Provides that the income level for the requirement to file a personal income tax return shall be the dollar amount of the New York standard deduction.
Ayes (59): Adams, Addabbo, Alesi, Avella, Ball, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Johnson, Kennedy, Klein, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Storobin, Valesky, Young, Zeldin
Excused (3): Espaillat, Huntley, Krueger
TITLE OF BILL: An act to amend the tax law, in relation to the requirement to file a personal income tax return
PURPOSE: To set minimum personal income tax filing levels at the level of the federal adjusted gross income for the taxable year plus state addition modifications in excess of the New York standard deduction, rather than the arbitrary $4,000 which is currently in statute. This effectively means that most persons with no State personal income tax liability or refundable credits will not have to file state tax returns.
SUMMARY OF PROVISIONS: Amends section 651 of the Tax Law to replace the statutory $4,000 filing minimum with a minimum equal to the federal adjusted gross income for the taxable year plus state addition modifications in excess of the New York standard deduction.
JUSTIFICATION: The current $4,000 minimum filing limit has been in statute for many years and forces persons who owe no taxes and who file no federal returns to file State income tax returns. This is a burden for low income persons, particularly senior citizens. It also adds administrative costs for the Department of Taxation and Finance, which must process numerous returns for which no tax is due. Persons with incomes lower than the standard deduction owe no tax and this will eliminate the patently unnecessary filing. The Department of Taxation and Finance estimates that approximately 250,000 persons with no tax liability and no refunds or refundable credits will be removed from filing requirements, saving the department an estimated $500,000 annually in processing and administrative costs. Furthermore, many of the individuals who would no longer have to file would be retirees with mostly exempt pension or annuity income.
LEGISLATIVE HISTORY: 2009: A.00661A (Kavanagh) - Ways and Means 2008: A.10156 (Kavanagh) - Ways and Means 2007-08: A.1309B (Aubertine) - Ways and Means 2003-04: S.979B - Passed Senate 2001-02: S.1601 - Passed Senate 2009-10: S5283A - Passed Senate
FISCAL IMPACT ON THE STATE: Expected to reduce administrative costs of Department of Taxation and Finance by $500,000 annually.
FISCAL IMPACT ON LOCALITIES: None. The Department of Taxation and Finance has determined that the change will not impact the allocation of state aid to school districts.
This act shall take effect immediately and shall apply to all taxable years beginning on or after the date on which this act shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 22 2011-2012 Regular Sessions IN SENATE (PREFILED) January 5, 2011 ___________Introduced by Sens. SQUADRON, DIAZ, HASSELL-THOMPSON, MONTGOMERY, SERRA- NO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to the requirement to file a personal income tax return THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subsection (a) of section 651 of the tax law, as amended by chapter 333 of the laws of 1987, is amended to read as follows: (1) every resident individual (A)
[required to file a federal income tax return for the taxable year, or (B)]having federal adjusted gross income for the taxable year, increased by the modifications under subsection (b) of section six hundred twelve OF THIS ARTICLE, in excess of [four thousand dollars, or in excess of]his OR HER New York standard deduction, [if lower,]or [(C)](B) subject to tax under section six hundred two OF THIS ARTICLE, or [(D)](C) having received during the taxable year a lump sum distribution any portion of which is subject to tax under section six hundred three OF THIS ARTICLE; S 2. This act shall take effect immediately and shall apply to all taxable years beginning on or after the date on which this act shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00161-01-1