Establishes a senior citizen utility circuit breaker personal income tax credit

Title of bill

An act to amend the tax law, in relation to establishing a senior utility circuit breaker personal income tax credit

Purpose

Creates a circuit breaker refundable tax credit to provide relief to seniors that pay a high percentage of their income in utility costs.

Summary of provisions

Section one of the bill amends section 606 of the tax law by adding a new subdivision (ccc). Paragraph one of the new subdivision defines eligible taxpayer as individuals over 65 years of age with gross incomes of $150,000 or less. It defines the eligible expenses as including electricity, heating, residential gas, water and sewer charges, and telephone services, with the exception of cell phone services unless they are the sole means by which the taxpayer receives telephonic services.

Paragraph two of the new subdivision explains the computation of the credit, The credit shall be equal to one half of those eligible expenses which exceed seven percent of a filers income. The credit will deduct any funds received by an individual pursuant to the low-income home energy assistance program.

Paragraph three of the new subdivision states that any amount of credit allowed under this subsection that exceeds the qualified taxpayers tax for that year shall be treated as an overpayment and refunded.

Section two of the bill sets an immediate effective date.

Justification

New Yorkers currently pay the highest electric bills in the continental United States and the second highest in the nation, 60% above the national average. These circumstances are problematic for all New Yorkers, but especially problematic for senior New Yorkers. Seniors' bills in the Consolidated Edison service territory of NYC have increased by 20% or more over the past two years, and are paying 102% more for their average electric bill than the average customer across the nation.

Most seniors rely on fixed incomes, receiving on average $1,234 in Social Security benefits and $516.90 in Supplemental Security Income in NY. 30% of older households have total incomes of less than $20,000, and they typically experience the greatest energy burden. Unfortunately, the federal government's Home Energy Assistance Program (HEAP) is down. Throughout the decade, the average HEAP federal block grant amount has remained well below average heating costs faced by older consumers. This means that even our neediest seniors are not getting the support they need to help pay for New York's high utility costs.

This proposal is meant to provide relief that is based on the income burden a household faces. This senior utility circuit breaker would deliver relief to any senior household that pays more than seven percent of their annual income in utilities in the form of a refundable tax credit. This proposal would provide a senior household with relief equal to half of their expenses above the seven percent threshold. For the purposes of this proposal, covered expenses would include electricity charges, gas, heating charges, including the costs of any fuels, water and sewer charges, internet, and telephone charges excluding cell phone service. By linking this relief to income, we can ensure that the benefits are provided to those that need it most.

Legislative history

This is a new bill.

Fiscal implications

Cost to be determined.

Effective date

This act shall take effect immediately