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

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          5577

                               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 -- 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-four 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-four
    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-four and thereafter.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09953-03-3
        A. 5577                             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-four, and  (ix)  forty  percent  for  taxable  years
    12  beginning in two thousand twenty-five and thereafter.  For taxable years
    13  beginning  in two thousand twenty-four and thereafter, in the case of an
    14  eligible individual with no qualifying children, the  credit  percentage
    15  shall  be fifteen and three-tenths to determine the amount of the earned
    16  income tax credit referenced in section 32(b)(1) of the internal revenue
    17  code and the earned income amount and the phaseout amount of such  indi-
    18  vidual  shall be determined as if such earned income amount and phaseout
    19  amount as referenced in section 32(b)(2)(A) of the internal revenue code
    20  are equal to the amount allowed for  an  eligible  individual  with  one
    21  qualifying  child  as  such  amounts  are  referenced in such paragraph.
    22  Provided further, for the purpose of this subsection, an eligible  indi-
    23  vidual  shall be an individual who has attained nineteen years of age as
    24  opposed to twenty-five years of age,  irrespective  of  the  eligibility
    25  referenced  in section 32(c)(1)(A)(ii)(II) of the internal revenue code.
    26  Furthermore, an individual otherwise eligible but  for  the  requirement
    27  under  section  32(m) of the internal revenue code shall be eligible for
    28  this credit. Provided, however, that if the reversion event, as  defined
    29  in  this  paragraph,  occurs,  the applicable percentage shall be twenty
    30  percent for taxable years ending on or  after  the  date  on  which  the
    31  reversion  event  occurred.  The reversion event shall be deemed to have
    32  occurred on the date on which federal action, including but not  limited
    33  to,  administrative, statutory or regulatory changes, materially reduces
    34  or eliminates New York  state's  allocation  of  the  federal  temporary
    35  assistance  for  needy  families  block grant, or materially reduces the
    36  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) Adults over age  sixty-five.  Notwithstanding  the  provisions  of
    46  section  thirty-two  of  the internal revenue code, an individual who is
    47  otherwise eligible to  receive  the  earned  income  credit  under  this
    48  subsection  shall  not  be  deemed ineligible to receive such credit due
    49  solely to the fact that such individual is age sixty-five or older.
    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. 5577                             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 he or she is requesting and
    51  receiving payments under this section in good faith by establishing that
    52  he or she properly claimed payments under this section in the prior year
    53  and that he or she has not experienced a substantial change  in  circum-
    54  stances  such that he or she has a reasonable expectation of eligibility
    55  in the current year, then paragraph one of  this  subsection  shall  not
    56  apply.
        A. 5577                             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, 2024.