senate Bill S1375A

2013-2014 Legislative Session

Provides that employers shall notify employees of potential state and federal earned income tax credits

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 28, 2014 print number 1375a
amend and recommit to investigations and government operations
Jan 08, 2014 referred to investigations and government operations
Jan 09, 2013 referred to investigations and government operations

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S1375 - Bill Details

See Assembly Version of this Bill:
A210A
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd §606, Tax L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S366A, A1810A
2009-2010: S4258B, A8177A

S1375 - Bill Texts

view summary

Provides that employers shall notify employees of potential state and federal earned income tax credits and delineates the contents, timing and manner of providing notice as well as options available to the employer.

view sponsor memo
BILL NUMBER:S1375

TITLE OF BILL:
An act
to amend the tax law, in relation to
requiring employers to provide
notice of potential eligibility for
federal and New York state earned
income tax credits

PURPOSE:
This bill would require employers to notify employees that they may be
eligible for a State or federal Earned Income Tax Credit (EITC).

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Tax Law § 606(d) (6) to provide
that: (1) employers with persons in their employ in New York State
for whom they must furnish an annual wage summary must furnish to
each such employee a notice that he or she may be eligible for a
State or federal EITC; (2) the Department of Taxation and Finance
shall promulgate guidance specifying the minimum requirements of such
notice; (3) such notice must be furnished with, or within one week
before or after, the annual wage summary; (4) such notice may be
provided by hand delivery, electronic or regular mail; and (5) the
employer may choose to provide notice only to those employees whose
gross incomes do not equal or exceed $60,000, or the maximum income
at which an employee may be eligible for the EITC, whichever is higher.

Section 2 of the bill would provide for an effective date of January
1, 2015.

EXISTING LAW:
26 V.S.C. § 32 authorizes a federal EITC for eligible individuals and
sets forth the amount of the credit.

Tax Law § 606(d) authorizes a State EITC for individuals who are
eligible for a federal EITC pursuant to 26 V.S.0 § 32, and provides
that the State EITC will be calculated at 30% of the federal EITC.

Tax Law § 606(d) 46) provides that the Commissioner of the Department
of Taxation and Finance must make efforts at least every three years
to notify individuals of their potential eligibility for an EITC.

JUSTIFICATION:
The federal EITC, enacted in 1975, is a refundable federal income tax
credit for low to moderate income working individuals and families.
The federal EITC was enacted in part to offset the burden of social
security taxes and to provide an incentive to work. The EITC can
result in a reduction of taxes owed, and when it exceeds the amount
of taxes owed, it results in a tax refund to those who claim and
qualify for the credit. New York State enacted a companion EITC in
1994, which is available to individuals who qualify for the federal
BITC and provides them with a State tax credit equal to 30 percent of
the applicable federal EITC.


Maximum credits range from $569 for an individual with no children to
as much as $6,217 for a married couple with two or more children. The
EITC is one of the most effective tools in helping people escape
poverty and transition from public assistance. For example, an
individual working full-time at $8.50 per hour and earning $17,000
per year could effectively realize more than a 25 percent increase in
income, or an effective hourly rate of $11.39, after receipt of the
state and federal EITC. The EITC, when coupled with other supports
available to low-income families, such food stamps and the low income
home energy assistance program, can lift them out of poverty and off
of public assistance.

Despite the effectiveness of this tool, it is estimated that as many
as 20 percent of those eligible do not claim the credit. To qualify,
taxpayers must meet certain requirements and file a tax return, even
if they did not earn enough money to be obligated to file a return.
This bill aims to ensure that all New York State taxpayers who are
potentially eligible are informed of the EITC at or near the time
that the annual wage statement is provided.

This bill also aims to give employers as much flexibility as possible
in the content, form, and breadth of distribution. For administrative
ease, many employers will choose to provide notice to all taxpayers;
however, employers will have the option of providing notice only to
those individuals whose gross annual incomes do not exceed $60,000 or
the maximum income at which an employee may be eligible for an EITC,
whichever is higher. In addition, employers will have the option of
providing notice by hand delivery, regular mail or electronically.

LEGISLATIVE HISTORY:
2011-2012: S.366-A - Died in Committee

FISCAL IMPLICATIONS:
There are no significant fiscal impacts associated with this proposal.

EFFECTIVE DATE:
This bill would take effect January 1, 2015.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1375

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sens.  MONTGOMERY,  SQUADRON  --  read twice and ordered
  printed, and when printed to be committed to the Committee on Investi-
  gations and Government Operations

AN ACT to amend the tax law,  in  relation  to  requiring  employers  to
  provide notice of potential eligibility for federal and New York state
  earned income tax credits

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 6 of subsection (d) of section  606  of  the  tax
law,  as  amended  by  section  3 of part V of chapter 60 of the laws of
2004, is amended to read as follows:
  (6) Notification.  (I) The commissioner shall  periodically,  but  not
less than every three years, make efforts to alert taxpayers that may be
currently eligible to receive the credit provided under this subsection,
and  the  credit  provided  under  any  local  law  enacted  pursuant to
subsection (f) of section thirteen hundred ten of this  chapter,  as  to
their  potential  eligibility.  In making the determination of whether a
taxpayer may be eligible for such credit,  the  commissioner  shall  use
such data as may be appropriate and available, including, but not limit-
ed  to,  data  available  from the United States Department of Treasury,
Internal Revenue Service and New  York  state  income  tax  returns  for
preceding tax years.
  (II) EXCEPT AS SET FORTH IN CLAUSE (D) OF THIS SUBPARAGRAPH, EMPLOYERS
WITH  PERSONS  IN  THEIR  EMPLOY  IN  NEW  YORK STATE FOR WHOM THEY MUST
PROVIDE AN ANNUAL WAGE SUMMARY SHALL EACH  YEAR  FURNISH  TO  EACH  SUCH
PERSON A NOTICE THAT HE OR SHE MAY BE ELIGIBLE FOR A STATE EARNED INCOME
TAX  CREDIT  PURSUANT TO THIS SUBSECTION AND A FEDERAL EARNED INCOME TAX
CREDIT PURSUANT TO SECTION THIRTY-TWO OF THE INTERNAL REVENUE CODE.  FOR
PURPOSES OF THIS SUBPARAGRAPH, EMPLOYER SHALL HAVE THE SAME  MEANING  AS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03096-01-3

S. 1375                             2

SET  FORTH IN SUBSECTION (A) OF SECTION THREE THOUSAND THREE HUNDRED SIX
OF THE INTERNAL REVENUE CODE.
  (A)  CONTENTS OF NOTICE. THE NEW YORK STATE DEPARTMENT OF TAXATION AND
FINANCE SHALL PROMULGATE GUIDANCE AS NECESSARY  SPECIFYING  THE  MINIMUM
REQUIREMENTS  OF SUCH NOTICE, WHICH WILL INCLUDE, BUT NOT BE LIMITED TO,
INFORMATION AS TO THE AVAILABILITY OF AND POTENTIAL ELIGIBILITY FOR  THE
FEDERAL  EARNED  INCOME  TAX CREDIT AND THE NEW YORK STATE EARNED INCOME
TAX CREDIT. SUCH NOTICE SHALL REFER PERSONS TO BOTH THE INTERNAL REVENUE
SERVICE AND THE NEW YORK STATE DEPARTMENT OF  TAXATION  AND  FINANCE  BY
TELEPHONE  AND  THROUGH  THEIR WEBSITES FOR INFORMATION REGARDING ANNUAL
ELIGIBILITY THRESHOLDS BY HOUSEHOLD TYPE, FILING REQUIREMENTS,  AND  HOW
TO OBTAIN NECESSARY FORMS AND INSTRUCTIONS.
  (B)  TIMING  OF NOTICE. THE EMPLOYER SHALL PROVIDE THE NOTICE REQUIRED
BY THIS SUBPARAGRAPH WITHIN ONE WEEK BEFORE OR AFTER,  OR  AT  THE  SAME
TIME,  THE  EMPLOYER PROVIDES THE ANNUAL WAGE SUMMARY, INCLUDING BUT NOT
LIMITED TO, A FORM W-2 OR A FORM 1099.  THE  NOTICE  SHALL  BE  PROVIDED
EITHER SEPARATELY OR AS PART OF THE ANNUAL WAGE SUMMARY.
  (C)  MANNER OF PROVIDING NOTICE. THE EMPLOYER SHALL PROVIDE THE NOTICE
REQUIRED BY THIS SUBPARAGRAPH TO EACH PERSON BY HAND DELIVERY, OR  ELEC-
TRONIC MAIL, OR BY MAIL TO THE LAST KNOWN ADDRESS.
  (D)  EMPLOYER'S  OPTION.  AT  THE  EMPLOYER'S OPTION, THE EMPLOYER MAY
CHOOSE TO PROVIDE THE NOTICE REQUIRED PURSUANT TO THIS SUBPARAGRAPH ONLY
TO THOSE EMPLOYEES WHOSE GROSS ANNUAL INCOMES DO  NOT  EQUAL  OR  EXCEED
SIXTY THOUSAND DOLLARS OR THE MAXIMUM INCOME AT WHICH AN EMPLOYEE MAY BE
ELIGIBLE FOR THE EARNED INCOME TAX CREDIT, WHICHEVER IS HIGHER.
  S 2. This act shall take effect January 1, 2015.

Co-Sponsors

S1375A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A210A
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd §606, Tax L
Versions Introduced in Previous Legislative Sessions:
2011-2012: S366A, A1810A
2009-2010: S4258B, A8177A

S1375A (ACTIVE) - Bill Texts

view summary

Provides that employers shall notify employees of potential state and federal earned income tax credits and delineates the contents, timing and manner of providing notice as well as options available to the employer.

view sponsor memo
BILL NUMBER:S1375A

TITLE OF BILL: An act to amend the tax law, in relation to requiring
employers to provide notice of potential eligibility for federal and
New York state earned income tax credits

PURPOSE: This bill would require employers to notify employees that
they may be eligible for a State or federal Earned Income Tax Credit
(EITC).

SUMMARY OF PROVISIONS:

Section 1 of the bill would amend Tax Law § 606(d) (6) to provide
that: (1) employers with persons in their employ in New York State for
whom they must furnish an annual wage summary must furnish to each
such employee a notice that he or she may be eligible for a State or
federal EITC; (2) one Department of Taxation and Finance shall
promulgate guidance specifying the minimum requirements of such
notice; (3) such notice must be furnished with, or within one week
before or after, the annual wage summary; (4) such notice may be
provided by hand delivery, electronic or regular mail; and (5) the
employer may choose to provide notice only to those employees whose
gross incomes do not equal or exceed $60,000, or the maximum income at
which an employee may be eligible for the EITC, whichever is higher.

Section 2 of the bill would provide for an effective date of January
1, 2016.

EXISTING LAW: 26 V.S.C. § 32 authorizes a federal EITC for eligible
individuals and sets forth the amount of the credit.

Tax Law § 606(d) authorizes a State EITC for individuals who are
eligible for a federal EITC pursuant to 26 V.S.O § 32, and provides
that the State EITC will be calculated at 30% of the federal EITC.

Tax Law § 606(d) (46) provides that the Commissioner of the Department
of Taxation and Finance must make efforts at least every three years
to notify individuals of their potential eligibility for an EITC.

JUSTIFICATION: The federal EITC, enacted in 1975, is a refundable
federal income tax credit for low to moderate income working
individuals and families. The federal EITC was enacted in part to
offset the burden of social security taxes and to provide an incentive
to work. The EITC can result in a reduction of taxes owed, and when it
exceeds the amount of taxes owed, it results in a tax refund to those
who claim and qualify for the credit. New York State enacted a
companion EITC in 1994, which is available to individuals who qualify
for the federal EITC and provides them with a State tax credit equal
to 30 percent of the applicable federal EITC.

Maximum credits range from $569 for an individual with no children to
as much as $6,217 for a married couple with two or more children. The
EITC is one of the most effective tools in helping people escape
poverty and transition from public assistance. For example, an
individual working full-time at $6.50 per hour and earning $17,000 per
year could effectively realize more than a 23 percent increase in
income, or an effective hourly rate of $11.39, after receipt of the


state and federal EITC. The EITC, when coupled with other supports
available to low-income families, such food stamps and the low income
home energy assistance program, can lift them out of poverty and off
of public assistance.

Despite the effectiveness at this tool, it is estimated that as many
as 20 percent of chose eligible do not claim the credit. To qualify,
taxpayers muse meet certain requirements and file a tax return, even
if they did not earn enough money to be obligated to file a return.
This bill aims to ensure that all New York State taxpayers who are
potentially eligible are informed of the EITC at or near the time that
the annual ware statement is provided.

This bill also aims to give employers as much flexibility as possible
in the content, form, and breadth of distribution. For administrative
ease, many employers will choose to provide notice to all taxpayers;
however, employers will have the option of providing notice only to
those individuals whose gross annual incomes do not exceed $60,000 or
the maximum income at which an employee may be eligible for an EITC,
whichever is higher. In addition, employers will have the option of
providing notice by hand delivery, regular mail or electronically.

LEGISLATIVE HISTORY: 2011-2012: S.366-A - Died in Committee; 2013:
Died in Committee

FISCAL IMPLICATIONS: There are no significant fiscal impacts
associated with, this proposal.

EFFECTIVE DATE: This bill would take effect January 1, 2016.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 1375--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sens.  MONTGOMERY,  SQUADRON  --  read twice and ordered
  printed, and when printed to be committed to the Committee on Investi-
  gations and Government Operations -- recommitted to the  Committee  on
  Investigations  and  Government  Operations  in accordance with Senate
  Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend  the  tax  law, in relation to requiring employers to
  provide notice of potential eligibility for federal and New York state
  earned income tax credits

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Paragraph  6  of subsection (d) of section 606 of the tax
law, as amended by section 3 of part V of chapter  60  of  the  laws  of
2004, is amended to read as follows:
  (6)  Notification.    (I) The commissioner shall periodically, but not
less than every three years, make efforts to alert taxpayers that may be
currently eligible to receive the credit provided under this subsection,
and the  credit  provided  under  any  local  law  enacted  pursuant  to
subsection  (f)  of  section thirteen hundred ten of this chapter, as to
their potential eligibility. In making the determination  of  whether  a
taxpayer  may  be  eligible  for such credit, the commissioner shall use
such data as may be appropriate and available, including, but not limit-
ed to, data available from the United  States  Department  of  Treasury,
Internal  Revenue  Service  and  New  York  state income tax returns for
preceding tax years.
  (II) EXCEPT AS SET FORTH IN CLAUSE (D) OF THIS SUBPARAGRAPH, EMPLOYERS
WITH PERSONS IN THEIR EMPLOY IN  NEW  YORK  STATE  FOR  WHOM  THEY  MUST
PROVIDE  AN  ANNUAL  WAGE  SUMMARY  SHALL EACH YEAR FURNISH TO EACH SUCH
PERSON A NOTICE THAT HE OR SHE MAY BE ELIGIBLE FOR A STATE EARNED INCOME
TAX CREDIT PURSUANT TO THIS SUBSECTION AND A FEDERAL EARNED  INCOME  TAX

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03096-02-4

S. 1375--A                          2

CREDIT PURSUANT TO SECTION THIRTY-TWO OF THE INTERNAL REVENUE CODE.  FOR
PURPOSES  OF  THIS SUBPARAGRAPH, EMPLOYER SHALL HAVE THE SAME MEANING AS
SET FORTH IN SUBSECTION (A) OF SECTION THREE THOUSAND THREE HUNDRED  SIX
OF THE INTERNAL REVENUE CODE.
  (A)  CONTENTS OF NOTICE. THE NEW YORK STATE DEPARTMENT OF TAXATION AND
FINANCE SHALL PROMULGATE GUIDANCE AS NECESSARY  SPECIFYING  THE  MINIMUM
REQUIREMENTS  OF SUCH NOTICE, WHICH WILL INCLUDE, BUT NOT BE LIMITED TO,
INFORMATION AS TO THE AVAILABILITY OF AND POTENTIAL ELIGIBILITY FOR  THE
FEDERAL  EARNED  INCOME  TAX CREDIT AND THE NEW YORK STATE EARNED INCOME
TAX CREDIT. SUCH NOTICE SHALL REFER PERSONS TO BOTH THE INTERNAL REVENUE
SERVICE AND THE NEW YORK STATE DEPARTMENT OF  TAXATION  AND  FINANCE  BY
TELEPHONE  AND  THROUGH  THEIR WEBSITES FOR INFORMATION REGARDING ANNUAL
ELIGIBILITY THRESHOLDS BY HOUSEHOLD TYPE, FILING REQUIREMENTS,  AND  HOW
TO OBTAIN NECESSARY FORMS AND INSTRUCTIONS.
  (B)  TIMING  OF NOTICE. THE EMPLOYER SHALL PROVIDE THE NOTICE REQUIRED
BY THIS SUBPARAGRAPH WITHIN ONE WEEK BEFORE OR AFTER,  OR  AT  THE  SAME
TIME,  THE  EMPLOYER PROVIDES THE ANNUAL WAGE SUMMARY, INCLUDING BUT NOT
LIMITED TO, A FORM W-2 OR A FORM 1099.  THE  NOTICE  SHALL  BE  PROVIDED
EITHER SEPARATELY OR AS PART OF THE ANNUAL WAGE SUMMARY.
  (C)  MANNER OF PROVIDING NOTICE. THE EMPLOYER SHALL PROVIDE THE NOTICE
REQUIRED BY THIS SUBPARAGRAPH TO EACH PERSON BY HAND DELIVERY, OR  ELEC-
TRONIC MAIL, OR BY MAIL TO THE LAST KNOWN ADDRESS.
  (D)  EMPLOYER'S  OPTION.  AT  THE  EMPLOYER'S OPTION, THE EMPLOYER MAY
CHOOSE TO PROVIDE THE NOTICE REQUIRED PURSUANT TO THIS SUBPARAGRAPH ONLY
TO THOSE EMPLOYEES WHOSE GROSS ANNUAL INCOMES DO  NOT  EQUAL  OR  EXCEED
SIXTY THOUSAND DOLLARS OR THE MAXIMUM INCOME AT WHICH AN EMPLOYEE MAY BE
ELIGIBLE FOR THE EARNED INCOME TAX CREDIT, WHICHEVER IS HIGHER.
  S 2. This act shall take effect January 1, 2016.

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