NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9102
SPONSOR: Kolb TITLE OF BILL: An act to amend the tax law, in relation to calcu-
lation of the earned income credit
PURPOSE OR GENERAL IDEA OF BILL:
New York State was an early implementer of a State Earned Income Tax
Credit (EITC) program and offers one of the largest fully refundable
supplemental credits in the nation. Initially set at 7.5 percent of the
federal credit in 1994, the New York State supplement to the federal
EITC has been raised six times since then, reaching 30 percent of the
federal EITC in 2003. This bill would expand the New York State value of
the EITC from 30 percent to 45 percent of the federal amount.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends the Tax Law by increasing the percentage of Earned
Income Tax Credit to 45 percent.
Section 2 authorizes this act to take effect immediately and apply to
taxable years on and after January 1, 2016.
JUSTIFICATION:
Recently in New York, discussions of raising the minimum wage have been
higher than ever. At first glance, a wage increase seems incredibly
beneficial for these individuals; however this is not the case. Being
mandated to pay workers higher wages would be unaffordable for many
businesses and would result in a significant amount of lay-offs for
these low-income taxpayers.
Expanding the Earned Income Tax Credit (EITC) is a much better alterna-
tive because it would put more money in the taxpayers' pockets, boost
the economy and create employment opportunities for the unemployed.
Reports have suggested that expanding the EITC would lead to 14,000
jobless New Yorkers getting back to work, many of those being single
mothers.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This bill would increase economic activity in New York State, increase
low-income family's incomes and reduce State tax revenue.
EFFECTIVE DATE:
This act takes effect immediately and applies to taxable years beginning
on and after January 1, 2016.
