NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6000
SPONSOR: Simon TITLE OF BILL:
An act to amend the tax law, in relation to providing for the advance
payment of the earned income tax credit
SUMMARY OF PROVISIONS:
Section 1 amends subsection (d) of section 606 of the tax law. The law
is amended to expand the eligibility for the New York Earned Income Tax
Credit and adjusts the phase-out benchmarks for the New York Earned
Income Tax Credit. Eligibility parameters are expanded to include
certain childless adults and those filers without a social security
number who file using an ITIN. Additionally, paragraph (9) is added to
expand the credit to eligible adults over 65 who do not have dependents.
Section 2 adds new section 679 to the tax law. This section provides for
the advance payment of the New York Earned Income Tax Credit.
Section 3 sets the effective date.
JUSTIFICATION:
The Earned Income Tax Credit has consistently proven one of the. most
effective methods by which governments can reward work and alleviate
poverty. This legislation builds on the success of the New York Earned
Income Credit by increasing the value of the credit, expanding who is
eligible to receive the credit, and creating an option for recipients of
the credit to receive payments quarterly.
The EITC is designed to reward work, its value growing with a recipi-
ent's earnings. In the 1990s the EITC was credited as being the single
largest factor encouraging single mothers to return to work, and this
matters for children. Research has shown that lifting the income of
low-income families while a child is leads to better health outcomes,
more educational exposure and higher earnings in adulthood.
This bill recognizes that the COVID-19 Pandemic has pushed many middle-
class families to the brink of financial catastrophe and expands eligi-
bility for the EITC to provide a measure of financial security for those
making more than poverty wages. This bill also expands eligibility for
those who do not have children, those aged 18-24, and those who do not
have a social security number but pay taxes. These measures address
important inadequacies in the federal EITC and will provide a measure of
financial security for a large swatch of low-income New Yorkers.
LEGISLATIVE HISTORY:
2023-24: A5577a Fahy -referred to ways and means
A.2533 2021-22
A.10775 2019-20
EFFECTIVE DATE:
this act shall take effeCt immediately
STATE OF NEW YORK
________________________________________________________________________
6000
2025-2026 Regular Sessions
IN ASSEMBLY
February 25, 2025
___________
Introduced by M. of A. SIMON, HEVESI, STERN, JACKSON, BURDICK, LUNSFORD,
DINOWITZ, LUPARDO, BRONSON, GALLAGHER, GONZALEZ-ROJAS, FORREST, CRUZ,
CLARK, MEEKS, GLICK, RAMOS, MITAYNES, KELLES, RIVERA, SEAWRIGHT,
STIRPE, LEVENBERG, SANTABARBARA, EPSTEIN, REYES -- read once and
referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to providing for the advance
payment of the earned income tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 1 of subsection (d) of section 606 of the tax
2 law, as amended by section 1 of part Q of chapter 63 of the laws of
3 2000, is amended and a new paragraph 9 is added to read as follows:
4 (1) General. A taxpayer shall be allowed a credit as provided herein
5 equal to (i) the applicable percentage of the earned income credit
6 allowed under section thirty-two of the internal revenue code for the
7 same taxable year, (ii) reduced by the credit permitted under subsection
8 (b) of this section. Provided, however, for taxable years beginning in
9 two thousand twenty-seven and thereafter, for the purpose of determining
10 the amount of tax credit under this paragraph, in calculating the earned
11 income tax credit allowed under section thirty-two of the internal
12 revenue code, the phaseout amount as referenced in section 32(b)(2)(A)
13 of the internal revenue code shall be read as twenty-four thousand nine
14 hundred sixty dollars instead of eleven thousand six hundred ten dollars
15 and such phaseout amount shall be subject to adjustments made in section
16 thirty-two of the internal revenue code (the calendar year referenced in
17 the cost of living adjustment in section 32(j)(1)(B) of the internal
18 revenue code shall be applied as calendar year two thousand twenty-five
19 with respect to the phaseout amounts), including an additional phaseout
20 amount for a joint filer and inflation adjustment specified in such
21 section of the internal revenue code for taxable years beginning in two
22 thousand twenty-seven and thereafter.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05624-01-5
A. 6000 2
1 The applicable percentage shall be (i) seven and one-half percent for
2 taxable years beginning in nineteen hundred ninety-four, (ii) ten
3 percent for taxable years beginning in nineteen hundred ninety-five,
4 (iii) twenty percent for taxable years beginning after nineteen hundred
5 ninety-five and before two thousand, (iv) twenty-two and one-half
6 percent for taxable years beginning in two thousand, (v) twenty-five
7 percent for taxable years beginning in two thousand one, (vi) twenty-
8 seven and one-half percent for taxable years beginning in two thousand
9 two, [and] (vii) thirty percent for taxable years beginning in two thou-
10 sand three, (viii) thirty-five percent for taxable years beginning in
11 two thousand twenty-seven, and (ix) forty percent for taxable years
12 beginning in two thousand twenty-eight and thereafter. For taxable
13 years beginning in two thousand twenty-seven and thereafter, in the case
14 of an eligible individual with no qualifying children, the credit
15 percentage shall be fifteen and three-tenths to determine the amount of
16 the earned income tax credit referenced in section 32(b)(1) of the
17 internal revenue code and the earned income amount and the phaseout
18 amount of such individual shall be determined as if such earned income
19 amount and phaseout amount as referenced in section 32(b)(2)(A) of the
20 internal revenue code are equal to the amount allowed for an eligible
21 individual with one qualifying child as such amounts are referenced in
22 such paragraph. Provided further, for the purpose of this subsection, an
23 eligible individual shall be an individual who has attained nineteen
24 years of age as opposed to twenty-five years of age, irrespective of the
25 eligibility referenced in section 32(c)(1)(A)(ii)(II) of the internal
26 revenue code. Furthermore, an individual otherwise eligible but for the
27 requirement under section 32(m) of the internal revenue code shall be
28 eligible for this credit. Provided, however, that if the reversion
29 event, as defined in this paragraph, occurs, the applicable percentage
30 shall be twenty percent for taxable years ending on or after the date on
31 which the reversion event occurred. The reversion event shall be deemed
32 to have occurred on the date on which federal action, including but not
33 limited to, administrative, statutory or regulatory changes, materially
34 reduces or eliminates New York state's allocation of the federal tempo-
35 rary assistance for needy families block grant, or materially reduces
36 the ability of the state to spend federal temporary assistance for needy
37 families block grant funds for the earned income credit or to apply
38 state general fund spending on the earned income credit toward the
39 temporary assistance for needy families block grant maintenance of
40 effort requirement, and the commissioner of the office of temporary and
41 disability assistance shall certify the date of such event to the
42 commissioner of taxation and finance, the director of the division of
43 the budget, the speaker of the assembly and the temporary president of
44 the senate.
45 (9) Individuals over age sixty-five. Notwithstanding the provisions of
46 section 32(c)(1)(A)(ii)(III) of the internal revenue code, an individual
47 who is otherwise eligible to receive the earned income credit under this
48 subsection shall not be deemed ineligible due solely to the fact that
49 such individual has attained the age of sixty-five.
50 § 2. The tax law is amended by adding a new section 679 to read as
51 follows:
52 § 679. Advance payment of earned income credit. (a) General rule.
53 Except as otherwise provided in this chapter, the commissioner shall
54 provide for the prepayment of the earned income credit to qualifying
55 employees.
A. 6000 3
1 (b) Earned income eligibility certificate. For purposes of this arti-
2 cle, an earned income eligibility certificate is a statement furnished
3 by an employee to the commissioner which:
4 (1) certifies that the employee will be eligible to receive an earned
5 income credit or an enhanced earned income credit provided pursuant to
6 subsection (d) or (d-1) of section six hundred six of this article for
7 the taxable year;
8 (2) certifies that the employee does not have an earned income eligi-
9 bility certificate in effect for the taxable year with respect to the
10 payment of wages by another employer; and
11 (3) states whether the employee's spouse has an earned income eligi-
12 bility certificate in effect. For purposes of this section, a certif-
13 icate shall be treated as being in effect with respect to a spouse if
14 such certificate will be in effect on the first status determination
15 date following the date on which the other eligible spouse furnishes the
16 statement in question.
17 (c) Earned income advance amount. Four advanced payments shall be made
18 to such qualifying employees. An estimated annual tax credit shall be
19 determined by the commissioner in advance of the first payment and shall
20 be subject to adjustment due to changes in employment or family status
21 over the course of the year. Prior to disbursement, the commissioner
22 shall ensure that the qualifying employee's status has not changed. The
23 first three advanced payments shall be made during the taxable year and
24 shall be twenty percent of the anticipated credit. The fourth advanced
25 payment shall be made after the tax year is over and shall be adjusted
26 to match the actual credit due eligible. Such payments shall, to the
27 extent practicable, be made available via direct deposit and via elec-
28 tronic benefit transfer (EBT) card.
29 (d) Form and contents of certificate. Earned income eligibility
30 certificates shall be in such form and contain such information as the
31 commissioner may determine and prescribe.
32 (e) Notification. (1) The commissioner shall notify all taxpayers who
33 have received a refund of the credit pursuant to subsection (d) or (d-1)
34 of section six hundred six of this article based on the most recent tax
35 return or record in writing of the availability of earned income advance
36 amounts under this section. Such written or electronic notification
37 shall include a clearly labeled section or withholding forms and a sepa-
38 rate handout with information about the advanced payment of the earned
39 income credit in the six most common languages spoken by individuals in
40 this state.
41 (2) The commissioner shall provide information on the availability of
42 earned income advance amounts under this section to tax preparers,
43 accountants and organizations that assist individuals in tax prepara-
44 tion. Such information shall be distributed to qualifying individuals.
45 (f) Coordination with advance payments of earned income credit. (1) If
46 any payment is made to the individual by the department under this
47 section during any calendar year, the tax imposed by this chapter for
48 the individual's last taxable year beginning in such calendar year shall
49 be increased by the aggregate amount of such payments.
50 (2) If an individual establishes that they are requesting and receiv-
51 ing payments under this section in good faith by establishing that they
52 properly claimed payments under this section in the prior year and that
53 they have has not experienced a substantial change in circumstances such
54 that they have a reasonable expectation of eligibility in the current
55 year, then paragraph one of this subsection shall not apply.
A. 6000 4
1 (3) Any increase in tax under this subsection shall not be treated as
2 tax imposed by this chapter for purposes of determining the amount of
3 any credit, other than the credit allowed by subsection (d) or (d-1) of
4 section six hundred six of this article, allowable under this article.
5 § 3. This act shall take effect immediately and shall apply to taxable
6 years beginning on or after January 1, 2027.
