Relates to the nursing home assessment credit

Title of bill

An act to amend the tax law, in relation to the nursing home assessment credit

Purpose

To ensure that the existing income tax credit for nursing home assessments shall also apply to the temporary assessment increase that has been imposed pursuant to a 2011 law.

Summary of provisions

Section one of the bill amends paragraph 1 of subsection (hh) of Section 606 of the Tax Law to provide that the personal income tax credit for certain assessments imposed on residential health care facilities shall also apply to any assessments which are imposed pursuant to Chapter 59 of the Laws of 2011.

Justification

As part of New York State's system for financing health care programs, certain assessments are imposed on residential health care facilities pursuant to Section 2807-d of the Public Health Law. The current assessment authorized by this section of law is 6%.

In order to ease the financial burden on nursing home residents, legislation was enacted in 2005 to allow taxpayers a personal income tax credit for any such assessments paid directly by the taxpayer (see subsection (hh) of Section 606 of the Tax Law).

However, in recent years, an additional assessment has been imposed by the Health Department. Budget legislation enacted in 2011 required a 2% across-the-board reduction in Medicaid payments, but provided flexibility in utilizing alternative methods to achieve such savings (see Section 90 of Part H of Chapter 59 of the Laws of 2011).

Pursuant to this authority, the Health Department has imposed an additional assessment on residential health care facilities. The current additional assessment is 0.8%, resulting in a combined assessment of 6.8%.

Taxpayers who file for the nursing home assessment credit are surprised to discover that they are only eligible for a credit of the 6% assessment, rather than the full 6.8% assessment. This situation occurs because the Tax Law which authorizes the credit refers only to assessments imposed pursuant to Section 2807-d of the Public Health Law. Since the additional 0.8% assessment is imposed by the Health Department's administrative authority exercised under a different law, it is not currently subject to reimbursement.

This bill would amend the Tax Law in order to fulfill the intent of the 2005 law and provide taxpayers the opportunity to recover all such assessments that are directly billed to them.

Legislative history

New bill

Fiscal implications

To be determined

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2017