S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4016
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             February 25, 2019
                                ___________
 
 Introduced  by  Sen.  JACOBS -- 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  advance  payment  of  the
   earned income credit
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The tax law is amended by adding a new section 679 to  read
 as follows:
   §  679.  ADVANCE  PAYMENT  OF EARNED INCOME CREDIT.  (A) GENERAL RULE.
 EXCEPT AS OTHERWISE PROVIDED IN  THIS  CHAPTER,  EVERY  EMPLOYER  MAKING
 PAYMENT  OF  WAGES  TO AN EMPLOYEE WITH RESPECT TO WHOM AN EARNED INCOME
 ELIGIBILITY CERTIFICATE IS IN EFFECT SHALL, AT THE TIME OF  PAYING  SUCH
 WAGES, MAKE AN ADDITIONAL PAYMENT TO SUCH EMPLOYEE EQUAL TO SUCH EMPLOY-
 EE'S EARNED INCOME ADVANCE AMOUNT.
   (B)  EARNED INCOME ELIGIBILITY CERTIFICATE. FOR PURPOSES OF THIS ARTI-
 CLE, AN EARNED INCOME ELIGIBILITY CERTIFICATE IS A  STATEMENT  FURNISHED
 BY AN EMPLOYEE TO THE EMPLOYER WHICH:
   (1)  CERTIFIES THAT THE EMPLOYEE WILL BE ELIGIBLE TO RECEIVE AN EARNED
 INCOME CREDIT OR AN ENHANCED EARNED INCOME CREDIT PROVIDED BY SUBSECTION
 (D) OR (D-1) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE FOR THE  TAXABLE
 YEAR,
   (2)  CERTIFIES  THAT  THE EMPLOYEE HAS ONE OR MORE QUALIFYING CHILDREN
 FOR SUCH TAXABLE YEAR,
   (3) CERTIFIES THAT THE EMPLOYEE DOES NOT HAVE AN EARNED INCOME  ELIGI-
 BILITY  CERTIFICATE  IN EFFECT FOR THE CALENDAR YEAR WITH RESPECT TO THE
 PAYMENT OF WAGES BY ANOTHER EMPLOYER, AND
   (4) STATES WHETHER OR NOT THE EMPLOYEE'S SPOUSE HAS AN  EARNED  INCOME
 ELIGIBILITY CERTIFICATE IN EFFECT.
   FOR  PURPOSES OF THIS SECTION, A CERTIFICATE SHALL BE TREATED AS BEING
 IN EFFECT WITH RESPECT TO A SPOUSE IF SUCH  A  CERTIFICATE  WILL  BE  IN
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05785-01-9
              

 S. 4016                             2
 
 EFFECT  ON  THE  FIRST  STATUS  DETERMINATION DATE FOLLOWING THE DATE ON
 WHICH THE EMPLOYEE FURNISHES THE STATEMENT IN QUESTION.
   (C) EARNED INCOME ADVANCE AMOUNT. (1) IN GENERAL, FOR PURPOSES OF THIS
 SECTION,  THE TERM "EARNED INCOME ADVANCE AMOUNT" MEANS, WITH RESPECT TO
 ANY PAYROLL PERIOD, THE AMOUNT DETERMINED:
   (A) ON THE BASIS OF THE EMPLOYEE'S WAGES FROM THE  EMPLOYER  FOR  SUCH
 PERIOD, AND
   (B) IN ACCORDANCE WITH TABLES PRESCRIBED BY THE COMMISSIONER.
   IN  THE CASE OF AN EMPLOYEE WHO IS A MEMBER OF THE ARMED FORCES OF THE
 UNITED STATES, THE EARNED INCOME ADVANCE AMOUNT SHALL BE  DETERMINED  BY
 TAKING  INTO  ACCOUNT  SUCH  EMPLOYEE'S  EARNED INCOME AS DETERMINED FOR
 PURPOSES OF SUBSECTION (D) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE.
   (2) ADVANCE AMOUNT TABLES. THE TABLES REFERRED TO IN SUBPARAGRAPH  (B)
 OF PARAGRAPH ONE OF THIS SUBSECTION:
   (A)  SHALL  BE  SIMILAR IN FORM TO THE TABLES PRESCRIBED UNDER SECTION
 3402 OF THE INTERNAL REVENUE CODE AND, TO THE MAXIMUM  EXTENT  FEASIBLE,
 SHALL BE COORDINATED WITH SUCH TABLES, AND
   (B) IF THE EMPLOYEE IS NOT MARRIED, OR IF NO EARNED INCOME ELIGIBILITY
 CERTIFICATE  IS  IN  EFFECT  WITH RESPECT TO THE SPOUSE OF THE EMPLOYEE,
 SHALL TREAT THE CREDIT PROVIDED BY SUBSECTION (D) OR  (D-1)  OF  SECTION
 SIX HUNDRED SIX OF THIS ARTICLE AS IF IT WERE A CREDIT:
   (I)  OF NOT MORE THAN SIXTY PERCENT OF THE CREDIT PERCENTAGE IN EFFECT
 UNDER SECTION 32(B)(1) OF THE INTERNAL  REVENUE  CODE  FOR  AN  ELIGIBLE
 INDIVIDUAL  WITH  ONE  QUALIFYING  CHILD  AND  WITH EARNED INCOME NOT IN
 EXCESS OF THE EARNED INCOME AMOUNT IN EFFECT UNDER SECTION  32(B)(2)  OF
 THE INTERNAL REVENUE CODE FOR SUCH AN ELIGIBLE INDIVIDUAL, WHICH
   (II)  PHASES OUT AT SIXTY PERCENT OF THE PHASEOUT PERCENTAGE IN EFFECT
 UNDER SECTION 32(B)(1) OF THE INTERNAL REVENUE CODE FOR SUCH AN ELIGIBLE
 INDIVIDUAL BETWEEN THE PHASEOUT AMOUNT IN EFFECT UNDER SECTION  32(B)(2)
 OF  THE  INTERNAL  REVENUE  CODE FOR SUCH AN ELIGIBLE INDIVIDUAL AND THE
 AMOUNT OF EARNED INCOME AT WHICH THE CREDIT UNDER SECTION 32(A)  OF  THE
 INTERNAL REVENUE CODE PHASES OUT FOR SUCH AN ELIGIBLE INDIVIDUAL, OR
   (C)  IF  AN  EARNED  INCOME  ELIGIBILITY CERTIFICATE IS IN EFFECT WITH
 RESPECT TO THE SPOUSE OF THE EMPLOYEE, SHALL TREAT THE CREDIT AS  IF  IT
 WERE  A  CREDIT  DETERMINED  UNDER SUBPARAGRAPH (B) OF THIS PARAGRAPH BY
 SUBSTITUTING ONE-HALF OF THE AMOUNTS OF EARNED INCOME DESCRIBED IN  SUCH
 SUBPARAGRAPH FOR SUCH AMOUNTS.
   (D)  PAYMENTS TO BE TREATED AS PAYMENTS OF WITHHOLDING.  (1) IN GENER-
 AL, FOR PURPOSES OF THIS ARTICLE, PAYMENTS MADE  BY  AN  EMPLOYER  UNDER
 SUBSECTION  (A)  OF THIS SECTION TO HIS OR HER EMPLOYEES FOR ANY PAYROLL
 PERIOD:
   (A) SHALL NOT BE TREATED AS THE PAYMENT OF COMPENSATION, AND
   (B) SHALL BE TREATED AS MADE OUT OF AMOUNTS REQUIRED  TO  BE  DEDUCTED
 AND  WITHHELD FOR THE PAYROLL PERIOD UNDER PART FIVE OF THIS ARTICLE, AS
 IF THE EMPLOYER HAD PAID TO THE COMMISSIONER, ON THE DAY  ON  WHICH  THE
 WAGES ARE PAID TO THE EMPLOYEES, AN AMOUNT EQUAL TO SUCH PAYMENTS.
   (2) ADVANCE PAYMENTS EXCEED TAXES DUE. IN THE CASE OF ANY EMPLOYER, IF
 FOR  ANY  PAYROLL  PERIOD  THE AGGREGATE AMOUNT OF EARNED INCOME ADVANCE
 PAYMENTS EXCEEDS THE SUM OF THE AMOUNTS REFERRED TO IN SUBPARAGRAPH  (B)
 OF  PARAGRAPH ONE OF THIS SUBSECTION, EACH SUCH ADVANCE PAYMENT SHALL BE
 REDUCED BY AN AMOUNT WHICH BEARS THE SAME RATIO TO SUCH EXCESS  AS  SUCH
 ADVANCE  PAYMENT  BEARS  TO  THE  AGGREGATE  AMOUNT  OF ALL SUCH ADVANCE
 PAYMENTS.
   (3) EMPLOYER MAY MAKE FULL ADVANCE PAYMENTS.  THE  COMMISSIONER  SHALL
 PRESCRIBE  REGULATIONS UNDER WHICH AN EMPLOYER MAY ELECT (IN LIEU OF ANY
 APPLICATION OF PARAGRAPH TWO OF THIS SUBSECTION):

 S. 4016                             3
 
   (A) TO PAY IN FULL ALL EARNED INCOME ADVANCE AMOUNTS, AND
   (B) TO HAVE ADDITIONAL AMOUNTS PAID BY REASON OF THIS PARAGRAPH TREAT-
 ED AS THE ADVANCE PAYMENT OF TAXES IMPOSED BY THIS TITLE.
   (4)  FAILURE  TO  MAKE  ADVANCE PAYMENTS. FOR PURPOSES OF THIS ARTICLE
 (INCLUDING PENALTIES), FAILURE TO MAKE ANY ADVANCE  PAYMENT  UNDER  THIS
 SECTION AT THE TIME PROVIDED THEREFOR SHALL BE TREATED AS THE FAILURE AT
 SUCH  TIME  TO DEDUCT AND WITHHOLD UNDER THIS ARTICLE AN AMOUNT EQUAL TO
 THE AMOUNT OF SUCH ADVANCE PAYMENT.
   (E) FURNISHING AND TAKING EFFECT OF CERTIFICATES. FOR PURPOSES OF THIS
 SECTION:
   (1) WHEN CERTIFICATE TAKES EFFECT.
   (A) FIRST CERTIFICATE FURNISHED.  AN EARNED INCOME ELIGIBILITY CERTIF-
 ICATE FURNISHED THE EMPLOYER IN CASES IN WHICH NO PREVIOUS SUCH  CERTIF-
 ICATE  HAD  BEEN IN EFFECT FOR THE CALENDAR YEAR SHALL TAKE EFFECT AS OF
 THE BEGINNING OF THE FIRST PAYROLL PERIOD ENDING, OR THE  FIRST  PAYMENT
 OF  WAGES  MADE WITHOUT REGARD TO A PAYROLL PERIOD, ON OR AFTER THE DATE
 ON WHICH SUCH CERTIFICATE IS SO FURNISHED (OR IF LATER, THE FIRST DAY OF
 THE CALENDAR YEAR FOR WHICH FURNISHED).
   (B)  LATER  CERTIFICATE.  AN  EARNED  INCOME  ELIGIBILITY  CERTIFICATE
 FURNISHED THE EMPLOYER IN CASES IN WHICH A PREVIOUS SUCH CERTIFICATE HAD
 BEEN  IN  EFFECT FOR THE CALENDAR YEAR SHALL TAKE EFFECT WITH RESPECT TO
 THE FIRST PAYMENT OF WAGES MADE ON OR AFTER THE  FIRST  STATUS  DETERMI-
 NATION  DATE  WHICH  OCCURS AT LEAST THIRTY DAYS AFTER THE DATE ON WHICH
 SUCH CERTIFICATE IS SO FURNISHED, EXCEPT THAT AT  THE  ELECTION  OF  THE
 EMPLOYER  SUCH  CERTIFICATE  MAY  BE  MADE EFFECTIVE WITH RESPECT TO ANY
 PAYMENT OF WAGES MADE ON OR AFTER THE DATE ON WHICH SUCH CERTIFICATE  IS
 SO  FURNISHED.  FOR  PURPOSES OF THIS SECTION, THE TERM "STATUS DETERMI-
 NATION DATE" MEANS JANUARY FIRST, MAY FIRST,  JULY  FIRST,  AND  OCTOBER
 FIRST OF EACH YEAR.
   (2)  PERIOD  DURING  WHICH  CERTIFICATE  REMAINS  IN EFFECT. AN EARNED
 INCOME ELIGIBILITY CERTIFICATE WHICH TAKES EFFECT UNDER THIS SECTION FOR
 ANY CALENDAR YEAR SHALL CONTINUE IN EFFECT WITH RESPECT TO THE  EMPLOYEE
 DURING SUCH CALENDAR YEAR UNTIL REVOKED BY THE EMPLOYEE OR UNTIL ANOTHER
 SUCH CERTIFICATE TAKES EFFECT UNDER THIS SECTION.
   (3) CHANGE OF STATUS.
   (A)  REQUIREMENT  TO  REVOKE OR FURNISH NEW CERTIFICATE.  IF, AFTER AN
 EMPLOYEE HAS FURNISHED AN EARNED INCOME  ELIGIBILITY  CERTIFICATE  UNDER
 THIS  SECTION,  THERE  HAS  BEEN A CHANGE OF CIRCUMSTANCES WHICH HAS THE
 EFFECT OF:
   (I)  MAKING  THE  EMPLOYEE  INELIGIBLE  FOR  THE  CREDIT  PROVIDED  BY
 SUBSECTION  (D)  OR (D-1) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE FOR
 THE TAXABLE YEAR, OR
   (II) CAUSING AN EARNED INCOME ELIGIBILITY CERTIFICATE TO BE IN  EFFECT
 WITH  RESPECT  TO THE SPOUSE OF THE EMPLOYEE, THE EMPLOYEE SHALL, WITHIN
 TEN DAYS AFTER SUCH CHANGE IN CIRCUMSTANCES, FURNISH THE EMPLOYER WITH A
 REVOCATION OF SUCH CERTIFICATE OR WITH A NEW CERTIFICATE  (AS  THE  CASE
 MAY BE). SUCH A REVOCATION (OR SUCH A NEW CERTIFICATE) SHALL TAKE EFFECT
 UNDER  THE  RULES  PROVIDED BY SUBPARAGRAPH (B) OF PARAGRAPH ONE OF THIS
 SUBSECTION FOR A LATER CERTIFICATE AND SHALL BE MADE IN SUCH FORM AS THE
 COMMISSIONER SHALL BY REGULATIONS PRESCRIBE.
   (B) CERTIFICATE NO  LONGER  IN  EFFECT.  IF,  AFTER  AN  EMPLOYEE  HAS
 FURNISHED  AN  EARNED  INCOME ELIGIBILITY CERTIFICATE UNDER THIS SECTION
 WHICH CERTIFIES THAT SUCH A CERTIFICATE IS IN EFFECT WITH RESPECT TO THE
 SPOUSE OF THE EMPLOYEE, SUCH A CERTIFICATE IS NO LONGER IN  EFFECT  WITH
 RESPECT  TO SUCH SPOUSE, THEN THE EMPLOYEE MAY FURNISH THE EMPLOYER WITH
 A NEW EARNED INCOME ELIGIBILITY CERTIFICATE.

 S. 4016                             4
 
   (4) FORM  AND  CONTENTS  OF  CERTIFICATE.  EARNED  INCOME  ELIGIBILITY
 CERTIFICATES SHALL BE IN SUCH FORM AND CONTAIN SUCH OTHER INFORMATION AS
 THE COMMISSIONER MAY BY REGULATIONS PRESCRIBE.
   (5) TAXABLE YEAR DEFINED. THE TERM "TAXABLE YEAR" MEANS THE LAST TAXA-
 BLE  YEAR  OF  THE  EMPLOYEE BEGINNING IN THE CALENDAR YEAR IN WHICH THE
 WAGES ARE PAID.
   (F) NOTIFICATION. THE COMMISSIONER SHALL TAKE SUCH  STEPS  AS  MAY  BE
 APPROPRIATE  TO  ENSURE  THAT  TAXPAYERS WHO HAVE ONE OR MORE QUALIFYING
 CHILDREN AND WHO RECEIVE A REFUND OF THE CREDIT UNDER SUBSECTION (D)  OR
 (D-1) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE ARE AWARE OF THE AVAIL-
 ABILITY OF EARNED INCOME ADVANCE AMOUNTS UNDER THIS SECTION.
   (G) COORDINATION WITH ADVANCE PAYMENTS OF EARNED INCOME CREDIT.
   (1)  RECAPTURE  OF EXCESS ADVANCE PAYMENTS.  IF ANY PAYMENT IS MADE TO
 THE INDIVIDUAL BY AN EMPLOYER UNDER THIS  SECTION  DURING  ANY  CALENDAR
 YEAR,  THEN  THE  TAX  IMPOSED BY THIS CHAPTER FOR THE INDIVIDUAL'S LAST
 TAXABLE YEAR BEGINNING IN SUCH CALENDAR YEAR SHALL BE INCREASED  BY  THE
 AGGREGATE AMOUNT OF SUCH PAYMENTS.
   (2)  SAFE  HARBOR  AGAINST RECAPTURE OF EXCESS ADVANCE PAYMENTS. IF AN
 INDIVIDUAL ESTABLISHES THAT THEY ARE REQUESTING AND  RECEIVING  PAYMENTS
 UNDER  THIS  SECTION  IN  GOOD-FAITH  BY ESTABLISHING THAT THEY PROPERLY
 CLAIMED PAYMENTS UNDER THIS SECTION IN THE PRIOR YEAR AND THAT THEY HAVE
 NOT EXPERIENCED A SUBSTANTIAL CHANGE IN  CIRCUMSTANCES  SUCH  THAT  THEY
 HAVE  A  REASONABLE EXPECTATION OF ELIGIBILITY IN THE CURRENT YEAR, THEN
 PARAGRAPH ONE OF THIS SUBSECTION SHALL NOT APPLY.
   (3) RECONCILIATION OF PAYMENTS  ADVANCED  AND  CREDIT  ALLOWED.    ANY
 INCREASE  IN  TAX  UNDER  THIS  SUBSECTION  SHALL  NOT BE TREATED AS TAX
 IMPOSED BY THIS CHAPTER FOR PURPOSES OF DETERMINING THE  AMOUNT  OF  ANY
 CREDIT  (OTHER  THAN  THE  CREDIT  ALLOWED BY SUBSECTION (D) OR (D-1) OF
 SECTION SIX HUNDRED SIX OF THIS ARTICLE) ALLOWABLE UNDER THIS ARTICLE.
   § 2. This act shall take effect immediately and shall apply to taxable
 years beginning January 1, 2020.