A07486 Summary:

COSPNSRMontesano, Oaks, Butler, Hawley, Barclay, Murray, Ra, Stec
Amd S686, Tax L
Provides for the installment payment for the earned income credit.
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A07486 Actions:

05/13/2015referred to ways and means
01/06/2016referred to ways and means
03/28/2016held for consideration in ways and means
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A07486 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Goodell
  TITLE OF BILL: An act to amend the tax law, in relation to install- ment payment for the earned income credit   PURPOSE OR GENERAL IDEA OF THE BILL: The purpose of this legislation is to require that the earned income tax credit be paid in monthly installments to avoid binge spending and to facilitate the development of a regular monthly budget leading to fewer financial emergencies for the working poor.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill amends section 686 of the Tax Law by adding a new subsection (d) 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 120 days after it becomes law, and would empower the commissioner of taxation and finance to promulgate regulations necessary for its implementation.   JUSTIFICATION: Under current law, working poor are entitled to an earned income tax credit (EITC), which is a direct payment from the State of New York that supplements their prior income. The EITC is in addition to any tax refund, and acts in the same manner as a negative income tax that pays the working poor more in a "refund" than they paid in taxes. The EITC is paid in a lump sum in the same check as any regu- lar tax refund. Because the EITC is paid in a lump sum, it can encourage binge spending on nonessential amenities. For example, according to a 2009 consumption survey by the U.S. Department of Energy, one-third of those in poverty have a wide-screen plasma or LCD TV, one-third have more than one vehi- cle, one in seven have two or more computers, and more than half have video game systems. This bill would required the EITC to be paid in monthly installments, thus reducing its use for nonessential big-ticket items, encouraging responsible monthly budgeting, and making more funds available on a monthly basis for basic expenses. More responsible budgeting will assist the working poor in having the financial resources available on a month- ly basis to meet reoccurring expenses, will reduce the incidence of financial emergencies, and will assist in the successful transition to full independence. The regular tax refund would still be paid in a lump sum.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: The bill would result in lower government expenditures for emergency financial assistance (such as emergency HEAP or other emergency financial assistance) by increasing the effective monthly income of the working poor.   EFFECTIVE DATE: The bill would become effective 120 days after enact- ment.
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