What's happening
This bill increases the New York child and dependent care tax credit percentages for a wider range of incomes starting in 2017.
Why it matters
Expands financial relief for more families. By raising the income thresholds and increasing the percentage of the child and dependent care credit, this bill aims to help a broader range of middle- and upper-middle-income families—not just low-income households—offset the high costs of child and dependent care.
Boosts support for working parents and caregivers. Increasing the credit makes it more financially viable for parents and caregivers to stay in or re-enter the workforce, potentially increasing household stability and economic participation.
Reduces tax burden for many New Yorkers. The new structure sharply increases the maximum credit (to 110%) for incomes up to $65,000 and provides meaningful credits (50%) for incomes up to $200,000, which could result in significant tax savings for a wide range of filers.
Responsive to federal policy changes. The bill includes a “reversion event” clause, meaning if federal funding or rules around the Temporary Assistance for Needy Families (TANF) program change in a way that harms New York’s ability to fund this credit, the state will automatically revert to the previous, less generous formula—highlighting the link between state benefits and federal policy.
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Who cares
Headline styles
Expand Child Care Tax Credit
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to investigations and government operations
- Referred to investigations and government operations
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1051
2017-2018 Regular Sessions
IN SENATE
January 6, 2017
Introduced by Sen. AKSHAR -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
AN ACT to amend the tax law, in relation to the credit for certain household and dependent care services necessary for gainful employment known as the child and dependent care credit
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 1 of subsection (c) of section 606 of the tax law, as amended by section 1 of part M of chapter 63 of the laws of 2000, is amended to read as follows:
(1) A taxpayer shall be allowed a credit as provided herein equal to the applicable percentage of the credit allowable under section twentyone of the internal revenue code for the same taxable year (without regard to whether the taxpayer in fact claimed the credit under such section twenty-one for such taxable year). The applicable percentage shall be the sum of (i) twenty percent and (ii) a multiplier multiplied by a fraction. For taxable years beginning in nineteen hundred ninetysix and nineteen hundred ninety-seven, the numerator of such fraction shall be the lesser of (i) four thousand dollars or (ii) fourteen thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For the taxable year beginning in nineteen hundred ninety-eight, the numerator of such fraction shall be the lesser of (i) thirteen thousand dollars or (ii) thirty thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For taxable years beginning in nineteen hundred ninety-nine, the numerator of such fraction shall be the lesser of (i) fifteen thousand dollars or (ii) fifty thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. For taxable years beginning after
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04067-01-7
S. 1051 2
nineteen hundred ninety-nine, the numerator of such fraction shall be the lesser of (i) fifteen thousand dollars or (ii) sixty-five thousand dollars less the New York adjusted gross income for the taxable year, provided, however, the numerator shall not be less than zero. The denominator of such fraction shall be four thousand dollars for taxable years beginning in nineteen hundred ninety-six and nineteen hundred ninetyseven, thirteen thousand dollars for the taxable year beginning in nineteen hundred ninety-eight, and fifteen thousand dollars for taxable years beginning after nineteen hundred ninety-eight. The multiplier shall be ten percent for taxable years beginning in nineteen hundred ninety-six, forty percent for taxable years beginning in nineteen hundred ninety-seven, and eighty percent for taxable years beginning after nineteen hundred ninety-seven. Provided, however, for taxable years beginning after nineteen hundred ninety-nine, for a person whose New York adjusted gross income is less than forty thousand dollars, such applicable percentage shall be equal to (i) one hundred percent, plus (ii) ten percent multiplied by a fraction whose numerator shall be the lesser of (i) fifteen thousand dollars or (ii) forty thousand dollars less the New York adjusted gross income for the taxable year, provided such numerator shall not be less than zero, and whose denominator shall be fifteen thousand dollars. Provided, however, for taxable years beginning on or after January first, two thousand seventeen, the applicable percentage shall be one hundred ten percent for all incomes up to sixty-five thousand dollars, fifty percent for all incomes between sixty-five thousand dollars and two hundred thousand dollars, and twenty percent for all incomes above two hundred thousand dollars. Provided, further, that if the reversion event, as defined in this paragraph, occurs, the applicable percentage shall, for taxable years ending on or after the date on which the reversion event occurred, be determined using the rules specified in this paragraph applicable to taxable years beginning in nineteen hundred ninety-nine. 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 credit for certain household and dependent care services necessary for gainful employment or to apply state general fund spending on the credit for certain household and dependent care services necessary for gainful employment 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, the director of the division of the budget, the speaker of the assembly and the temporary president of the senate.
§ 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2017.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to the credit for certain household and dependent care services necessary for gainful employment known as the child and dependent care credit
Purpose
This bill is intended to ensure that employees will receive an increased child and dependent care tax credit that will create effective employee retention and will help to keep well-trained professionals in the workforce.
Summary of provisions
Section 1 amends section 606 of the Tax Law by adding language that will award a child and dependent care tax credit of 110% to all workers earning incomes up to $65,000. A credit of 50% will be allotted to those with incomes between $65,000 and $200,000. A 20% credit will be awarded to those earning above a $200,000 threshold.
Section 2 lists the effective date.
Justification
Child care costs across New York State are increasing annually by approximately $730 which has led many families to decide between working and staying home to care for their children.
According to a 2015 report, NYS is ranked number one with the highest costs of child care in the United States. In NYS, Parents are paying approximately $14,000 a year for one child and nearly $26,000 a year for two children with a medium income of $54,310 (Childcare Aware, Parents and High Cost of Child Care).
By increasing the child and dependent care tax credit, the state will provide families the opportunity they deserve to better support themselves, allow their children to have sufficient child care services, help businesses retain and employ new workers, and to allow our employees to help contribute to our workforce economy.
Legislative history
New bill.
Fiscal implications
None.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.