What's happening
This bill establishes a program allowing certain New York taxpayers to defer up to $2,000 in tax liability for childcare expenses, with structured repayment over ten years.
Why it matters
Offers short-term financial relief for working families with young children. by letting them delay up to $2,000 in state tax payments for childcare, potentially easing cash flow during years with high childcare expenses.
Creates a structured, interest-free repayment plan. families repay the deferred taxes over ten years, minimizing long-term financial burden and making it more manageable than a lump-sum repayment.
Includes safeguards and flexibility. Taxpayers are notified annually about their deferred liability and repayment schedule, may pay back early or defer less than the maximum, and special provisions apply if they move out of state or in cases of divorce.
May particularly benefit lower- and middle-income working parents. who struggle to afford childcare but do not always benefit immediately from tax credits, potentially improving workforce participation and economic stability for families with children under five.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
New York resident taxpayers with dependents under five
Those with qualifying employment-related care expenses could defer up to $2,000 in state income tax liability per tax year, with interest-free repayment.
Taxpayers moving out of New York
Those moving to a jurisdiction without effective and applicable reciprocity would owe their entire deferred balance on that year's tax filing, subject to a department-approved payment plan.
New York State Department of Taxation and Finance
The department would have to send annual deferred-balance and repayment notices, address repayment after divorce and could allow repayment through payroll withholding.
Headline styles
Defer Taxes for Childcare
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to budget and revenue
- Referred to budget and revenue
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3018
2019-2020 Regular Sessions
IN SENATE
January 31, 2019
Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to establishing a childcare advance which enables certain taxpayers to defer payment of a portion of their tax liability
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The tax law is amended by adding a new section 608 to read as follows:
§ 608. Childcare advance. (a) Any resident taxpayer who, in a taxable year, has "employment related expenses" as defined in the internal revenue code section 21(b)(2) for a dependent under age five and would be eligible to use those expenses as the basis for calculating a credit under internal revenue code section 21 (without regard to whether the taxpayer in fact claimed the credit under such section for such taxable year), may defer payment of their tax liability for that taxable year under this article by the amount of those expenses but not to exceed two thousand dollars.
(b) Any taxpayer who defers tax liability under subsection (a) of this section shall be liable: (i) once the taxpayer is no longer taking the deferral, for the full amount previously deferred divided into equal payments over ten years, except that (ii) in any future years the taxpayer takes the deferral, that taxpayer is liable only for one-tenth of each deferral taken five or more years prior until each of those deferrals is repaid. At no point shall the taxpayer be liable for amounts previously repaid. Repayment shall be made without interest.
(c) Any taxpayer who defers tax liability under subsection (a) of this section, and who moves to a residence outside the state of New York in a state, territory or country which does not maintain effective and applicable reciprocity with the state of New York, shall be liable for the entire amount deferred on the tax filing for the tax year in which such
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04124-01-9
S. 3018 2
change of residence occurs, but subject to approval of the department shall be directed to repay that liability through a payment plan approved by the department.
(d) At the end of every tax year, the department shall notify each taxpayer who has deferred tax liability under subsection (a) of this section of the total amount of their deferred liability, the tax year in which repayment will begin, and an estimate of the amount for which the taxpayer will be liable each year once the eligibility expires.
(e) Nothing in this section shall prevent a taxpayer from repaying accumulated liability earlier than the schedule set forth in subsection (b) of this section, or taking less than the total amount allowable under subsection (a) of this section in any given tax year.
(f) The department may provide for the repayment of deferrals under this section to be made through payroll withholding in accordance with section six hundred seventy-one of this article, and shall address repayment in cases of divorce.
§ 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after January first of the calendar year in which it takes effect and shall apply to tax years commencing on and after such date.
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 establishing a childcare advance which enables certain taxpayers to defer payment of a portion of their tax liability
Purpose
Establishes the Childcare Advance, a deferral of state taxes to help families afford the costs of childcare.
Summary of provisions
New section 608 of the tax law establishes the Childcare Advance, a deferral of state taxes to help families afford the costs of childcare.
Section 608(a) permits resident taxpayers with eligible "employment-re- lated" expenses, as defined in Internal Revenue Code ("IRC") Section 21(b)(2) for care of a dependent under age 5 to defer payment of their tax liability for that taxable year by the amount of those expenses, but not to exceed two thousand dollars.
Section 608(b) provides for repayment of deferrals over a ten year peri- od commencing when the taxpayer is no longer taking the deferral, and in all cases requires repayment of each year's deferral over a ten-year period starting not later than five years after that deferral. Repayment is to be made without interest.
Section 608(c) provides for repayment in cases where a taxpayer moves to a residence outside New York which does not maintain tax reciprocity with New York.
Section 608(d) provides for notice from the Department to taxpayers who have taken the deferral established in Section (a) above of their deferred liability, tax year in which repayment will begin, and an esti- mate of the amount 'for which taxpayer will be liable once eligibility expires.
Section 608(f) directs regulations to permit the repayment of deferrals through tax withholding and to address repayment in cases of divorce.
Justification
Childcare costs are one of the greatest expenses for families with young children in New York State. New York families face some of the highest childcare costs in the nation, including average annual costs from $10,556 to $14,144 per year for an infant and $9,776 to $11,700 for a four-year-old.
Childcare costs exceed housing costs for many families and consume a significant percentage of a family's income. And these costs come at a critical time for families, when the care provided to children has the greatest impact on their long-term development and when many young fami- lies are just starting out and working to make other investments.
At the same time, affordable childcare is critical for working families, and can have positive impacts on children's health and long-term devel- opment and women's participation in the workforce, among other benefits. By allowing families to defer up to $2,000 of their state tax liability each year while young children are in childcare, the "Childcare Advance" would make childcare substantially more affordable for thousands of New York families and result in millions per year in savings and financial returns.
Legislative history
2017-18: S.7007 Referred to Investigations and Government Operations 2016: S6714/A9699 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS/referred to ways and means
Fiscal implications
To be determined.
Effective date
Tax year for the year in which the legislation becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.