Bill S6601-2013

Establishes the renters' and small homeowners' credit in a city with a population of a million or more

Establishes the renters' and small homeowners' credit in a city with a population of a million or more.

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  • Feb 11, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S6601

TITLE OF BILL: An act to amend the tax law, in relation to establishing a renters' and small homeowners' tax credit

PURPOSE OF THE BILL:

To provide a state tax credit to renters and small homeowners in the city of New York.

SUMMARY OF PROVISIONS:

Section 1 of the bill amends section 606 of the tax law by adding a new subsection (b-1) that will provide a renters' and small homeowners' tax credit in a city of a million or more.

(A) The bill defines a "qualified" tax payer to be any one of the following individuals:

> A resident individual who lives in a city with a population of a million or more who has occupied and paid rent for his or her primary residence in such city for six months or more of the taxable year, is required or chooses to file a tax return and is one of the following:

*is 65 or older *is filing a joint return with a spouse who is 65 or older *is a head of household *is a married individual filing a joint return with a spouse and has at least 1 dependent *is a married individual filing a separate return and has at least 1 dependent *is a surviving spouse and has at least one dependent

> An owner of any dwelling with six units or less in a city of a million or more who occupies such dwelling as his or her primary residence for six months or more of the taxable year and who is required or chooses to file a tax return.

The bill also states that an individual who is listed as a dependent allowable to another taxpayer for the taxable year or who pays rent for his or her primary resident to a family member sharing the same primary residence shall not be a "qualified taxpayer" for purposes of this section.

(B) "Residence" means a dwelling in a city with a population of a million or more and may consist of a part of a multi-dwelling or multi-purpose building including a cooperative or condominium, one, two or three family dwellings and rental units within a single dwelling which are either owner-occupied or rented by a qualified taxpayer.

(2)(A) A qualified taxpayer shall be allowed a credit against the taxes imposed by this article reduced by the credits permitted in this article. If the credit exceeds the tax as so reduced for such year, the excess shall be treated as an overpayment of tax to be credited or refunded without interest.

(2)(B) If more than one qualified taxpayer pays rent for the same primary residence and has a federal adjusted gross income for which a credit would be due, each such qualified taxpayer shall divide the base amount of the credit allowed for his or her income level by the total number of individuals or married couples filing a joint return who are paying the rent, whether or not eligible for a credit, to determine the amount of credit allowed to that qualified taxpayer.

(2) (C) A qualified taxpayer shall be allowed the credit under this subsection or the credit under subsection (e) of this section (real property tax circuit breaker credit), whichever is the higher amount.

(3)(A) Sets forth the tables to be used for determining the credits allowed for a qualified taxpayer who is 65 or older with a filing status of single.

(3)(B) Sets forth the tables to be used for determining the credits allowed for any other qualified taxpayer, provided, however, that a qualified taxpayer who is a married individual filing a separate New York income tax return shall receive one-half of the base amount of the credit plus any additional amount for which such taxpayer would be eligible based on the income and number of exemptions claimed by such taxpayer.

Section 2 sets an immediate effective date.

JUSTIFICATION:

In January 2014, Governor Cuomo proposed the creation of a Renters' Tax Credit in his 2014-2015 Budget in order to give renters a much needed income tax credit to ease their tax burden.

While it is important to give renters this income tax credit, it is equally important that small homeowners, including co-op and condominium owners in the city of New York also be granted this same tax credit. In December 2011 a property tax cap was implemented throughout New York State but explicitly exempted the city of New York. This much needed relief was denied to small homeowners in the city of New York despite their equally dire need for relief from their overall tax burden.

This bill will rectify that inequity and provide much needed relief to both renters and small homeowners who occupy these residences as their primary residences. This includes owners of co-ops and condominiums who are already being treated unfairly under the New York City property tax laws.

PRIOR LEGISLATIVE HISTORY:

None.

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

To be determined.

EFFECTIVE DATE:

This act shall take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 6601 IN SENATE February 11, 2014 ___________
Introduced by Sen. AVELLA -- 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 establishing a renters' and small homeowners' tax credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 606 of the tax law is amended by adding a new subsection (b-1) to read as follows: (B-1) RENTERS' AND SMALL HOMEOWNERS' CREDIT IN A CITY WITH A POPU- LATION OF ONE MILLION OR MORE. (1) FOR THE PURPOSES OF THIS SUBSECTION: (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL WHO LIVES IN A CITY WITH A POPULATION OF ONE MILLION OR MORE WHO HAS OCCUPIED AND PAID RENT FOR HIS OR HER PRIMARY RESIDENCE IN SUCH CITY FOR SIX MONTHS OR MORE OF THE TAXABLE YEAR, IS REQUIRED OR CHOOSES TO FILE A RETURN UNDER THIS ARTICLE, AND (I) IS SIXTY-FIVE YEARS OF AGE OR OLDER, (II) IS FILING A JOINT RETURN WITH A SPOUSE WHO IS SIXTY-FIVE YEARS OF AGE OR OLDER, (III) IS A HEAD OF HOUSEHOLD, (IV) IS A MARRIED INDIVIDUAL FILING A JOINT RETURN WITH A SPOUSE AND HAS AT LEAST ONE DEPENDENT, (V) IS A MARRIED INDIVIDUAL FILING A SEPARATE RETURN AND HAS AT LEAST ONE DEPEND- ENT, OR (VI) IS A SURVIVING SPOUSE AND HAS AT LEAST ONE DEPENDENT. FOR PURPOSES OF THIS SUBSECTION "QUALIFIED TAXPAYER" SHALL ALSO INCLUDE THE OWNER OF ANY DWELLING WITH SIX UNITS OR LESS IN A CITY WITH A POPULATION OF ONE MILLION OR MORE WHO OCCUPIES SUCH DWELLING AS HIS OR HER PRIMARY RESIDENCE FOR SIX MONTHS OR MORE OF THE TAXABLE YEAR AND WHO IS REQUIRED OR CHOOSES TO FILE A RETURN UNDER THIS ARTICLE. AN INDIVIDUAL CANNOT BE A QUALIFIED TAXPAYER IF HE OR SHE IS AN INDIVIDUAL WITH RESPECT TO WHOM A DEDUCTION UNDER SUBSECTION (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE IS ALLOWABLE TO ANOTHER TAXPAYER FOR THE TAXABLE YEAR OR PAYS RENT FOR HIS OR HER PRIMARY RESIDENCE TO A FAMILY MEMBER SHARING THE SAME PRIMARY RESIDENCE. A FAMILY MEMBER OF AN INDIVIDUAL IS THE INDIVIDUAL'S SPOUSE, BROTHER, SISTER, PARENT, GRANDPARENT, CHILD, GRANDCHILD, UNCLE,
AUNT, NEPHEW, OR NIECE, RELATED TO THE INDIVIDUAL BY BLOOD, MARRIAGE OR ADOPTION. (B) "RESIDENCE" MEANS A DWELLING IN A CITY WITH A POPULATION OF ONE MILLION OR MORE AND MAY CONSIST OF A PART OF A MULTI-DWELLING OR MULTI- PURPOSE BUILDING INCLUDING A COOPERATIVE OR CONDOMINIUM, ONE, TWO OR THREE FAMILY DWELLINGS AND RENTAL UNITS WITHIN A SINGLE DWELLING WHICH ARE EITHER OWNER-OCCUPIED OR RENTED BY A QUALIFIED TAXPAYER. RESIDENCE INCLUDES A TRAILER OR MOBILE HOME, USED EXCLUSIVELY FOR RESIDENTIAL PURPOSES AND DEFINED AS REAL PROPERTY PURSUANT TO PARAGRAPH (G) OF SUBDIVISION TWELVE OF SECTION ONE HUNDRED TWO OF THE REAL PROPERTY TAX LAW. (2) (A) A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AS PROVIDED IN THIS SUBSECTION AGAINST THE TAXES IMPOSED BY THIS ARTICLE REDUCED BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX AS SO REDUCED FOR SUCH YEAR UNDER THIS ARTICLE, THE EXCESS SHALL BE TREATED AS AN OVERPAYMENT OF TAX TO BE CREDITED OR REFUNDED IN ACCORDANCE WITH THE PROVISIONS OF SECTION SIX HUNDRED EIGHTY-SIX OF THIS ARTICLE, PROVIDED, HOWEVER, THAT NO INTEREST SHALL BE PAID THEREON. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY- ONE OF THIS ARTICLE BUT OTHERWISE QUALIFIES FOR A CREDIT UNDER THIS SUBSECTION, A CLAIM FOR A CREDIT MAY BE TAKEN ON A RETURN FILED WITH THE COMMISSIONER WITHIN THREE YEARS FROM THE TIME THAT A RETURN WOULD HAVE BEEN REQUIRED TO BE FILED PURSUANT TO SUCH SECTION HAD SUCH QUALIFIED TAXPAYER HAD A TAXABLE YEAR ENDING ON DECEMBER THIRTY-FIRST. RETURNS SHALL BE IN SUCH FORM AS PRESCRIBED BY THE COMMISSIONER. A QUALIFIED TAXPAYER MUST PROVIDE ANY INFORMATION THE COMMISSIONER DEEMS NECESSARY TO DETERMINE THE CREDIT ALLOWED. (B) IF MORE THAN ONE QUALIFIED TAXPAYER PAYS RENT FOR THE SAME PRIMARY RESIDENCE AND HAS A FEDERAL ADJUSTED GROSS INCOME FOR WHICH A CREDIT WOULD OTHERWISE BE DUE, EACH SUCH QUALIFIED TAXPAYER SHALL DIVIDE THE BASE AMOUNT OF THE CREDIT ALLOWED FOR HIS OR HER INCOME LEVEL BY THE TOTAL NUMBER OF INDIVIDUALS OR MARRIED COUPLES FILING A JOINT RETURN WHO ARE PAYING THE RENT, WHETHER OR NOT ELIGIBLE FOR A CREDIT, TO DETERMINE THE AMOUNT OF CREDIT ALLOWED TO THAT QUALIFIED TAXPAYER. ANY ADDITIONAL AMOUNT OF CREDIT DETERMINED BASED ON THE NUMBER OF EXEMPTIONS CLAIMED BY SUCH TAXPAYER SHALL NOT BE SO DIVIDED. (C) A QUALIFIED TAXPAYER SHALL BE ALLOWED THE CREDIT UNDER THIS SUBSECTION OR THE CREDIT UNDER SUBSECTION (E) OF THIS SECTION, WHICHEVER IS THE HIGHER AMOUNT. (3) (A) FOR ANY QUALIFIED TAXPAYER WHO IS SIXTY-FIVE YEARS OF AGE OR OLDER WITH A FILING STATUS OF SINGLE, THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS PARAGRAPH SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLES: FOR TAXABLE YEARS BEGINNING IN 2014, IF FEDERAL ADJUSTED GROSS INCOME IS: THE CREDIT SHALL BE: $25,000 OR LESS $110 OVER $25,000 BUT NOT OVER $40,000 $90 OVER $40,000 BUT NOT OVER $50,000 $70 FOR TAXABLE YEARS BEGINNING IN OR AFTER 2015, IF FEDERAL ADJUSTED GROSS INCOME IS: THE CREDIT SHALL BE: $25,000 OR LESS $220 OVER $25,000 BUT NOT OVER $40,000 $180 OVER $40,000 BUT NOT OVER $50,000 $140
(B) FOR ANY OTHER QUALIFIED TAXPAYER, THE AMOUNT OF THE CREDIT ALLOWED PURSUANT TO THIS PARAGRAPH SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING TABLES; PROVIDED, HOWEVER, THAT A QUALIFIED TAXPAYER WHO IS A MARRIED INDIVIDUAL FILING A SEPARATE NEW YORK INCOME TAX RETURN SHALL RECEIVE ONE-HALF OF THE BASE AMOUNT OF THE CREDIT PLUS ANY ADDITIONAL AMOUNT FOR WHICH SUCH TAXPAYER WOULD BE ELIGIBLE BASED ON THE INCOME AND NUMBER OF EXEMPTIONS CLAIMED BY SUCH TAXPAYER: FOR TAXABLE YEARS BEGINNING IN 2014, IF FEDERAL ADJUSTED GROSS INCOME IS: THE CREDIT SHALL BE: $25,000 OR LESS $80 PLUS AN AMOUNT EQUAL TO $35 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $25,000 BUT NOT OVER $45,000 $65 PLUS AN AMOUNT EQUAL TO $24 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $45,000 BUT NOT OVER $65,000 $55 PLUS AN AMOUNT EQUAL TO $12 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL
INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $65,000 BUT NOT OVER $100,000 $45 PLUS AN AMOUNT EQUAL TO $12 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE FOR TAXABLE YEARS BEGINNING IN OR AFTER 2015, IF FEDERAL ADJUSTED GROSS INCOME IS: THE CREDIT SHALL BE: $25,000 OR LESS $160 PLUS AN AMOUNT EQUAL TO $70 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $25,000 BUT NOT OVER $45,000 $130 PLUS AN AMOUNT EQUAL TO $48 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $45,000 BUT NOT OVER $65,000 $110 PLUS AN AMOUNT
EQUAL TO $24 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE OVER $65,000 BUT NOT OVER $100,000 $90 PLUS AN AMOUNT EQUAL TO $24 MULTIPLIED BY A NUMBER WHICH IS ONE LESS THAN THE NUMBER OF EXEMPTIONS FOR WHICH THE TAXPAYER (OR IN THE CASE OF A MARRIED COUPLE FILING A JOINT RETURN, TAXPAYERS) IS ENTITLED TO A DEDUCTION FOR THE TAXABLE YEAR FOR FEDERAL INCOME TAX PURPOSES UNDER SUBSECTIONS (B) AND (C) OF SECTION 151 OF THE INTERNAL REVENUE CODE S 2. This act shall take effect immediately.

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