Bill Text: NY S00277 | 2023-2024 | General Assembly | Amended
Bill Title: 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.
Spectrum: Moderate Partisan Bill (Democrat 25-3)
Status: (Introduced) 2024-02-27 - REPORTED AND COMMITTED TO FINANCE [S00277 Detail]
Download: New_York-2023-S00277-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 277--B 2023-2024 Regular Sessions IN SENATE (Prefiled) January 4, 2023 ___________ Introduced by Sens. GOUNARDES, COONEY, ASHBY, BROUK, CHU, CLEARE, FERNANDEZ, HINCHEY, HOYLMAN-SIGAL, KAVANAGH, KENNEDY, MANNION, MAY, MURRAY, MYRIE, RAMOS, RIVERA, SALAZAR, SEPULVEDA, SERRANO, WEBB -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said commit- tee -- recommitted to the Committee on Budget and Revenue in accord- ance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, 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 portion of the earned income 5 credit attributable to qualifying children, as defined in paragraph one 6 of subsection (c-2) of this section, shall be reduced over the course of 7 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-one; 13 (B) In the second taxable year succeeding the effective date of 14 subsection (c-2) of this section, the applicable percentage of the 15 earned income credit allowed under section thirty-two of the internal 16 revenue code for the same taxable year, as described in paragraph one of 17 this subsection, shall be reduced to fifteen; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02008-06-4S. 277--B 2 1 (C) In the third 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 ten; 6 (D) In the fourth taxable year succeeding the effective date of 7 subsection (c-2) of this section and each taxable year thereafter, the 8 applicable percentage of the earned income credit allowed under section 9 thirty-two of the internal revenue code for the same taxable year, as 10 described in paragraph one of this subsection, shall be reduced to zero. 11 The reduction described in this paragraph shall apply only to the 12 portion of a taxpayer's earned income credit that is attributable to 13 qualifying children as defined in paragraph one of subsection (c-2) of 14 this section. A taxpayer shall continue to be allowed the earned income 15 credit for the portions of such credit attributable to another qualify- 16 ing child, as defined in 26 USC §152(c), or qualifying relative, as 17 defined in 26 USC §152(d), who do not meet the definition of qualifying 18 child in paragraph one of subsection (c-2) of this section. 19 § 2. Paragraph 1 of subsection (c-1) of section 606 of the tax law, as 20 amended by section 1 of part HH of chapter 56 of the laws of 2023, is 21 amended to read as follows: 22 (1) [A] For taxable years prior to the first of January next succeed- 23 ing the effective date of subsection (c-2) of this section, a resident 24 taxpayer shall be allowed a credit as provided herein equal to the 25 greater of one hundred dollars times the number of qualifying children 26 of the taxpayer or the applicable percentage of the child tax credit 27 allowed the taxpayer under section twenty-four of the internal revenue 28 code for the same taxable year for each qualifying child. Provided, 29 however, in the case of a taxpayer whose federal adjusted gross income 30 exceeds the applicable threshold amount set forth by section 24(b)(2) of 31 the Internal Revenue Code, the credit shall only be equal to the appli- 32 cable percentage of the child tax credit allowed the taxpayer under 33 section 24 of the Internal Revenue Code for each qualifying child. For 34 the purposes of this subsection, a qualifying child shall be a child who 35 meets the definition of qualified child under section 24(c) of the 36 internal revenue code. The applicable percentage shall be thirty-three 37 percent. For purposes of this subsection, any reference to section 24 of 38 the Internal Revenue Code shall be a reference to such section as it 39 existed immediately prior to the enactment of Public Law 115-97. 40 § 3. Section 606 of the tax law is amended by adding a new subsection 41 (c-2) to read as follows: 42 (c-2) New York state working families tax credit. (1) Definitions. 43 (A) "Adjusted for inflation" shall mean that the commissioner increases 44 the dollar amount of a credit or adjusted gross income, as applicable, 45 by an amount equal to such dollar amount multiplied by the cost-of-liv- 46 ing adjustment determined under 26 USC § 1 (f)(3), for the calendar year 47 in which the taxable year being referenced begins. 48 (B) "Adjusted for all inflation since two thousand twenty-three" shall 49 mean the commissioner increases the dollar amount of a credit or 50 adjusted gross income, as applicable, by an amount equal to the sum of 51 all cost-of-living adjustments calculated and published by the internal 52 revenue service pursuant to 26 USC §1(f)(3) since calendar year two 53 thousand twenty-three. 54 (C) "Qualifying child" or "qualifying children" shall mean as defined 55 in 26 USC §24(c)(1) except that such term shall also include qualifying 56 children who have not attained the age of eighteen.S. 277--B 3 1 (2) (A) For taxable years beginning on and after the first of January 2 next succeeding the effective date of this subsection, a resident 3 taxpayer with a New York state adjusted gross income of less than twen- 4 ty-five thousand dollars in the case of an individual who is not 5 married; fifty thousand dollars in the case of a joint return; or twen- 6 ty-five thousand dollars in the case of a married individual filing a 7 separate return shall be allowed a credit equal to: 8 (i) In the first taxable year succeeding the effective date of this 9 subsection, eight hundred dollars per qualifying child; 10 (ii) In the second taxable year succeeding the effective date of this 11 subsection, one thousand one hundred dollars per qualifying child; 12 (iii) In the third taxable year succeeding the effective date of this 13 subsection, one thousand three hundred and fifty dollars per qualifying 14 child; 15 (iv) In the fourth taxable year succeeding the effective date of this 16 subsection and each taxable year thereafter, one thousand six hundred 17 dollars per qualifying child, provided, however, that the dollar amount 18 herein prescribed shall be adjusted for all inflation since two thousand 19 twenty-three in the fourth taxable year succeeding the effective date of 20 this subsection and each taxable year thereafter. 21 (B) The amount of the credit per child shall be reduced by twenty 22 dollars for each one thousand dollars by which the taxpayer's New York 23 state adjusted gross income exceeds: 24 (i) In the first taxable year succeeding the effective date of this 25 subsection, sixty-five thousand dollars in the case of an individual who 26 is not married, one hundred thirty thousand dollars in the case of a 27 joint return, or sixty-five thousand dollars in the case of a married 28 individual filing a separate return; 29 (ii) In the second taxable year succeeding the effective date of this 30 subsection, fifty-five thousand dollars in the case of an individual who 31 is not married, one hundred ten thousand dollars in the case of a joint 32 return, or fifty-five thousand dollars in the case of a married individ- 33 ual filing a separate return; 34 (iii) In the third taxable year succeeding the effective date of this 35 subsection, forty-five thousand dollars in the case of an individual who 36 is not married, ninety thousand dollars in the case of a joint return, 37 or forty-five thousand dollars in the case of a married individual 38 filing a separate return; and 39 (iv) In the fourth taxable year succeeding the effective date of this 40 section and each taxable year thereafter, twenty-five thousand dollars 41 in the case of an individual who is not married, fifty thousand dollars 42 in the case of a joint return, or twenty-five thousand dollars in the 43 case of a married individual filing a separate return, provided, howev- 44 er, that the dollar amount herein prescribed shall be adjusted for 45 inflation in the fourth taxable year succeeding the effective date of 46 this subsection and each taxable year thereafter. 47 (C) Provided, however, that the amount of the credit shall never be 48 reduced below the following amounts: 49 (i) In the first taxable year next succeeding the effective date of 50 this subsection, one hundred fifty dollars per qualifying child; 51 (ii) In the second taxable year succeeding the effective date of this 52 subsection, two hundred fifty dollars per qualifying child; 53 (iii) In the third taxable year succeeding the effective date of this 54 subsection, four hundred dollars per qualifying child; 55 (iv) In the fourth taxable year succeeding the effective date of this 56 subsection, five hundred dollars per qualifying child; andS. 277--B 4 1 (v) In the fifth taxable year succeeding the effective date of this 2 subsection and each taxable year thereafter, five hundred dollars per 3 qualifying child, provided, however, that the dollar amount herein 4 prescribed shall be adjusted for inflation in the fifth taxable year 5 succeeding the effective date of this subsection and each taxable year 6 thereafter. 7 (D) Such resident taxpayer must provide the social security number or 8 individual taxpayer identification number for each qualifying child in 9 order to receive the credit described in this subsection. 10 (3) If the amount of the credit allowed under this subsection for any 11 taxable year shall exceed the taxpayer's tax for such year, the excess 12 shall be treated as an overpayment of tax to be credited or refunded in 13 accordance with the provisions of section six hundred eighty-six of this 14 article, provided, however, that no interest shall be paid thereon. 15 (4) In the case of spouses who file a joint federal return, but who 16 are required to determine their New York taxes separately, the credit 17 allowed pursuant to this subsection may be applied against the tax 18 imposed on either or divided between them as they may elect. 19 (5) Commencing in the fourth taxable year succeeding the effective 20 date of this subsection, the commissioner shall provide for the prepay- 21 ment of the working families credit under this subsection to qualifying 22 taxpayers. Four advanced payments shall be made to such qualifying 23 taxpayers. An estimated annual tax credit shall be determined by the 24 commissioner in advance of the first payment and shall be subject to 25 adjustment due to changes in employment or family status over the course 26 of the year. The first three advanced payments shall be made during the 27 taxable year and shall be twenty percent of the anticipated credit. The 28 fourth advanced payment shall be made after the end of the tax year and 29 shall be adjusted to match the actual credit due. Such payments shall, 30 to the extent practicable, be made available via direct deposit and via 31 electronic benefit transfer (EBT) card. The commissioner shall provide 32 information on the availability of advanced payments of the working 33 families credit to tax preparers, accountants, and organizations that 34 assist individuals in tax preparation. Such information shall be 35 distributed to qualifying taxpayers. If a taxpayer establishes that they 36 are requesting and receiving payments under this paragraph in good faith 37 by establishing that they properly claimed payments under this 38 subsection in the prior year and that they have not experienced a 39 substantial change in circumstances such that they have a reasonable 40 expectation of eligibility in the current year, then they shall not be 41 held responsible for an incorrect prepayment/refund amount. 42 (6) Notwithstanding any provision of law to the contrary, the refunda- 43 ble credit and its payment authorized under this subsection shall be 44 treated in the same manner as the federal Earned Income Tax Credit and 45 shall not be considered as assets, income, or resources to the same 46 extent the credit and its payment would be disregarded pursuant to 26 47 U.S.C. § 6409 and the general welfare doctrine for purposes of determin- 48 ing eligibility for benefits or assistance, or the amount or extent of 49 those benefits or assistance, under any state or local program, includ- 50 ing benefits established under section ninety-five of the social 51 services law. 52 § 4. Section 616 of the tax law, as amended by chapter 28 of the laws 53 of 1987, subsection (b) as amended by chapter 760 of the laws of 1992, 54 is amended to read as follows: 55 § 616. New York exemptions of a resident individual. (a) General. For 56 taxable years beginning after nineteen hundred eighty-seven, a residentS. 277--B 5 1 individual shall be allowed a New York exemption of one thousand dollars 2 for each exemption for which [he is] they are entitled to a deduction 3 for the taxable year under section one hundred fifty-one(c) of the 4 Internal Revenue Code; and for taxable years beginning in nineteen 5 hundred eighty-seven, a resident individual other than a taxpayer whose 6 federal exemption amount is zero shall be allowed a New York exemption 7 of nine hundred dollars for each exemption for which [he is] they are 8 entitled to a deduction for the taxable year for federal income tax 9 purposes. 10 (b) [Husband and wife] Spouses. If the New York income taxes of [a11husband and wife] spouses are required to be separately determined but 12 their federal income tax is determined on a joint return, each of them 13 shall be separately entitled to the New York exemptions under subsection 14 (a) of this section to which each would be separately entitled for the 15 taxable year if their federal income taxes had been determined on sepa- 16 rate returns. 17 (c) Commencing in the taxable year next succeeding the effective date 18 of subsection (c-2) of section six hundred six of this article, a resi- 19 dent individual shall not be allowed the exemption described in this 20 section for any qualifying child as defined in paragraph one of 21 subsection (c-2) of section six hundred six of this article. A resident 22 individual shall continue to be allowed the exemption described in this 23 section, however, for other qualifying dependents, as defined in 26 USC 24 § 152(a), who do not meet the definition of qualifying child in para- 25 graph one of subsection (c-2) of section six hundred six of this arti- 26 cle. 27 § 5. This act shall take effect immediately.
