NY State Senate Bill 2021-S537

Senate Bill S537

2021-2022 Legislative Session

Provides for the advance payment of the earned income tax credit

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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 05, 2022	referred to budget and revenue
Jan 06, 2021	referred to budget and revenue

co-Sponsors

2021-S537 (ACTIVE) - Details

See Assembly Version of this Bill:: A2533
Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §606, add §679, Tax L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S8670, A10775
2023-2024: S5573, A5577

2021-S537 (ACTIVE) - Summary

Provides for the advance payment of the earned income tax credit to qualifying employees.

2021-S537 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S537

SPONSOR: KAPLAN
 
TITLE OF BILL:

An act to amend the tax law, in relation to providing for the advance
payment of the earned income tax credit

 
SUMMARY OF PROVISIONS:

Section 1 amends subsection (d) of section 606 of the tax law. The law
is amended to expand the income eligibility for the New York Earned
Income Tax Credit.

Section 2 adds new section 679 to the tax law. This section provides for
the advance payment of the earned income credit.

Section 3 sets the effective date.

 
JUSTIFICATION:

The Earned Income Tax Credit has consistently proven one of the most
effective methods by which governments can reward work and alleviate
poverty. This legislation builds on the success of the New York Earned
Income Credit by increasing the value of the credit, expanding who is
eligible to receive the credit, and creating an option for recipients of
the credit to receive payments quarterly.  The EITC is designed to
reward work, its value growing with a recipient's earnings. In the 1990s
the EITC was credited as being the single largest factor encouraging
single mothers to return to work, and this matters for children.
Research has shown that lifting the income of low-income families while
a child is leads to better health outcomes, more educational exposure
and higher earnings in adulthood.

This bill recognizes that the COVID-19 Pandemic has pushed many middle-
class families to the brink of financial catastrophe and expands eligi-
bility for the EITC to provide a measure of financial security for those
making more than poverty wages. This bill also expands eligibility for
those who do not have children, those aged 18-24, and those who do not
have a social security number but pay taxes. These measures address
important inadequacies in the federal EITC and will provide a measure of
financial security for a large swatch of low-income New Yorkers.

 
LEGISLATIVE HISTORY:

S. 8670/A. 10775 of 2020; Referred to Senate Rules Committee

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S537 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    537
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sen.  KAPLAN -- 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 providing  for  the  advance
   payment of the earned income tax credit

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subsection (d) of section  606  of  the  tax
 law,  as  amended  by  section  1 of part Q of chapter 63 of the laws of
 2000, is amended to read as follows:
   (1) General. A taxpayer shall be allowed a credit as  provided  herein
 equal  to  (i)  the  applicable  percentage  of the earned income credit
 allowed under section thirty-two of the internal revenue  code  for  the
 same taxable year, (ii) reduced by the credit permitted under subsection
 (b)  of  this section. PROVIDED, HOWEVER, FOR TAXABLE YEARS BEGINNING IN
 TWO THOUSAND TWENTY-ONE AND THEREAFTER, FOR THE PURPOSE  OF  DETERMINING
 THE AMOUNT OF TAX CREDIT UNDER THIS PARAGRAPH, IN CALCULATING THE EARNED
 INCOME  TAX  CREDIT  ALLOWED  UNDER  SECTION  THIRTY-TWO OF THE INTERNAL
 REVENUE CODE, THE PHASEOUT AMOUNT AS REFERENCED IN  SECTION  32(B)(2)(A)
 OF  THE INTERNAL REVENUE CODE SHALL BE READ AS TWENTY FOUR THOUSAND NINE
 HUNDRED SIXTY DOLLARS INSTEAD OF ELEVEN THOUSAND SIX HUNDRED TEN DOLLARS
 AND SUCH PHASEOUT AMOUNT SHALL BE SUBJECT TO ADJUSTMENTS MADE IN SECTION
 THIRTY-TWO OF THE INTERNAL REVENUE CODE (THE CALENDAR YEAR REFERENCED IN
 THE COST OF LIVING ADJUSTMENT IN SECTION  32(J)(1)(B)  OF  THE  INTERNAL
 REVENUE  CODE  SHALL BE APPLIED AS CALENDAR YEAR TWO THOUSAND TWENTY-ONE
 WITH RESPECT TO THE PHASEOUT AMOUNTS), INCLUDING AN ADDITIONAL  PHASEOUT
 AMOUNT  FOR  A  JOINT  FILER  AND INFLATION ADJUSTMENT SPECIFIED IN SUCH
 SECTION OF THE INTERNAL REVENUE CODE FOR TAXABLE YEARS BEGINNING IN  TWO
 THOUSAND TWENTY-ONE AND THEREAFTER.
   The  applicable percentage shall be (i) seven and one-half percent for
 taxable years  beginning  in  nineteen  hundred  ninety-four,  (ii)  ten
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD04856-01-1

 S. 537                              2
 
 percent  for  taxable  years  beginning in nineteen hundred ninety-five,
 (iii) twenty percent for taxable years beginning after nineteen  hundred
 ninety-five  and  before  two  thousand,  (iv)  twenty-two  and one-half
 percent  for  taxable  years  beginning in two thousand, (v) twenty-five
 percent for taxable years beginning in two thousand  one,  (vi)  twenty-
 seven  and  one-half percent for taxable years beginning in two thousand
 two, [and] (vii) thirty percent for taxable years beginning in two thou-
 sand three, (VIII) THIRTY-FIVE PERCENT FOR TAXABLE  YEARS  BEGINNING  IN
 TWO THOUSAND TWENTY-ONE, AND (IX) FORTY PERCENT FOR TAXABLE YEARS BEGIN-
 NING  IN  TWO  THOUSAND  TWENTY-TWO  and thereafter.   FOR TAXABLE YEARS
 BEGINNING IN TWO THOUSAND TWENTY-ONE AND THEREAFTER, IN THE CASE  OF  AN
 ELIGIBLE  INDIVIDUAL  WITH NO QUALIFYING CHILDREN, THE CREDIT PERCENTAGE
 SHALL BE FIFTEEN AND THREE-TENTHS TO DETERMINE THE AMOUNT OF THE  EARNED
 INCOME TAX CREDIT REFERENCED IN SECTION 32(B)(1) OF THE INTERNAL REVENUE
 CODE  AND THE EARNED INCOME AMOUNT AND THE PHASEOUT AMOUNT OF SUCH INDI-
 VIDUAL SHALL BE DETERMINED AS IF SUCH EARNED INCOME AMOUNT AND  PHASEOUT
 AMOUNT AS REFERENCED IN SECTION 32(B)(2)(A) OF THE INTERNAL REVENUE CODE
 ARE  EQUAL  TO  THE  AMOUNT  ALLOWED FOR AN ELIGIBLE INDIVIDUAL WITH ONE
 QUALIFYING CHILD AS SUCH  AMOUNTS  ARE  REFERENCED  IN  SUCH  PARAGRAPH.
 PROVIDED  FURTHER, FOR THE PURPOSE OF THIS SUBSECTION, AN ELIGIBLE INDI-
 VIDUAL SHALL BE AN INDIVIDUAL WHO HAS ATTAINED NINETEEN YEARS OF AGE  AS
 OPPOSED  TO  TWENTY-FIVE  YEARS  OF AGE, IRRESPECTIVE OF THE ELIGIBILITY
 REFERENCED IN SECTION 32(C)(1)(A)(II)(II) OF THE INTERNAL REVENUE  CODE.
 FURTHERMORE,  AN  INDIVIDUAL  OTHERWISE ELIGIBLE BUT FOR THE REQUIREMENT
 UNDER SECTION 32(M) OF THE INTERNAL REVENUE CODE SHALL BE  ELIGIBLE  FOR
 THIS  CREDIT. Provided, however, that if the reversion event, as defined
 in this paragraph, occurs, the applicable  percentage  shall  be  twenty
 percent  for  taxable  years  ending  on  or after the date on which the
 reversion event occurred. The reversion event shall be  deemed  to  have
 occurred  on the date on which federal action, including but not limited
 to, administrative, statutory or regulatory changes, materially  reduces
 or  eliminates  New  York  state's  allocation  of the federal temporary
 assistance for needy families block grant,  or  materially  reduces  the
 ability  of  the  state  to spend federal temporary assistance for needy
 families block grant funds for the earned  income  credit  or  to  apply
 state  general  fund  spending  on  the  earned income credit toward the
 temporary assistance for  needy  families  block  grant  maintenance  of
 effort  requirement, and the commissioner of the office of temporary and
 disability assistance shall certify  the  date  of  such  event  to  the
 commissioner  of  taxation  and finance, the director of the division of
 the budget, the speaker of the assembly and the temporary  president  of
 the senate.
   §  2.  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, THE COMMISSIONER SHALL
 PROVIDE FOR THE PREPAYMENT OF THE EARNED  INCOME  CREDIT  TO  QUALIFYING
 EMPLOYEES.
   (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 COMMISSIONER WHICH:
   (1)  CERTIFIES THAT THE EMPLOYEE WILL BE ELIGIBLE TO RECEIVE AN EARNED
 INCOME CREDIT OR AN ENHANCED EARNED INCOME CREDIT PROVIDED  PURSUANT  TO
 SUBSECTION  (D)  OR (D-1) OF SECTION SIX HUNDRED SIX OF THIS ARTICLE FOR
 THE TAXABLE YEAR;

 S. 537                              3
 
   (2) CERTIFIES THAT THE EMPLOYEE DOES NOT HAVE AN EARNED INCOME  ELIGI-
 BILITY  CERTIFICATE  IN  EFFECT FOR THE TAXABLE YEAR WITH RESPECT TO THE
 PAYMENT OF WAGES BY ANOTHER EMPLOYER; AND
   (3)  STATES  WHETHER THE EMPLOYEE'S SPOUSE HAS AN EARNED INCOME ELIGI-
 BILITY CERTIFICATE IN EFFECT. FOR PURPOSES OF THIS  SECTION,  A  CERTIF-
 ICATE  SHALL  BE  TREATED AS BEING IN EFFECT WITH RESPECT TO A SPOUSE IF
 SUCH CERTIFICATE WILL BE IN EFFECT ON  THE  FIRST  STATUS  DETERMINATION
 DATE FOLLOWING THE DATE ON WHICH THE OTHER ELIGIBLE SPOUSE FURNISHES THE
 STATEMENT IN QUESTION.
   (C) EARNED INCOME ADVANCE AMOUNT. FOUR ADVANCED PAYMENTS SHALL BE MADE
 TO  SUCH  QUALIFYING  EMPLOYEES. AN ESTIMATED ANNUAL TAX CREDIT SHALL BE
 DETERMINED BY THE COMMISSIONER IN ADVANCE OF THE FIRST PAYMENT AND SHALL
 BE SUBJECT TO ADJUSTMENT DUE TO CHANGES IN EMPLOYMENT OR  FAMILY  STATUS
 OVER  THE  COURSE  OF  THE YEAR. PRIOR TO DISBURSEMENT, THE COMMISSIONER
 SHALL ENSURE THAT THE QUALIFYING EMPLOYEE'S STATUS HAS NOT CHANGED.  THE
 FIRST  THREE ADVANCED PAYMENTS SHALL BE MADE DURING THE TAXABLE YEAR AND
 SHALL BE TWENTY PERCENT OF THE ANTICIPATED CREDIT. THE  FOURTH  ADVANCED
 PAYMENT  SHALL  BE MADE AFTER THE TAX YEAR IS OVER AND SHALL BE ADJUSTED
 TO MATCH THE ACTUAL CREDIT DUE ELIGIBLE. SUCH  PAYMENTS  SHALL,  TO  THE
 EXTENT  PRACTICABLE,  BE MADE AVAILABLE VIA DIRECT DEPOSIT AND VIA ELEC-
 TRONIC BENEFIT TRANSFER (EBT) CARD.
   (D) FORM AND CONTENTS  OF  CERTIFICATE.    EARNED  INCOME  ELIGIBILITY
 CERTIFICATES  SHALL  BE IN SUCH FORM AND CONTAIN SUCH INFORMATION AS THE
 COMMISSIONER MAY DETERMINE AND PRESCRIBE.
   (E) NOTIFICATION. (1) THE COMMISSIONER SHALL NOTIFY ALL TAXPAYERS  WHO
 HAVE RECEIVED A REFUND OF THE CREDIT PURSUANT TO SUBSECTION (D) OR (D-1)
 OF  SECTION SIX HUNDRED SIX OF THIS ARTICLE BASED ON THE MOST RECENT TAX
 RETURN OR RECORD IN WRITING OF THE AVAILABILITY OF EARNED INCOME ADVANCE
 AMOUNTS UNDER THIS SECTION.  SUCH  WRITTEN  OR  ELECTRONIC  NOTIFICATION
 SHALL INCLUDE A CLEARLY LABELED SECTION OR WITHHOLDING FORMS AND A SEPA-
 RATE  HANDOUT  WITH INFORMATION ABOUT THE ADVANCED PAYMENT OF THE EARNED
 INCOME CREDIT IN THE SIX MOST COMMON LANGUAGES SPOKEN BY INDIVIDUALS  IN
 THIS STATE.
   (2)  THE COMMISSIONER SHALL PROVIDE INFORMATION OF THE AVAILABILITY OF
 EARNED INCOME ADVANCE AMOUNTS  UNDER  THIS  SECTION  TO  TAX  PREPARERS,
 ACCOUNTANTS  AND  ORGANIZATIONS  THAT ASSIST INDIVIDUALS IN TAX PREPARA-
 TION.  SUCH INFORMATION SHALL BE DISTRIBUTED TO QUALIFYING INDIVIDUALS.
   (F) COORDINATION WITH ADVANCE PAYMENTS OF EARNED INCOME CREDIT. (1) IF
 ANY PAYMENT IS MADE TO THE  INDIVIDUAL  BY  THE  DEPARTMENT  UNDER  THIS
 SECTION  DURING  ANY  CALENDAR YEAR, 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) IF AN INDIVIDUAL ESTABLISHES THAT HE  OR  SHE  IS  REQUESTING  AND
 RECEIVING PAYMENTS UNDER THIS SECTION IN GOOD-FAITH BY ESTABLISHING THAT
 HE OR SHE PROPERLY CLAIMED PAYMENTS UNDER THIS SECTION IN THE PRIOR YEAR
 AND  THAT  HE OR SHE HAS NOT EXPERIENCED A SUBSTANTIAL CHANGE IN CIRCUM-
 STANCES SUCH THAT HE OR SHE HAS A REASONABLE EXPECTATION OF  ELIGIBILITY
 IN  THE  CURRENT  YEAR,  THEN PARAGRAPH ONE OF THIS SUBSECTION SHALL NOT
 APPLY.
   (3) 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.
   § 3. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2021.

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Senate Bill S537

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Sponsored By

Anna M. Kaplan