NY State Senate Bill 2019-S6126

Senate Bill S6126

2019-2020 Legislative Session

Requires employers to notify employees of potential state and federal earned income tax credits

download bill text pdf

Archive: Last Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to budget and revenue
May 16, 2019	referred to budget and revenue

2019-S6126 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §606, Tax L

2019-S6126 (ACTIVE) - Summary

Requires employers to 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.

2019-S6126 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S6126

SPONSOR: MONTGOMERY
 
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 guid-
ance 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, elec-
tronic 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 eligi-
ble for the EITC, whichever is higher.

Section 2 of the bill would provide for an effective date of January 1,
2010.

 
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 eligi-
ble for a federal EITC pursuant to 26 V.S.C. § 32, and provides that the
State EITC will be calculated at 30% of the federal EITC.  Tax Law §
606(d)(6) provides that the Commissioner of the Department of Taxation
and Finance must make efforts at least every three years to notify indi-
viduals 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 cred-
it. 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 $8.50 per hour and earning $17,000 per year could effec-
tively realize more than a 25 percent increase in income, or an effec-
tive hourly rate of $11.39, after receipt of the state and federal EITC.
The EITC, when coupled with other supports available to low-income fami-
lies, 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 potential-
ly 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 indi-
viduals 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.

 
BUDGET IMPLICATIONS:

There are no significant fiscal impacts associated with this proposal.

 
EFFECTIVE DATE:
This bill would take effect January 1, 2011.

2019-S6126 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6126
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 16, 2019
                                ___________
 
 Introduced  by  Sen.  MONTGOMERY  -- read twice and ordered printed, and
   when printed to be committed to the Committee on Budget and Revenue
 
 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
 SET  FORTH IN SUBSECTION (A) OF SECTION THREE THOUSAND THREE HUNDRED SIX
 OF THE INTERNAL REVENUE CODE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD11895-01-9

 S. 6126                             2
 
   (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.
   § 2. This act shall take effect January 1, 2022.

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