Bill Text: NY A05577 | 2023-2024 | General Assembly | Amended


Bill Title: Provides for the advance payment of the earned income tax credit to qualifying employees.

Spectrum: Partisan Bill (Democrat 35-0)

Status: (Introduced) 2024-01-03 - referred to ways and means [A05577 Detail]

Download: New_York-2023-A05577-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         5577--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                     March 16, 2023
                                       ___________

        Introduced  by  M.  of  A.  FAHY, HEVESI, THIELE, STERN, SIMON, DICKENS,
          JACKSON, BURDICK, LUNSFORD,  DINOWITZ,  LUPARDO,  BRONSON,  GALLAGHER,
          GONZALEZ-ROJAS, FORREST, CRUZ, WALLACE, CLARK, SILLITTI, MEEKS, GLICK,
          RAMOS,  DARLING,  MITAYNES,  JEAN-PIERRE,  KELLES,  RIVERA,  McDONALD,
          SEAWRIGHT, STIRPE, LEVENBERG -- Multi-Sponsored by -- M. of A.  ARDILA
          --  read  once  and  referred  to  the  Committee on Ways and Means --
          committee discharged, bill amended, ordered reprinted as  amended  and
          recommitted to said committee

        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-five 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

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09953-05-3

        A. 5577--A                          2

     1  amount for a joint filer and  inflation  adjustment  specified  in  such
     2  section  of the internal revenue code for taxable years beginning in two
     3  thousand twenty-five and thereafter.
     4    The  applicable percentage shall be (i) seven and one-half percent for
     5  taxable years  beginning  in  nineteen  hundred  ninety-four,  (ii)  ten
     6  percent  for  taxable  years  beginning in nineteen hundred ninety-five,
     7  (iii) twenty percent for taxable years beginning after nineteen  hundred
     8  ninety-five  and  before  two  thousand,  (iv)  twenty-two  and one-half
     9  percent for taxable years beginning in  two  thousand,  (v)  twenty-five
    10  percent  for  taxable  years beginning in two thousand one, (vi) twenty-
    11  seven and one-half percent for taxable years beginning in  two  thousand
    12  two, [and] (vii) thirty percent for taxable years beginning in two thou-
    13  sand  three,  (viii)  thirty-five percent for taxable years beginning in
    14  two thousand twenty-five, and  (ix)  forty  percent  for  taxable  years
    15  beginning  in two thousand twenty-six and thereafter.  For taxable years
    16  beginning in two thousand twenty-five and thereafter, in the case of  an
    17  eligible  individual  with no qualifying children, the credit percentage
    18  shall be fifteen and three-tenths to determine the amount of the  earned
    19  income tax credit referenced in section 32(b)(1) of the internal revenue
    20  code  and the earned income amount and the phaseout amount of such indi-
    21  vidual shall be determined as if such earned income amount and  phaseout
    22  amount as referenced in section 32(b)(2)(A) of the internal revenue code
    23  are  equal  to  the  amount  allowed for an eligible individual with one
    24  qualifying child as such  amounts  are  referenced  in  such  paragraph.
    25  Provided  further, for the purpose of this subsection, an eligible indi-
    26  vidual shall be an individual who has attained nineteen years of age  as
    27  opposed  to  twenty-five  years  of age, irrespective of the eligibility
    28  referenced in section 32(c)(1)(A)(ii)(II) of the internal revenue  code.
    29  Furthermore,  an  individual  otherwise eligible but for the requirement
    30  under section 32(m) of the internal revenue code shall be  eligible  for
    31  this  credit. Provided, however, that if the reversion event, as defined
    32  in this paragraph, occurs, the applicable  percentage  shall  be  twenty
    33  percent  for  taxable  years  ending  on  or after the date on which the
    34  reversion event occurred. The reversion event shall be  deemed  to  have
    35  occurred  on the date on which federal action, including but not limited
    36  to, administrative, statutory or regulatory changes, materially  reduces
    37  or  eliminates  New  York  state's  allocation  of the federal temporary
    38  assistance for needy families block grant,  or  materially  reduces  the
    39  ability  of  the  state  to spend federal temporary assistance for needy
    40  families block grant funds for the earned  income  credit  or  to  apply
    41  state  general  fund  spending  on  the  earned income credit toward the
    42  temporary assistance for  needy  families  block  grant  maintenance  of
    43  effort  requirement, and the commissioner of the office of temporary and
    44  disability assistance shall certify  the  date  of  such  event  to  the
    45  commissioner  of  taxation  and finance, the director of the division of
    46  the budget, the speaker of the assembly and the temporary  president  of
    47  the senate.
    48    (9) Individuals over age sixty-five. Notwithstanding the provisions of
    49  section 32(c)(1)(A)(ii)(III) of the internal revenue code, an individual
    50  who is otherwise eligible to receive the earned income credit under this
    51  subsection  shall  not  be deemed ineligible due solely to the fact that
    52  such individual has attained the age of sixty-five.
    53    § 2. The tax law is amended by adding a new section  679  to  read  as
    54  follows:
    55    §  679.  Advance  payment  of  earned income credit. (a) General rule.
    56  Except as otherwise provided in this  chapter,  the  commissioner  shall

        A. 5577--A                          3

     1  provide  for  the  prepayment  of the earned income credit to qualifying
     2  employees.
     3    (b)  Earned income eligibility certificate. For purposes of this arti-
     4  cle, an earned income eligibility certificate is a  statement  furnished
     5  by an employee to the commissioner which:
     6    (1)  certifies that the employee will be eligible to receive an earned
     7  income credit or an enhanced earned income credit provided  pursuant  to
     8  subsection  (d)  or (d-1) of section six hundred six of this article for
     9  the taxable year;
    10    (2) certifies that the employee does not have an earned income  eligi-
    11  bility  certificate  in  effect for the taxable year with respect to the
    12  payment of wages by another employer; and
    13    (3) states whether the employee's spouse has an earned  income  eligi-
    14  bility  certificate  in  effect. For purposes of this section, a certif-
    15  icate shall be treated as being in effect with respect to  a  spouse  if
    16  such  certificate  will  be  in effect on the first status determination
    17  date following the date on which the other eligible spouse furnishes the
    18  statement in question.
    19    (c) Earned income advance amount. Four advanced payments shall be made
    20  to such qualifying employees. An estimated annual tax  credit  shall  be
    21  determined by the commissioner in advance of the first payment and shall
    22  be  subject  to adjustment due to changes in employment or family status
    23  over the course of the year. Prior  to  disbursement,  the  commissioner
    24  shall  ensure that the qualifying employee's status has not changed. The
    25  first three advanced payments shall be made during the taxable year  and
    26  shall  be  twenty percent of the anticipated credit. The fourth advanced
    27  payment shall be made after the tax year is over and shall  be  adjusted
    28  to  match  the  actual  credit due eligible. Such payments shall, to the
    29  extent practicable, be made available via direct deposit and  via  elec-
    30  tronic benefit transfer (EBT) card.
    31    (d)  Form  and  contents  of  certificate.   Earned income eligibility
    32  certificates shall be in such form and contain such information  as  the
    33  commissioner may determine and prescribe.
    34    (e)  Notification. (1) The commissioner shall notify all taxpayers who
    35  have received a refund of the credit pursuant to subsection (d) or (d-1)
    36  of section six hundred six of this article based on the most recent  tax
    37  return or record in writing of the availability of earned income advance
    38  amounts  under  this  section.  Such  written or electronic notification
    39  shall include a clearly labeled section or withholding forms and a sepa-
    40  rate handout with information about the advanced payment of  the  earned
    41  income  credit in the six most common languages spoken by individuals in
    42  this state.
    43    (2) The commissioner shall provide information on the availability  of
    44  earned  income  advance  amounts  under  this  section to tax preparers,
    45  accountants and organizations that assist individuals  in  tax  prepara-
    46  tion.  Such information shall be distributed to qualifying individuals.
    47    (f) Coordination with advance payments of earned income credit. (1) If
    48  any  payment  is  made  to  the  individual by the department under this
    49  section during any calendar year, the tax imposed by  this  chapter  for
    50  the individual's last taxable year beginning in such calendar year shall
    51  be increased by the aggregate amount of such payments.
    52    (2)  If an individual establishes that they are requesting and receiv-
    53  ing payments under this section in good faith by establishing that  they
    54  properly  claimed payments under this section in the prior year and that
    55  they have has not experienced a substantial change in circumstances such

        A. 5577--A                          4

     1  that they have a reasonable expectation of eligibility  in  the  current
     2  year, then paragraph one of this subsection shall not apply.
     3    (3)  Any increase in tax under this subsection shall not be treated as
     4  tax imposed by this chapter for purposes of determining  the  amount  of
     5  any  credit, other than the credit allowed by subsection (d) or (d-1) of
     6  section six hundred six of this article, allowable under this article.
     7    § 3. This act shall take effect immediately and shall apply to taxable
     8  years beginning on or after January 1, 2025.
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