Relates to the issuance of family tax relief credit; repealer

Summary of provisions

Section 1. Paragraph 1 of section (vv) of section 606 of the tax law, as added by section 1 of part CC of chapter 59 of the laws of 2013, is amended to read as follows:

1. An individual taxpayer who meets the eligibility standards in para- graph two of this subsection shall be allowed a credit against the taxes imposed by this article of three hundred and fifty dollars per return for tax years two thousand thirteen, two thousand fourteen, and two thousand fifteen.

2. Paragraph 4 of subsection (vv) of section 606 of the tax law is repealed and paragraph 5 is renumbered paragraph 4.

3. This act shall take effect immediately.

Existing law

Section 1. Paragraph 4 of subsection (vv) of section 606 of the tax law, as added by section 1 of part CC of chapter 59 of the laws of 2013, is amended to read as follows:

4. For each year this credit is allowed, on or before October 15th of such year, the commissioner shall determine the taxpayer's eligibility for this credit utilizing the information available to the commissioner on the taxpayer's personal income tax return filed for the taxable year in which the credit is allowed. For those taxpayers whom the commission- er has determined eligible for this credit, the commissioner shall advance a payment of three hundred and fifty dollars. When a taxpayer files his or her return for the taxable year, such taxpayer shall prop- erly reconcile that payment on his or her return

Justification

Middle class families with children who have incomes between $40,000.00 and $300,000.00 will be eligible to receive a credit of $350.00 per year for three years beginning in 2014. The budget language clearly states that for each year this credit is allowed on or before October 15th of such year, the commissioner shall determine the taxpayer's eligibility for this credit based on available information to the commissioner on

the taxpayer's personal income tax return filed for the taxable year two years prior to the taxable year in which the credit is allowed. For those taxpayers whom the commissioner has determined eligible for this credit, the commissioner shall advance a payment of $350.00. In other words, this credit becomes a rebate check that the New York State Tax Department prints and mails out.

This would seem to be the least efficient way of delivering a tax credit to over one million New York State taxpayers, as opposed to simply allowing them to claim it at tax time. If we deliver this so called tax credit in the manner that it currently exists, the cost of the program is estimated to be approximately $1.23 billion. Finally, we must also consider the additional cost associated with administering this so called tax credit program such as printing expenses, postage, and the cost of staff time associated with managing the program. New Yorkers should benefit from this program as a tax credit when he/she files a tax return. It is the same benefit with no additional cost to New York State. If not and we are simply going to provide a $350.00 check. Although this program is intended to benefit New Yorkers, we should reconsider how this program is administered.

Legislative history

None

Fiscal implications

To be determined

Local fiscal implications

To be determined

Effective date

This act shall take effect immediately.