|SAME AS||No Same As|
|MLTSPNSR||Arroyo, Davila, Goodell, Pichardo, Ramos, Rivera, Rodriguez|
|Amd §686, Tax L|
|Authorizes and directs the commissioner of taxation and finance to conduct a feasibility and impact study on monthly payments of the earned income tax credit; provides for the installment payment for the earned income credit.|
|02/08/2019||referred to ways and means|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5323 SPONSOR: Crespo (MS)
TITLE OF BILL: An act to amend the tax law, in relation to install- ment payments for the earned income credit; and to authorize and direct the commissioner of taxation and finance to conduct a feasibility and impact study on monthly payments of the earned income tax credit   PURPOSE OR GENERAL IDEA OF THE BILL: The purpose of this legislation is to study and require that the earned income tax credit be paid in monthly installments to avoid binge spend- ing and compensatory spending habits while facilitating the development of a regular monthly budget leading to fewer financial emergencies for the working poor.   SUMMARY OF SPECIFIC PROVISIONS: Section 1. The commissioner of taxation and finance is hereby authorized and directed to study and report on the feasibility and impact of using an installment payment plan for earned income credits. Report shall include detailed required information. Section 2 of the bill amends section 686 of the Tax Law by adding a new subsection U) to require that earned income tax credits that exceed $200 be paid in monthly installments of at least.$200. Section 2 of the bill would make the bill effective 180 days after it becomes law, and would empower the commissioner of taxation and finance to promulgate regulations necessary for its implementation.   JUSTIFICATION: Poverty is pervasive in New York State and the hardest impacted communi- ties are minority and rural. From the highest rates of child poverty in the nation in some upstate cities to almost 60% of Latino elderly , living in economic insecurity, the proliferation of indigence has become a significant threat to the economic development of these communities and impairment to the economic mobility of its residents. Federal and State fiscal policy is critically important to creating avenues for escape from poverty. The Earned Income Tax Credit (EITC) is a successful policy recognized in fighting poverty. Unfortunately, currently EITC is paid out in one lump sum with some recipients receiving over $11,000 as a onetime payment. In the meantime, these same recipients are falling behind on rent payments, facing eviction, facing food shortages and insecurity, unable to pay for medi- cine or health care and destroying their credit scores. It would help these families tremendously if their EITC payment would be provided over a 12 month period via equal monthly payments. This simple action by New York State government would provide for a more stable financial and living environment for the millions of families now receiving EITC. The Assembly Puerto Rican/Hispanic Task Force reports on child and elderly poverty released in early 2015 initiated the collaboration of three Assembly Standing Committees via a three statewide hearings and a roundtable discussion with experts on public policy initiatives to help combat poverty and its corrosive effects on families, children and the elderly. This is one such proposal from a year-long work with the Committees on Children and Families, the Aging, and Social Services. The EITC and CTC are vital to the financial security of New York's work- ing families. *The EITC and CTC are critical to working families in New York; in 2013, more than 2.8 million households received the EITC or the Child Tax Credit (CTC). *The EITC and CTC lifted 597,000 New Yorkers, including 307,000 chil- dren, out of poverty each year from 2011-13 *Additionally, the EITC added an estimated $4.0 billion into New York's economy in 2012. *Of the 8.6 million households in New York receiving tax returns, 1.8 million households received the EITC and 2.9 million received the CTC. *755,000 New York families with more than one million children received a total of $809 million in tax credits for both EITC and (CTC). If this money could reach households on a regular monthly basis rather than as a lump sum, the benefits to these families and New Yorkers would be posi- tively transformative.   PRIOR LEGISLATIVE HISTORY: New Bill in 2015, Assembly bill 9099. Died in Ways and Means Committee. BILL NO A05158A 02/06/2017 referred to ways and means 01/03/2018 referred to ways and means 02/13/2018 amend (t) and recommit to ways and means 02/13/2018 print number 5158a   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT: The bill would result in lower government expenditures for emergency financial assistance such as emergency housing, emergency food assist- ance, heating assistance and other emergencies by providing increasing the monthly income of the working poor.   EFFECTIVE DATE: The bill would become effective 180 days after enactment.
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STATE OF NEW YORK ________________________________________________________________________ 5323 2019-2020 Regular Sessions IN ASSEMBLY February 8, 2019 ___________ Introduced by M. of A. CRESPO -- Multi-Sponsored by -- M. of A. ARROYO, DAVILA, GOODELL, PICHARDO, RAMOS, RIVERA, RODRIGUEZ -- read once and referred to the Committee on Ways and Means AN ACT to amend the tax law, in relation to installment payments for the earned income credit; and to authorize and direct the commissioner of taxation and finance to conduct a feasibility and impact study on monthly payments 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. The commissioner of taxation and finance is hereby author- 2 ized and directed to study and report on the feasibility and impact of 3 using an installment payment plan for earned income credits. Such 4 commissioner shall include in the study and subsequent report a detailed 5 analysis of a plan where an earned income tax credit pursuant to 6 subsection (d) of section 606 of the tax law or an enhanced earned 7 income tax credit pursuant to subsection (d-1) of section 606 of the tax 8 law is distributed to the taxpayer as follows: (i) for amounts equal to 9 or less than two hundred dollars, the payment or refund shall be made in 10 a lump sum, (ii) for amounts in excess of two hundred dollars and less 11 than two thousand four hundred dollars, the payment or refund shall be 12 two hundred dollars a month for the number of months equal to the total 13 amount thereof divided by two hundred and rounded down to the nearest 14 whole number, and the remaining balance of such payment or refund shall 15 be made in the first month thereafter, and (iii) for amounts equal to or 16 greater than two thousand four hundred dollars, the payment or refund 17 shall be paid in equal monthly payments equal to the total amount there- 18 of divided by twelve. The commissioner of taxation and finance shall 19 prepare a report on his or her findings to be submitted to the temporary 20 president of the senate, the speaker of the assembly and the chairs of 21 the assembly ways and means committee and the senate finance committee 22 within 180 days after the effective date of this act. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08059-01-9A. 5323 2 1 § 2. Section 686 of the tax law is amended by adding a new subsection 2 (j) to read as follows: 3 (j) Earned income tax credit.-- An earned income tax credit pursuant 4 to subsection (d) of section six hundred six of this article or an 5 enhanced earned income tax credit pursuant to subsection (d-1) of 6 section six hundred six of this article shall be paid to the taxpayer as 7 follows: (i) for amounts equal to or less than two hundred dollars, the 8 payment or refund shall be made in a lump sum, (ii) for amounts in 9 excess of two hundred dollars and less than two thousand four hundred 10 dollars, the payment or refund shall be two hundred dollars a month for 11 the number of months equal to the total amount thereof divided by two 12 hundred and rounded down to the nearest whole number, and the remaining 13 balance of such payment or refund shall be made in the first month ther- 14 eafter, and (iii) for amounts equal to or greater than two thousand four 15 hundred dollars, the payment or refund shall be paid in equal monthly 16 payments equal to the total amount thereof divided by twelve. 17 § 3. This act shall take effect immediately; provided, however, that 18 section two of this act shall take effect one year after it shall have 19 become a law. Effective immediately, the commissioner of taxation and 20 finance is authorized to make any addition, amendment and/or repeal of 21 any rule or regulation necessary for the implementation of this act on 22 its effective date on or before such date.
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