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A04022 Summary:

BILL NOA04022C
 
SAME ASSAME AS S00277-C
 
SPONSORHevesi
 
COSPNSRKelles, Cunningham, Burdick, Aubry, Shimsky, Sillitti, Colton, Raga, Walker, Forrest, Bores, Davila, Simon, Otis, Reyes, Cruz, Seawright, Carroll, Shrestha, Kim, Bichotte Hermelyn, Epstein, Tapia, Lunsford, Gonzalez-Rojas, Brown K, Alvarez, O'Donnell, Taylor, De Los Santos, Darling, Simone, Ardila, Rosenthal L, Bendett, Levenberg, Gallahan, Mamdani, Septimo, Mitaynes, Steck, Benedetto, Rozic, Gibbs, Jacobson
 
MLTSPNSR
 
Amd §§606 & 616, Tax L
 
Provides for a working families tax credit; directs quarterly prepayment of the credit; provides for a sliding reduction in the credit for incomes which exceed a certain threshold.
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A04022 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         4022--C
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 9, 2023
                                       ___________
 
        Introduced by M. of A. HEVESI, KELLES, CUNNINGHAM, BURDICK, AUBRY, SHIM-
          SKY,  SILLITTI,  COLTON,  RAGA, WALKER, FORREST, BORES, DAVILA, SIMON,
          OTIS, REYES, CRUZ, SEAWRIGHT, CARROLL, SHRESTHA, KIM,  BICHOTTE HERME-
          LYN,  EPSTEIN,  TAPIA,  LUNSFORD,  GONZALEZ-ROJAS,  K. BROWN, ALVAREZ,
          O'DONNELL, TAYLOR, DE LOS SANTOS, DARLING, SIMONE,  ARDILA,  L. ROSEN-
          THAL, BENDETT, LEVENBERG, GALLAHAN, MAMDANI, SEPTIMO, MITAYNES, STECK,
          BENEDETTO,  ROZIC,  GIBBS,  JACOBSON  -- read once and referred to the
          Committee on Ways and Means --  committee  discharged,  bill  amended,
          ordered  reprinted  as  amended  and  recommitted to said committee --
          recommitted to the Committee on Ways  and  Means  in  accordance  with
          Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
          reprinted  as  amended  and  recommitted  to  said  committee -- again
          reported from said committee with  amendments,  ordered  reprinted  as
          amended and recommitted to said committee
 
        AN  ACT  to  amend  the tax law, in relation to a New York state working
          families tax credit
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1. Subsection (d) of section 606 of the tax law is amended by
     2  adding a new paragraph 9 to read as follows:
     3    (9) Commencing in the taxable year next succeeding the effective  date
     4  of  subsection  (c-2)  of  this  section,  the  earned income credit for
     5  taxpayers with qualifying children through age seventeen, as defined  in
     6  paragraph one of subsection (c-2) of this section, shall be reduced over
     7  the course of four years as follows:
     8    (A)  In  the  first  taxable  year  succeeding  the  effective date of
     9  subsection (c-2) of this  section,  the  applicable  percentage  of  the
    10  earned  income  credit  allowed under section thirty-two of the internal
    11  revenue code for the same taxable year, as described in paragraph one of
    12  this subsection, shall be reduced to twenty-five;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD02008-15-4

        A. 4022--C                          2
 
     1    (B) In the second  taxable  year  succeeding  the  effective  date  of
     2  subsection  (c-2)  of  this  section,  the  applicable percentage of the
     3  earned income credit allowed under section thirty-two  of  the  internal
     4  revenue code for the same taxable year, as described in paragraph one of
     5  this subsection, shall be reduced to twenty;
     6    (C)  In  the  third  taxable  year  succeeding  the  effective date of
     7  subsection (c-2) of this  section,  the  applicable  percentage  of  the
     8  earned  income  credit  allowed under section thirty-two of the internal
     9  revenue code for the same taxable year, as described in paragraph one of
    10  this subsection, shall be reduced to fifteen;
    11    (D) In the fourth  taxable  year  succeeding  the  effective  date  of
    12  subsection  (c-2)  of  this  section,  the  applicable percentage of the
    13  earned income credit allowed under section thirty-two  of  the  internal
    14  revenue code for the same taxable year, as described in paragraph one of
    15  this subsection, shall be reduced to ten.
    16    (E)  In  the  fifth  taxable  year  succeeding  the  effective date of
    17  subsection (c-2) of this section and each taxable year  thereafter,  the
    18  applicable  percentage  of  the  earned  income tax credit allowed under
    19  section thirty-two of the internal revenue code  for  the  same  taxable
    20  year, as described in paragraph one of this subsection, shall be reduced
    21  to zero.
    22    Taxpayers  with  both  qualifying  children  through  age seventeen as
    23  defined in paragraph one of subsection (c-2) of this section and another
    24  qualifying child, as defined in 26  USC  §152(c),  and/or  a  qualifying
    25  relative,  as  defined  in  26  USC §152(d), shall not be subject to the
    26  reduction of the earned income tax credit provided in subparagraphs  (A)
    27  through  (D)  of  this  paragraph and shall continue to receive the full
    28  applicable percentage of the earned income credit allowed under  section
    29  thirty-two  of  the  internal revenue code for the same taxable year, as
    30  described in paragraph one of this subsection, until the  fifth  taxable
    31  year  succeeding  the effective date of subsection (c-2) of this section
    32  and each taxable year thereafter, at which  point  such  taxpayer  shall
    33  receive  such full applicable percentage only for a qualifying child, as
    34  defined in 26 USC §152(c), and/or qualifying relative, as defined in  26
    35  USC  §152(d),  who  does  not  meet  the  definition of qualifying child
    36  through age seventeen in paragraph  one  of  subsection  (c-2)  of  this
    37  section.
    38    § 2. Paragraph 1 of subsection (c-1) of section 606 of the tax law, as
    39  amended  by  section  1 of part HH of chapter 56 of the laws of 2023, is
    40  amended to read as follows:
    41    (1) [A] For taxable years prior to the first of January next  succeed-
    42  ing  the  effective date of subsection (c-2) of this section, a resident
    43  taxpayer shall be allowed a credit  as  provided  herein  equal  to  the
    44  greater  of  one hundred dollars times the number of qualifying children
    45  of the taxpayer or the applicable percentage of  the  child  tax  credit
    46  allowed  the  taxpayer under section twenty-four of the internal revenue
    47  code for the same taxable year  for  each  qualifying  child.  Provided,
    48  however,  in  the case of a taxpayer whose federal adjusted gross income
    49  exceeds the applicable threshold amount set forth by section 24(b)(2) of
    50  the Internal Revenue Code, the credit shall only be equal to the  appli-
    51  cable  percentage  of  the  child  tax credit allowed the taxpayer under
    52  section 24 of the Internal Revenue Code for each qualifying  child.  For
    53  the purposes of this subsection, a qualifying child shall be a child who
    54  meets  the  definition  of  qualified  child  under section 24(c) of the
    55  internal revenue code. The applicable percentage shall  be  thirty-three
    56  percent. For purposes of this subsection, any reference to section 24 of

        A. 4022--C                          3
 
     1  the  Internal  Revenue  Code  shall be a reference to such section as it
     2  existed immediately prior to the enactment of Public Law 115-97.
     3    §  3. Section 606 of the tax law is amended by adding a new subsection
     4  (c-2) to read as follows:
     5    (c-2) New York state working families  tax  credit.  (1)  Definitions.
     6  (A)  "Adjusted  for all inflation since two thousand twenty-three" shall
     7  mean the commissioner  increases  the  dollar  amount  of  a  credit  or
     8  adjusted  gross  income, as applicable, by an amount equal to the sum of
     9  all cost-of-living adjustments calculated and published by the  internal
    10  revenue  service  pursuant  to  26  USC §1(f)(3) since calendar year two
    11  thousand twenty-three.
    12    (B) "Qualifying child" or "qualifying children" shall mean as  defined
    13  in 26 USC §24(c)(1).
    14    (C)  "Qualifying  child through age seventeen" or "qualifying children
    15  through age 17" shall mean as defined in 26 USC  §24(c)(1)  except  that
    16  such  term  shall also include qualifying children who have not attained
    17  the age of eighteen.
    18    (2) (A) For taxable years beginning on and after the first of  January
    19  next  succeeding  the  effective  date  of  this  subsection, a resident
    20  taxpayer shall be allowed a credit equal to:
    21    (i) In the first taxable year succeeding the effective  date  of  this
    22  subsection, five hundred and fifty dollars per qualifying child;
    23    (ii)  In the second taxable year succeeding the effective date of this
    24  subsection, eight hundred dollars per qualifying child, provided, howev-
    25  er, that the dollar amount herein prescribed shall be adjusted  for  all
    26  inflation since two thousand twenty-three;
    27    (iii)  In the third taxable year succeeding the effective date of this
    28  subsection, one thousand dollars per qualifying child, provided,  howev-
    29  er,  that  the dollar amount herein prescribed shall be adjusted for all
    30  inflation since two thousand twenty-three;
    31    (iv) In the fourth taxable year succeeding the effective date of  this
    32  subsection,  one  thousand  two  hundred  dollars  per  qualifying child
    33  through age seventeen, provided, however, that the dollar amount  herein
    34  prescribed  shall be adjusted for all inflation since two thousand twen-
    35  ty-three;
    36    (v) In the fifth taxable year succeeding the effective  date  of  this
    37  subsection  and  each  taxable year thereafter, one thousand six hundred
    38  dollars per qualifying child through age seventeen,  provided,  however,
    39  that  the  dollar  amount  herein  prescribed  shall be adjusted for all
    40  inflation since two thousand twenty-three  in  the  fifth  taxable  year
    41  succeeding  the  effective date of this subsection and each taxable year
    42  thereafter.
    43    (B) The amount of the credit shall  be  reduced,  however,  by  twenty
    44  dollars  for  each one thousand dollars by which the taxpayer's New York
    45  state adjusted gross income exceeds:
    46    (i) In the first taxable year succeeding the effective  date  of  this
    47  subsection,  seventy-five  thousand dollars in the case of an individual
    48  who is not married, one hundred ten thousand dollars in the  case  of  a
    49  joint  return, or seventy-five thousand dollars in the case of a married
    50  individual filing a separate return;
    51    (ii) In the second taxable year succeeding the effective date of  this
    52  subsection, sixty-five thousand dollars in the case of an individual who
    53  is  not married, one hundred ten thousand dollars in the case of a joint
    54  return, or sixty-five thousand dollars in the case of a married individ-
    55  ual filing a separate return;

        A. 4022--C                          4
 
     1    (iii) In the third taxable year succeeding the effective date of  this
     2  subsection, fifty-five thousand dollars in the case of an individual who
     3  is  not married, one hundred ten thousand dollars in the case of a joint
     4  return, or fifty-five thousand dollars in the case of a married individ-
     5  ual filing a separate return;
     6    (iv)  In the fourth taxable year succeeding the effective date of this
     7  subsection, forty-five thousand dollars in the case of an individual who
     8  is not married, ninety thousand dollars in the case of a  joint  return,
     9  or  forty-five  thousand  dollars  in  the  case of a married individual
    10  filing a separate return; and
    11    (v) In the fifth taxable year succeeding the effective  date  of  this
    12  subsection  and  each  taxable  year  thereafter,  twenty-five  thousand
    13  dollars in the case of an individual who is not married, fifty  thousand
    14  dollars  in  the case of a joint return, or twenty-five thousand dollars
    15  in the case of a married individual filing a separate return,  provided,
    16  however, that  the  dollar  amount  herein  prescribed shall be adjusted
    17  for  all  inflation since two thousand twenty-three in the fifth taxable
    18  year succeeding the  effective  date  of this subsection and each  taxa-
    19  ble year thereafter.
    20    (C)  Provided  further,  that  the amount of the credit shall never be
    21  reduced below one hundred dollars per qualifying child in the second and
    22  third taxable years succeeding the effective date of this subsection. In
    23  the fourth taxable year succeeding the effective date of this subsection
    24  and each taxable year thereafter, the  credit  shall  never  be  reduced
    25  below one hundred dollars per qualifying child through age seventeen.
    26    (D)  Such resident taxpayer must provide the social security number or
    27  individual taxpayer identification number for each qualifying  child  in
    28  order to receive the credit described in this subsection.
    29    (3)  If the amount of the credit allowed under this subsection for any
    30  taxable year shall exceed the taxpayer's tax for such year,  the  excess
    31  shall  be treated as an overpayment of tax to be credited or refunded in
    32  accordance with the provisions of section six hundred eighty-six of this
    33  article, provided, however, that no interest shall be paid thereon.
    34    (4) In the case of spouses who file a joint federal  return,  but  who
    35  are  required  to  determine their New York taxes separately, the credit
    36  allowed pursuant to this subsection  may  be  applied  against  the  tax
    37  imposed on either or divided between them as they may elect.
    38    (5)  Commencing  in  the  fourth taxable year succeeding the effective
    39  date of this subsection, the commissioner shall provide for the  prepay-
    40  ment  of the working families credit under this subsection to qualifying
    41  taxpayers.   Four advanced payments shall be  made  to  such  qualifying
    42  taxpayers.    An  estimated annual tax credit shall be determined by the
    43  commissioner in advance of the first payment and  shall  be  subject  to
    44  adjustment due to changes in employment or family status over the course
    45  of  the year. The first three advanced payments shall be made during the
    46  taxable year and shall be twenty percent of the anticipated credit.  The
    47  fourth  advanced payment shall be made after the end of the tax year and
    48  shall be adjusted to match the actual credit due. Such  payments  shall,
    49  to  the extent practicable, be made available via direct deposit and via
    50  electronic benefit transfer (EBT) card. The commissioner  shall  provide
    51  information  on  the  availability  of  advanced payments of the working
    52  families credit to tax preparers, accountants,  and  organizations  that
    53  assist  individuals  in  tax  preparation.  Such  information  shall  be
    54  distributed to qualifying taxpayers. If a taxpayer establishes that they
    55  are requesting and receiving payments under this paragraph in good faith
    56  by  establishing  that  they  properly  claimed  payments   under   this

        A. 4022--C                          5

     1  subsection  in  the  prior  year  and  that  they have not experienced a
     2  substantial change in circumstances such that  they  have  a  reasonable
     3  expectation  of  eligibility in the current year, then they shall not be
     4  held responsible for an incorrect prepayment/refund amount.
     5    (6) Notwithstanding any provision of law to the contrary, the refunda-
     6  ble  credit  and  its  payment authorized under this subsection shall be
     7  treated in the same manner as the federal Earned Income Tax  Credit  and
     8  shall  not  be  considered  as  assets, income, or resources to the same
     9  extent the credit and its payment would be disregarded  pursuant  to  26
    10  U.S.C. § 6409 and the general welfare doctrine for purposes of determin-
    11  ing  eligibility  for benefits or assistance, or the amount or extent of
    12  those benefits or assistance, under any state or local program,  includ-
    13  ing  benefits  established  under  section  ninety-five  of  the  social
    14  services law.
    15    § 4. Section 616 of the tax law, as amended by chapter 28 of the  laws
    16  of  1987,  subsection (b) as amended by chapter 760 of the laws of 1992,
    17  is amended to read as follows:
    18    § 616. New York exemptions of a resident individual. (a) General.  For
    19  taxable  years beginning after nineteen hundred eighty-seven, a resident
    20  individual shall be allowed a New York exemption of one thousand dollars
    21  for each exemption for which [he is] they are entitled  to  a  deduction
    22  for  the  taxable  year  under  section  one hundred fifty-one(c) of the
    23  Internal Revenue Code; and  for  taxable  years  beginning  in  nineteen
    24  hundred  eighty-seven, a resident individual other than a taxpayer whose
    25  federal exemption amount is zero shall be allowed a New  York  exemption
    26  of  nine  hundred  dollars for each exemption for which [he is] they are
    27  entitled to a deduction for the taxable  year  for  federal  income  tax
    28  purposes.
    29    (b)  [Husband  and wife] Spouses.   If the New York income taxes of [a
    30  husband and wife] spouses are required to be separately  determined  but
    31  their  federal  income tax is determined on a joint return, each of them
    32  shall be separately entitled to the New York exemptions under subsection
    33  (a) of this section to which each would be separately entitled  for  the
    34  taxable  year if their federal income taxes had been determined on sepa-
    35  rate returns.
    36    (c) Commencing in the second taxable  year  succeeding  the  effective
    37  date  of  subsection (c-2) of section six hundred six of this article, a
    38  resident individual shall not be allowed the exemption described in this
    39  section for any qualifying child as defined in subparagraph (B) of para-
    40  graph one of subsection (c-2) of section six hundred six of  this  arti-
    41  cle.    Commencing  in  the fourth taxable year succeeding the effective
    42  date of subsection (c-2) of section six hundred six of this  article,  a
    43  resident individual shall not be allowed the exemption described in this
    44  section  for  any  qualifying  child through age seventeen as defined in
    45  subparagraph (C) of paragraph one of subsection  (c-2)  of  section  six
    46  hundred six of this article. In all years on or after the effective date
    47  of subsection (c-2) of section six hundred six of this article, however,
    48  a  resident  individual  shall  continue  to  be  allowed  the exemption
    49  described in this section for other qualifying dependents, as defined in
    50  26 USC § 152(a), who do not meet the definition of qualifying  child  in
    51  subparagraph  (B)  of  paragraph  one of subsection (c-2) of section six
    52  hundred six of this article and qualifying child through  age  seventeen
    53  as  defined  in subparagraph (C) of paragraph one of subsection (c-2) of
    54  section six hundred six of this article.
    55    § 5. This act shall take effect immediately.
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