the extent not included in such adjusted gross
4 income (including, but not limited to, railroad retirement benefits and
5 all payments received under the federal social security act and veter-
6 ans' disability pensions); nontaxable interest received from the state
7 of New York, its agencies, instrumentalities, public corporations, or
8 political subdivisions (including a public corporation created pursuant
9 to agreement or compact with another state or Canada); workers' compen-
10 sation; the gross amount of "loss-of-time" insurance; and the amount of
11 cash public assistance and relief, other than medical assistance for the
12 needy, paid to or for the benefit of the qualified taxpayer or members
13 of the taxpayer's household. Household gross income shall not include
14 surplus foods or other relief in kind or payments made to individuals
15 because of their status as victims of Nazi persecution as defined in
16 public law 103-286 or any disability compensation received by veterans
17 on account of injury or illness incurred or aggravated during military
18 service in the wars in Afghanistan and Iraq since September eleventh,
19 two thousand one. Provided, further, household gross income shall only
20 include all such income received by all members of the household while
21 members of such household.
22 (D) "Adjusted rent" means rent paid for the right of occupancy of a
23 residence.
24 (E) "Real property tax equivalent" means (i) for taxable years begin-
25 ning in two thousand twenty-seven, fifteen percent of the adjusted rent
26 actually paid in the taxable year by a household solely for the right of
27 occupancy of its New York residence for the taxable year. If (I) a resi-
28 dence is rented to two or more individuals as cotenants, or such indi-
29 viduals share in the payment of a single rent for the right of occupancy
30 of such residence, and (II) each of such individuals is a member of a
31 different household, one or more of which individuals shares such resi-
32 dence, real property tax equivalent is that portion of fifteen percent
33 of the adjusted rent paid in the taxable year which reflects that
34 portion of the rent attributable to the qualified taxpayer and the
35 members of the taxpayer's household; and (i) for taxable years beginning
36 in two thousand twenty-seven and thereafter, twenty percent of the
37 adjusted rent actually paid in the taxable year by a household solely
38 for the right of occupancy of its New York residence for the taxable
39 year. If (I) a residence is rented to two or more individuals as coten-
40 ants, or such individuals share in the payment of a single rent for the
41 right of occupancy of such residence, and (II) each of such individuals
42 is a member of a different household, one or more of which individuals
43 shares such residence, real property tax equivalent is that portion of
44 twenty percent of the adjusted rent paid in the taxable year which
45 reflects that portion of the rent attributable to the qualified taxpayer
46 and the members of the taxpayer's household.
47 (F) "Net real property tax" means the real property taxes assessed on
48 the residential real property owned and occupied by the taxpayer or
49 taxpayers after any exemption or abatement received pursuant to the real
50 property tax law.
51 (2) Credit. A qualified taxpayer shall be allowed a credit against the
52 taxes imposed by this article, equal to seventy percent of the amount by
53 which the taxpayer's net real property tax or the taxpayer's real prop-
54 erty tax equivalent exceeds the taxpayer's maximum real property tax, as
55 determined by paragraph three of this subsection. If such credit exceeds
56 the tax for such taxable year, as reduced by the other credits permitted
S. 2023 3
1 by this article, the qualified taxpayer may receive, and the comp-
2 troller, subject to a certificate of the department, shall pay as an
3 overpayment, without interest, any excess between such tax as so reduced
4 and the amount of the credit. If a qualified taxpayer is not required to
5 file a return pursuant to section six hundred fifty-one of this article,
6 a qualified taxpayer may nevertheless receive and the comptroller,
7 subject to a certificate of the department, shall pay as an overpayment
8 the full amount of the credit, without interest.
9 (3) Maximum real property tax. (A) A qualified taxpayer's maximum real
10 property tax shall be determined as follows:
11 (i) For tax years beginning in two thousand twenty-seven:
12 Household gross incomeMaximum real property tax
13 One hundred thousandNine percent of the
14 dollars or lesshousehold gross income
15 More than one hundredNo limitation.
16 thousand dollars
17 (ii) For tax years beginning in two thousand twenty-eight:
18 Household gross incomeMaximum real property tax
19 One hundred thousandEight and one-half percent of the
20 dollars or lesshousehold gross income
21 More than one hundredNo limitation.
22 thousand dollars
23 (iii) For tax years beginning in two thousand twenty-nine:
24 Household gross incomeMaximum real property tax
25 One hundred thousand dollarsSeven and one-half percent of
26 or lesshousehold gross income
27 More than one hundred thousandSeven and one-half percent of
28 dollars, but less than or equal toone hundred thousand dollars
29 one hundred fifty thousand dollarsplus eight and one-half percent of
30 household gross income above
31 one hundred thousand dollars
32 More than one hundred fiftyNo limitation.
33 thousand dollars
34 (iv) For tax years beginning in two thousand thirty and thereafter:
35 Household gross incomeMaximum real property tax
36 One hundred thousandSix percent of household gross
37 dollars or lessincome
38 More than one hundred thousandSix percent of one hundred
39 dollars, but less than or equal tothousand dollars plus seven
40 one hundred fifty thousand dollarspercent of household gross income
41 above one hundred thousand dollars
42 More than one hundred fiftySix percent of one hundred thousand
43 thousand dollars, but less thandollars plus seven
44 or equal to two hundred fiftypercent of fifty thousand dollars
45 thousand dollarsplus eight and one-half percent of
46 household gross income above one
47 hundred fifty thousand dollars
48 More than two hundred fiftyNo limitation.
49 thousand dollars
50 (B) The thresholds of household gross income established by clause
51 (iv) of subparagraph (A) of this paragraph shall be indexed for
52 inflation for tax years beginning in two thousand thirty-one and there-
53 after.
S. 2023 4
1 (4) Exclusions from eligibility. No credit shall be granted under this
2 subsection if the qualified taxpayer claims the real property tax
3 circuit breaker credit, pursuant to subsection (e) of this section,
4 during the taxable year.
5 § 2. There is hereby established a tax reform study commission to
6 provide the governor and the legislature with a long run plan for
7 reforming the state and local tax systems. The tax reform study commis-
8 sion shall consist of five members appointed by the governor, four
9 members each appointed by the speaker of the assembly and the temporary
10 president of the senate, and one member each appointed by the minority
11 leader of the senate and the minority leader of the assembly. In addi-
12 tion, on or before January 1, 2029, the tax reform study commission
13 shall provide the governor and the legislature with recommendations on
14 any changes that should be made in the definitions of income used in the
15 various property tax relief programs authorized by the laws of the state
16 of New York. Such recommendations shall be based on an examination of
17 such laws and of such laws in other states. In preparing such recommen-
18 dations, the tax reform study commission shall review the distributional
19 impact of the items of income included in the definition of household
20 income for purposes of the circuit breaker and other property tax relief
21 programs established by state law and make recommendations to the gover-
22 nor and the legislature for any changes in any of these definitions that
23 the tax reform study commission deems appropriate. The commissioner of
24 taxation and finance and the director of the office of real property
25 services shall provide the tax reform study commission with such data
26 and analysis as it may require.
27 § 3. This act shall take effect immediately.
