NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4340A
SPONSOR: Schimminger (MS) 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 refund-
able credit for low-income working individuals and families, from 30% of
the federal credit to 32.5% for the taxable year beginning in 2016 and
35% for taxable years beginning in 2017.
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 2016 and 35% for taxable years beginning in
2017.
§ 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 2016 and 35% for taxable years
beginning in 2017, thus helping low-income working individuals and fami-
lies.
PRIOR LEGISLATIVE HISTORY:
2013-2014: A.4280;
2011-2012: A.9542.
FISCAL IMPLICATIONS:
Implementation of the full 5% increase would be approximately $160
million ($80 million in 2016 and $80 million in 2017), 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.
STATE OF NEW YORK
________________________________________________________________________
4340--A
2015-2016 Regular Sessions
IN ASSEMBLY
January 30, 2015
___________
Introduced by M. of A. SCHIMMINGER, BENEDETTO, CRESPO, GANTT, LAVINE,
CAHILL, WEPRIN, AUBRY, WRIGHT -- Multi-Sponsored by -- M. of A. BRAUN-
STEIN, BRENNAN, COLTON, GLICK, GOTTFRIED, HIKIND, PERRY, THIELE --
read once and referred to the Committee on Ways and Means -- recommit-
ted to the Committee on Ways and Means in accordance with Assembly
Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
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:
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.
9 The applicable percentage shall be (i) seven and one-half percent for
10 taxable years beginning in nineteen hundred ninety-four, (ii) ten
11 percent for taxable years beginning in nineteen hundred ninety-five,
12 (iii) twenty percent for taxable years beginning after nineteen hundred
13 ninety-five and before two thousand, (iv) twenty-two and one-half
14 percent for taxable years beginning in two thousand, (v) twenty-five
15 percent for taxable years beginning in two thousand one, (vi) twenty-
16 seven and one-half percent for taxable years beginning in two thousand
17 two, [and] (vii) thirty percent for taxable years beginning in two thou-
18 sand three and before two thousand sixteen, (viii) thirty-two and one-
19 half percent for taxable years beginning in two thousand sixteen, and
20 (ix) thirty-five percent for taxable years beginning in two thousand
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08097-03-6
A. 4340--A 2
1 seventeen and thereafter. Provided, however, that if the reversion
2 event, as defined in this paragraph, occurs, the applicable percentage
3 shall be twenty percent for taxable years ending on or after the date on
4 which the reversion event occurred. The reversion event shall be deemed
5 to have occurred on the date on which federal action, including but not
6 limited to, administrative, statutory or regulatory changes, materially
7 reduces or eliminates New York state's allocation of the federal tempo-
8 rary assistance for needy families block grant, or materially reduces
9 the ability of the state to spend federal temporary assistance for needy
10 families block grant funds for the earned income credit or to apply
11 state general fund spending on the earned income credit toward the
12 temporary assistance for needy families block grant maintenance of
13 effort requirement, and the commissioner of the office of temporary and
14 disability assistance shall certify the date of such event to the
15 commissioner of taxation and finance, the director of the division of
16 the budget, the speaker of the assembly and the temporary president of
17 the senate.
18 § 2. This act shall take effect immediately.
