What's happening
This bill allows New York City to impose a tax surcharge on high earners to fund early childhood education programs from 2026 to 2030.
Why it matters
Targets high earners. The surcharge only applies to individuals (or households) with city taxable income over $500,000, meaning it is narrowly aimed at the wealthiest residents, potentially addressing income inequality and focusing new revenue on those best able to pay.
Local control with flexibility. While the bill authorizes a surcharge of up to 4.3%, it allows New York City to set lower rates and create different brackets depending on filing status or income, giving city lawmakers flexibility to tailor the tax to local needs or political realities.
Dedicated funding for early childhood education. All funds raised from this surcharge must be used exclusively for early childhood education programs, establishing a direct link between the tax and enhanced educational services for young children in the city.
Built-in sunset and accountability. The authorization for the surcharge is temporary (2026–2030), requiring future legislative action to extend it, and local laws must be enacted by the end of 2025, fostering ongoing evaluation of the surcharge’s effectiveness and impact.
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Who cares
Headline styles
Tax Surcharge for Early Education
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
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
1662
2025-2026 Regular Sessions
IN SENATE
January 13, 2025
Introduced by Sen. BAILEY -- 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 authorizing a childhood education surcharge on the personal income tax for cities having a population of one million or more persons; and providing for the repeal of such provisions upon expiration thereof
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 1304-E to read as follows:
§ 1304-E. Tax surcharge for early childhood education. (a) In addition to the taxes authorized by subsection (a) of section thirteen hundred one of this article, any city having a population of one million or more persons that imposes such taxes is hereby authorized and empowered to adopt and amend local laws imposing in any such city for all taxable years beginning on or after January first, two thousand twenty-six, a tax surcharge on the city taxable income of every city resident married individuals filing joint returns, resident married individuals filing separate returns, resident surviving spouses, resident heads of households, resident unmarried individuals, and resident estates and trusts, at a rate of up to: If the city taxable income is: the tax surcharge is:
Not over $500,000 0 Over $500,000 4.3 % of city taxable income
(b) A city imposing a tax surcharge pursuant to the authority of this section may, by local law, impose such surcharge at a rate that is less than the percentages set forth in subsection (a) of this section, and may impose such tax at more than one rate depending upon the filing
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04724-01-5
status and city taxable income of such city resident individual, estate, or trust.
(c) A tax surcharge imposed pursuant to the authority of this section shall be administered, collected, and distributed by the commissioner in the same manner as the other taxes imposed pursuant to the authority of this article, and all of the provisions of this article, including section thirteen hundred ten of this article, shall apply to the tax surcharge authorized by this section; provided, however, that the provisions of section thirteen hundred thirteen of this article directing payment of taxes to the New York city transitional finance authority shall not apply to any such surcharge.
(d) Notwithstanding any provision of this section or of section thirteen hundred thirteen of this article to the contrary, the total revenue from the tax surcharge imposed pursuant to the authority of this section, including interest and penalties, which the state comptroller is required to pay to the chief fiscal officer of the city imposing the tax surcharge for payment into the treasury of such city shall be credited to the general fund of such city and shall be applied exclusively to or in aid or support of the early childhood education programs of such city.
(e) A local law enacted pursuant to this section shall be applicable only if it has been enacted on or before December thirty-first, two thousand twenty-five. A certified copy of such local law shall be mailed by registered mail to the department at its office in Albany within fifteen days of its enactment. However, the department may allow additional time for such certified copy to be mailed if it deems such action to be consistent with its duties under this article.
§ 2. This act shall take effect immediately and shall apply to all tax years commencing on and after January 1, 2026; provided, however, that the provisions of this act shall expire and be deemed repealed December 31, 2030.
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 authorizing a childhood education surcharge on the personal income tax for cities having a popu- lation of one million or more persons; and providing for the repeal of such provisions upon expiration thereof
Purpose or general idea of bill
To authorize a city of one million or more to adopt or amend local laws providing for a tax surcharge for taxpayers making $500,000 or more for aid to early childhood education and after school programs. This tax will sunset after five years.
Summary of specific provisions
The bill adds new sections to the tax law that would allow cities with a population of one million or more to impose a tax surcharge for early childhood education programs. The bill contains the above-referenced sunset provision.
Justification
New York City's remarkable turnaround in crime-fighting in the mid-to- late 1990s was funded, in part, by a temporary surcharge in the personal income tax. The surcharge ended in 1998. A similar surcharge is now necessary to fund a turnaround in our city's early childhood education programs.
Prior legislative history
2017-18: Referred to Investigations and Government Operations
2019-20: Referred to Investigations and Government Operations
2021-22: Referred to Investigations and Government Operations
2023-24: Referred to Investigations and Government Operations
Fiscal implications
None.
Effective date
Immediately, with provisions.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.