NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2498
SPONSOR: Ra TITLE OF BILL:
An act to amend the tax law, in relation to increasing the earned income
tax credit
PURPOSE OR GENERAL IDEA OF BILL:
To increase the State Earned Income Tax Credit amount from 30% of the
Federal credit amount to 45% and to allow taxpayers the option to
receive advance payments of their expected credit amount.
SUMMARY OF PROVISIONS:
Section 1: Increases the State Earned Income Tax Credit from 30% to 45%
of the Federal credit amount for taxable years beginning on or after
2024.
Section 2: Allows taxpayers to• make an election to receive three quar-
terly advanced equal payments of expected credit amounts between $200
and $2,400, or equal monthly advanced payments for credit amounts in
excess of $2,400.
Section 3: Sets forth the effective date.
JUSTIFICATION:
Expanding the Earned Income Tax* Credit (EITC) provides an incentive for
taxpayers to continue to work, a choice made difficult for some families
struggling with child care affordability. Increasing the State's EITC to
45% of a taxpayer's Federal EITC amount would provide crucial support
for families facing financial challenges. Additionally, allowing
taxpayers the ability to elect to receive quarterly or monthly advanced
payments is evidenced to have a substantial, positive impact on low-in-
come families. As shown by the impact of the enhanced Federal Child Tax
Credit implemented in 2021, advanced payments of tax credits provide
flexibility to taxpayers who may face difficulty affording the essen-
tials.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Approximately $386 million in loss of tax revenue.
LEGISLATIVE HISTORY:
A.9258 (2024) - referred to Ways and Means
EFFECTIVE DATE:
This Act shall take effect 120 days after enactment.
