Bill S4823-2015

Increases the amount of the earned income tax credit

Increases the amount of the earned income tax credit.

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  • Apr 20, 2015: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S4823           REVISED MEMO 04/22/2015

TITLE OF BILL: An act to amend the tax law, in relation to increasing the earned income tax credit

PURPOSE OF THE BILL:

To increase the amount of the Earned Income Tax Credit (EITC), a refundable credit for low-income working individuals and families, from 30% of the federal credit to 32.5% for the taxable year beginning in 2015 and 35% for taxable years beginning in 2016.

SUMMARY OF SPECIFIC PROVISIONS:

§ 1 - Amends paragraph 1 of subsection (d) of section 606 of the Tax Law to increase the EITC from 30% of the federal credit to 32.5% for the taxable year beginning in 2015 and 35% for taxable years beginning in 2016,.

§ 2 - Effective date.

JUSTIFICATION:

Enacted in 1975, the federal Earned Income Credit was created to offset Social Security taxes, helping to reduce the tax burden on and putting money back in the pockets of lower income families. Since enactment of the state EITC in 1994, which is based on a percentage of the federal EIC, the EITC percentage has been raised several times and is now valued at 30% of the federal credit.

The EITC is targeted to working families and is specifically designed to provide the greatest benefits to households with children. As income rises, EITC benefits phase down until eligibility ends at $49,078 for married filers with three children.

Time and again, we see how quickly day-to-day expenses and unexpected bills can add up, throwing a family's monthly budget off track. The EITC can provide cash-strapped working families with much-needed support to help cover living expenses.

This legislation would raise the EITC from 30% of the federal credit to 32.5% for the taxable year beginning in 2015 and 35% for taxable years beginning in 2016, thus helping low-income working individuals and families.

PRIOR LEGISLATIVE HISTORY:

Senate: New Bill Assembly: 2013-2014: A. 4280; 2011-2012: A.9542.

FISCAL IMPLICATIONS:

Implementation of the full 5% increase would be approximately $160 million ($80 million in 2015 and $80 million in 2016), however, fiscal impact is determined by the number of tax payers who take advantage of the credit.

EFFECTIVE DATE:

This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 4823 2015-2016 Regular Sessions IN SENATE April 20, 2015 ___________
Introduced by Sen. PANEPINTO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to increasing the earned income tax credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 1 of subsection (d) of section 606 of the tax law, as amended by section 1 of part Q of chapter 63 of the laws of 2000, is amended to read as follows: (1) General. A taxpayer shall be allowed a credit as provided herein equal to (i) the applicable percentage of the earned income credit allowed under section thirty-two of the internal revenue code for the same taxable year, (ii) reduced by the credit permitted under subsection (b) of this section. The applicable percentage shall be (i) seven and one-half percent for taxable years beginning in nineteen hundred ninety-four, (ii) ten percent for taxable years beginning in nineteen hundred ninety-five, (iii) twenty percent for taxable years beginning after nineteen hundred ninety-five and before two thousand, (iv) twenty-two and one-half percent for taxable years beginning in two thousand, (v) twenty-five percent for taxable years beginning in two thousand one, (vi) twenty- seven and one-half percent for taxable years beginning in two thousand two, [and] (vii) thirty percent for taxable years beginning in two thou- sand three AND BEFORE TWO THOUSAND FIFTEEN, (VIII) THIRTY-TWO AND ONE-HALF PERCENT FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, AND (IX) THIRTY-FIVE PERCENT FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN and thereafter. Provided, however, that if the reversion event, as defined in this paragraph, occurs, the applicable percentage shall be twenty percent for taxable years ending on or after the date on which the reversion event occurred. The reversion event shall be deemed to
have occurred on the date on which federal action, including but not limited to, administrative, statutory or regulatory changes, materially reduces or eliminates New York state's allocation of the federal tempo- rary assistance for needy families block grant, or materially reduces the ability of the state to spend federal temporary assistance for needy families block grant funds for the earned income credit or to apply state general fund spending on the earned income credit toward the temporary assistance for needy families block grant maintenance of effort requirement, and the commissioner of the office of temporary and disability assistance shall certify the date of such event to the commissioner of taxation and finance, the director of the division of the budget, the speaker of the assembly and the temporary president of the senate. S 2. This act shall take effect immediately.

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