NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7652
SPONSOR: Stern TITLE OF BILL:
An act to amend the tax law, in relation to the real property tax
circuit breaker credit
PURPOSE OR GENERAL IDEA OF BILL::
To amend Section 606 (e) of the Tax Law to increase income, rent and
home value criteria for purposes of qualifying for the Claim for Real
Property Tax Credit for Homeowner and Renters (IT-214) also known as
"Circuit Breaker."
SUMMARY OF PROVISIONS::
Section 1: amends subparagraph (E) of paragraph 1 and paragraphs 3 and 7
of the subsection (e) of section 606 of the tax law, as amended by chap-
ter 28 of the laws of 1987 and subparagraph (E) of paragraph 1 as
amended by chapter 105 of the laws of 2006.
Section 2: sets the effective date.
JUSTIFICATION:
In 1978, the Legislature enacted the refundable Claim for Real Property
Tax Credit for Homeowners and Renters, also known as "Circuit Breaker,"
to help senior citizens and households with moderate incomes cope with
increasingly high property tax costs be it on their homes or incorpo-
rated in one's rent. Unfortunately, the qualifying criteria for this
credit have not been adjusted in 40 years. As a result, numerous house-
holds have been denied the credit because income, taxes and rents have
far surpassed the value of the limits set in 1978.
Although there are still some taxpayers who qualify for the current
credit, statistics compiled by the Department of. Taxation and Finance
indicate that the number of households eligible for the credit has
dropped significantly. In 1996, 517,116 refundable credits were issued.
In 2010, the number of credits had dropped to 209,691 and in 2017, the
number fell to 172,031.
Thousands of homeowners and renters across the state were no longer able
to take advantage of the Claim for Real Property Tax Credit for Homeown-
ers and Renters (IT-214) because of the $18,000 income cap, $425 rent
cap, $85,000 home value cap and a maximum refund of $375 for persons 65
years of age and older and $75 for persons under 65.
Meanwhile, the New York City Enhanced Real Property Tax Credit (Section
606(e-1) of the Tax Law) was established in 2013 with an income thresh-
old of $200,000, no rental or home value cap and a maximum credit of
$500.
The IT-214 or "Circuit Breaker" credit was intended to ease the property
tax burden on homeowners and renters. This bill continues that legisla-
tive intent, maintains the original sliding scale credit formula for
seniors and non-seniors and upgrades the eligibility criteria to reflect
current market rates for housing and rental units. The gross household
income would increase from $18,000 to $100,000; the market value of a
home would increase from $85,000 to $150,000; and the maximum rent would
increase from $425 to $1,000. The amount of the credit would remain the
same with the maximum credit for those 65 years of age or older set at
$375 and the maximum credit for non-seniors set at $75. Enhancing the
IT-214 or "Circuit Breaker" credit so that it is available to more
households comes at a time when housing costs continue to rise. In June
2019, the State Comptroller released a report, "Housing Affordability in
New York State," and noted the following:
"In 2017, almost half of New York State's rental households and more
than one in four homeowners faced housing costs above the affordability
threshold of 30 percent of household income. On the national level, New
York had among the highest percentages of homeowners and renters above
the affordability and severe housing cost burden thresholds. New York's
rankings among all states for these housing affordability metrics dete-
riorated for renters and homeowners alike from 2008 to 2017."
PRIOR LEGISLATIVE HISTORY::
2023-2024: A3442 - referred to ways and means
2021-2022: A6516 - referred to ways and means
2019-2020: A8333 - referred to ways and means
FISCAL IMPLICATIONS::
To be determined.
EFFECTIVE DATE::
This act shall take effect immediately.
