S T A T E O F N E W Y O R K
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7047
2013-2014 Regular Sessions
I N A S S E M B L Y
April 30, 2013
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Introduced by M. of A. TEDISCO -- read once and referred to the Commit-
tee on Ways and Means
AN ACT to amend the tax law, in relation to establishing a tax credit
for low income individuals subject to the federal self-employment tax
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature recognizes the need to
alleviate the tax burden of low income individual taxpayers whose income
is largely derived from self-employment and therefore affected by feder-
al self-employment taxes to a degree disproportionate with such taxpay-
ers' level of disposable income. This circumstance hinders many newly
started businesses in the state. Therefore, this act provides a state-
level credit to provide relief to these taxpayers.
S 2. Section 606 of the tax law is amended by adding a new subsection
(ww) to read as follows:
(WW) SELF-EMPLOYED TAXPAYER CREDIT. (1) GENERAL. A QUALIFIED SELF-EM-
PLOYED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY
THIS ARTICLE EQUAL TO TWENTY-FIVE PERCENT OF HIS OR HER FEDERAL SELF-EM-
PLOYMENT TAX LIABILITY FOR THE YEAR, BUT NOT EXCEEDING A MAXIMUM AMOUNT
OF FIVE HUNDRED DOLLARS, AND SUBJECT TO PHASE-OUT AS PROVIDED UNDER
PARAGRAPH THREE OF THIS SUBSECTION.
(2) DEFINITION OF "QUALIFIED SELF-EMPLOYED TAXPAYER". A QUALIFIED
SELF-EMPLOYED TAXPAYER IS AN INDIVIDUAL TAXPAYER, WHOSE FEDERAL GROSS
INCOME FOR THE TAX YEAR IS BELOW FORTY THOUSAND DOLLARS, AND WHOSE BUSI-
NESS INCOME IN THE YEAR IS AN AMOUNT OF AT LEAST SEVENTY PERCENT OF HIS
OR HER FEDERAL GROSS INCOME. BUSINESS ENTITIES SHALL NOT BE QUALIFIED.
(3) MAXIMUM CREDIT PHASE-OUT. THE MAXIMUM ALLOWED CREDIT OF FIVE
HUNDRED DOLLARS SHALL BE REDUCED DOLLAR FOR DOLLAR FOR EACH DOLLAR
BEYOND THIRTY-NINE THOUSAND FIVE HUNDRED DOLLARS OF FEDERAL GROSS
INCOME, SUCH THAT THE CREDIT IS COMPLETELY PHASED OUT UPON REACHING
FORTY THOUSAND DOLLARS OF FEDERAL GROSS INCOME.
S 3. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2014.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09418-02-3