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A05323 Summary:

A05323 Actions:

A05323 Committee Votes:

A05323 Floor Votes:

There are no votes for this bill in this legislative session.

A05323 Memo:

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.

A05323 Text:

 
                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.
                                                                   LBD08059-01-9
        A. 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.

A05323 LFIN:

 
NO LFIN