A02533 Summary:

BILL NOA02533
 
SAME ASSAME AS S00537
 
SPONSORFahy
 
COSPNSRHevesi, Barron, Englebright, Thiele, Stern, Simon, Rivera JD, Dickens, Jackson, Burdick, Lunsford, Solages, McDonald, Gottfried, Rivera J, Dinowitz, Lupardo, Bronson, Gallagher, Gonzalez-Rojas, Forrest, Cruz, Wallace, Clark, Sillitti, Meeks, Glick, Ramos, Darling, Mitaynes, Jean-Pierre
 
MLTSPNSR
 
Amd 606, add 679, Tax L
 
Provides for the advance payment of the earned income tax credit to qualifying employees.
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A02533 Actions:

BILL NOA02533
 
01/19/2021referred to ways and means
01/05/2022referred to ways and means
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A02533 Committee Votes:

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A02533 Floor Votes:

There are no votes for this bill in this legislative session.
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A02533 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2533
 
SPONSOR: Fahy
  TITLE OF BILL: An act to amend the tax law, in relation to providing for the advance payment of the earned income tax credit   SUMMARY OF PROVISIONS: Section 1 amends subsection (d) of section 606 of the tax law. The law is amended to expand the income eligibility for the New York Earned Income Tax Credit. Section 2 adds new section 679 to the tax law. This section provides for the advance payment of the earned income credit. Section 3 sets the effective date.   JUSTIFICATION: The Earned Income Tax Credit has consistently proven one of the most effective methods by which governments can reward work and alleviate poverty. This legislation builds on the success of the New York Earned Income Credit by increasing the value of the credit, expanding who is eligible to receive the credit, and creating an option for recipients of the credit to receive payments quarterly. The EITC is designed to reward work, its value growing with a recipi- ent's earnings. In the 1990s the EITC was credited as being the single largest factor encouraging single mothers to return to work, and this matters for children. Research has shown that lifting the income of low-income families while a child is leads to better health outcomes, more educational exposure and higher earnings in adulthood. This bill recognizes that the COVID-19 Pandemic has pushed many middle- class families to the brink of financial catastrophe and expands eligi- bility for the EITC to provide a measure of financial security for those making more than poverty wages. This bill also expands eligibility for those who do not have children, those aged 18-24, and those who do not have a social security number but pay taxes. These measures address important inadequacies in the federal EITC and will provide a measure of financial security for a large swatch of low-income New Yorkers.   LEGISLATIVE HISTORY: A10775 2019-20   EFFECTIVE DATE: This act shall take effect immediately.
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A02533 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          2533
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 19, 2021
                                       ___________
 
        Introduced by M. of A. FAHY, HEVESI, BARRON, ENGLEBRIGHT, THIELE, STERN,
          SIMON -- 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 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-one 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-one
    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-one and thereafter.
    23    The applicable percentage shall be (i) seven and one-half percent  for
    24  taxable  years  beginning  in  nineteen  hundred  ninety-four,  (ii) ten
    25  percent for taxable years beginning  in  nineteen  hundred  ninety-five,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04856-01-1

        A. 2533                             2
 
     1  (iii)  twenty percent for taxable years beginning after nineteen hundred
     2  ninety-five and  before  two  thousand,  (iv)  twenty-two  and  one-half
     3  percent  for  taxable  years  beginning in two thousand, (v) twenty-five
     4  percent  for  taxable  years beginning in two thousand one, (vi) twenty-
     5  seven and one-half percent for taxable years beginning in  two  thousand
     6  two, [and] (vii) thirty percent for taxable years beginning in two thou-
     7  sand  three,  (viii)  thirty-five percent for taxable years beginning in
     8  two thousand twenty-one, and (ix) forty percent for taxable years begin-
     9  ning in two thousand twenty-two  and  thereafter.    For  taxable  years
    10  beginning  in  two thousand twenty-one and thereafter, in the case of an
    11  eligible individual with no qualifying children, the  credit  percentage
    12  shall  be fifteen and three-tenths to determine the amount of the earned
    13  income tax credit referenced in section 32(b)(1) of the internal revenue
    14  code and the earned income amount and the phaseout amount of such  indi-
    15  vidual  shall be determined as if such earned income amount and phaseout
    16  amount as referenced in section 32(b)(2)(A) of the internal revenue code
    17  are equal to the amount allowed for  an  eligible  individual  with  one
    18  qualifying  child  as  such  amounts  are  referenced in such paragraph.
    19  Provided further, for the purpose of this subsection, an eligible  indi-
    20  vidual  shall be an individual who has attained nineteen years of age as
    21  opposed to twenty-five years of age,  irrespective  of  the  eligibility
    22  referenced  in section 32(c)(1)(A)(ii)(II) of the internal revenue code.
    23  Furthermore, an individual otherwise eligible but  for  the  requirement
    24  under  section  32(m) of the internal revenue code shall be eligible for
    25  this credit. Provided, however, that if the reversion event, as  defined
    26  in  this  paragraph,  occurs,  the applicable percentage shall be twenty
    27  percent for taxable years ending on or  after  the  date  on  which  the
    28  reversion  event  occurred.  The reversion event shall be deemed to have
    29  occurred on the date on which federal action, including but not  limited
    30  to,  administrative, statutory or regulatory changes, materially reduces
    31  or eliminates New York  state's  allocation  of  the  federal  temporary
    32  assistance  for  needy  families  block grant, or materially reduces the
    33  ability of the state to spend federal  temporary  assistance  for  needy
    34  families  block  grant  funds  for  the earned income credit or to apply
    35  state general fund spending on  the  earned  income  credit  toward  the
    36  temporary  assistance  for  needy  families  block  grant maintenance of
    37  effort requirement, and the commissioner of the office of temporary  and
    38  disability  assistance  shall  certify  the  date  of  such event to the
    39  commissioner of taxation and finance, the director of  the  division  of
    40  the  budget,  the speaker of the assembly and the temporary president of
    41  the senate.
    42    § 2. The tax law is amended by adding a new section  679  to  read  as
    43  follows:
    44    §  679.  Advance  payment  of  earned income credit. (a) General rule.
    45  Except as otherwise provided in this  chapter,  the  commissioner  shall
    46  provide  for  the  prepayment  of the earned income credit to qualifying
    47  employees.
    48    (b) Earned income eligibility certificate. For purposes of this  arti-
    49  cle,  an  earned income eligibility certificate is a statement furnished
    50  by an employee to the commissioner which:
    51    (1) certifies that the employee will be eligible to receive an  earned
    52  income  credit  or an enhanced earned income credit provided pursuant to
    53  subsection (d) or (d-1) of section six hundred six of this  article  for
    54  the taxable year;

        A. 2533                             3
 
     1    (2)  certifies that the employee does not have an earned income eligi-
     2  bility certificate in effect for the taxable year with  respect  to  the
     3  payment of wages by another employer; and
     4    (3)  states  whether the employee's spouse has an earned income eligi-
     5  bility certificate in effect. For purposes of this  section,  a  certif-
     6  icate  shall  be  treated as being in effect with respect to a spouse if
     7  such certificate will be in effect on  the  first  status  determination
     8  date following the date on which the other eligible spouse furnishes the
     9  statement in question.
    10    (c) Earned income advance amount. Four advanced payments shall be made
    11  to  such  qualifying  employees. An estimated annual tax credit shall be
    12  determined by the commissioner in advance of the first payment and shall
    13  be subject to adjustment due to changes in employment or  family  status
    14  over  the  course  of  the year. Prior to disbursement, the commissioner
    15  shall ensure that the qualifying employee's status has not changed.  The
    16  first  three advanced payments shall be made during the taxable year and
    17  shall be twenty percent of the anticipated credit. The  fourth  advanced
    18  payment  shall  be made after the tax year is over and shall be adjusted
    19  to match the actual credit due eligible. Such  payments  shall,  to  the
    20  extent  practicable,  be made available via direct deposit and via elec-
    21  tronic benefit transfer (EBT) card.
    22    (d) Form and contents  of  certificate.    Earned  income  eligibility
    23  certificates  shall  be in such form and contain such information as the
    24  commissioner may determine and prescribe.
    25    (e) Notification. (1) The commissioner shall notify all taxpayers  who
    26  have received a refund of the credit pursuant to subsection (d) or (d-1)
    27  of  section six hundred six of this article based on the most recent tax
    28  return or record in writing of the availability of earned income advance
    29  amounts under this section.  Such  written  or  electronic  notification
    30  shall include a clearly labeled section or withholding forms and a sepa-
    31  rate  handout  with information about the advanced payment of the earned
    32  income credit in the six most common languages spoken by individuals  in
    33  this state.
    34    (2)  The commissioner shall provide information of the availability of
    35  earned income advance amounts  under  this  section  to  tax  preparers,
    36  accountants  and  organizations  that assist individuals in tax prepara-
    37  tion.  Such information shall be distributed to qualifying individuals.
    38    (f) Coordination with advance payments of earned income credit. (1) If
    39  any payment is made to the  individual  by  the  department  under  this
    40  section  during  any  calendar year, the tax imposed by this chapter for
    41  the individual's last taxable year beginning in such calendar year shall
    42  be increased by the aggregate amount of such payments.
    43    (2) If an individual establishes that he  or  she  is  requesting  and
    44  receiving payments under this section in good-faith by establishing that
    45  he or she properly claimed payments under this section in the prior year
    46  and  that  he or she has not experienced a substantial change in circum-
    47  stances such that he or she has a reasonable expectation of  eligibility
    48  in  the  current  year,  then paragraph one of this subsection shall not
    49  apply.
    50    (3) Any increase in tax under this subsection shall not be treated  as
    51  tax  imposed  by  this chapter for purposes of determining the amount of
    52  any credit, other than the credit allowed by subsection (d) or (d-1)  of
    53  section six hundred six of this article, allowable under this article.
    54    § 3. This act shall take effect immediately and shall apply to taxable
    55  years beginning on or after January 1, 2021.
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A02533 LFIN:

 NO LFIN
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A02533 Chamber Video/Transcript:

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