Establishes the renters' and small homeowners' credit in a city with a population of a million or more

a. A resident individual who lives in a city with a population of a million or more who has occupied and paid rent for his or her primary residence in such city for six months or more of the taxable year, is required or chooses to file a tax return and is one of the following:

*is 65 or older

*is filing a joint return with a spouse who is 65 or older

*is a head of household

*is a married individual filing a joint return with a spouse and has at least 1 dependent

*is a married individual filing a separate return and has at least 1 dependent

*is a surviving spouse and has at least one dependent

b. An owner of any dwelling with six units or less in a city of a million or more who occupies such dwelling as his or her primary residence for six months or more of the taxable year and who is required or chooses to file a tax return.

The bill also states that an individual who is listed as a dependent allowable to another taxpayer for the taxable year or who pays rent for his or her primary resident to a family member sharing the same primary residence shall not be a "qualified taxpayer" for purposes of this section.

(B) "Residence" means a dwelling in a city with a population of a million or more and may consist of a part of a multi-dwelling or multi-purpose building including a cooperative or condominium, one, two or three family dwellings and rental units within a single dwelling which are either owner-occupied or rented by a qualified taxpayer.

(2)(A) A qualified taxpayer shall be allowed a credit against the taxes imposed by this article reduced by the credits permitted in this article. If the credit exceeds the tax as so reduced for such year, the excess shall be treated as an overpayment of tax to be credited or refunded without interest.

(2)(B) If more than one qualified taxpayer pays rent for the same primary residence and has a federal adjusted gross income for which a credit would be due, each such qualified taxpayer shall divide the base amount of the credit allowed for his or her income level by the total number of individuals or married couples filing a joint return who are paying the rent, whether or not eligible for a credit, to determine the amount of credit allowed to that qualified taxpayer.

(2) (C) A qualified taxpayer shall be allowed the credit under this subsection or the credit under subsection (e) of this section (real property tax circuit breaker credit), whichever is the higher amount.

(3)(A) Sets forth the tables to be used for determining the credits allowed for a qualified taxpayer who is 65 or older with a filing status of single.

(3)(B) Sets forth the tables to be used for determining the credits allowed for any other qualified taxpayer, provided, however, that a qualified taxpayer who is a married individual filing a separate New York income tax return shall receive one-half of the base amount of the credit plus any additional amount for which such taxpayer would be eligible based on the income and number of exemptions claimed by such taxpayer.

Section 2 sets an immediate effective date.

Existing law

This tax credit is not in place under existing law.

Justification

In January 2014, Governor Cuomo proposed the creation of a Renters' Tax Credit in his 20142015 Budget in order to give renters a much needed income tax credit to ease their tax burden. While it is important to give renters this income tax credit, it is equally important that small homeowners, including co-op and condominium owners in the city of New York also be granted this same tax credit. In December 2011 a property tax cap was implemented throughout New York State but explicitly exempted the city of New York. This much needed relief was denied to small homeowners in the city of New York despite their equally dire need for relief from their overall tax burden.

This bill Will rectify that inequity and provide much needed relief to both renters and small homeowners who occupy these residences as their primary residences. This includes owners of co-ops and condominiums who are already being treated unfairly under the New York City property tax laws.

Legislative history

2014 A9059 Referred to Ways and Means 2014 S7417 Referred to Investigations and Government Operations

Fiscal implications

To be determined

Local fiscal implications

To be determined

Effective date

This act shall take effect immediately.