BILL NUMBER: S771

SPONSOR: COONEY
 
TITLE OF BILL:

An act to amend the tax law, in relation to the calculation of the
empire state child credit

 
PURPOSE:

This bill amends Paragraph 1 of subsection (c-i) of section 606 of the
tax law, as amended by section i of part P of chapter 59 of the laws of
2018.

 
SUMMARY OF PROVISIONS:

Eligible resident taxpayers shall be allowed a credit as provided herein
equal to the greater of (one): A) five hundred dollars times the number
of qualifying children of the taxpayer who are four years of age or
older and one thousand dollars times the number of qualifying children
of the taxpayer who are less than four years of age; or (B) the applica-
ble percentage of the child tax credit allowed the taxpayer under
              

section twenty-four of the internal revenue code for the same taxable
year for each qualifying child.

Provided, however, in the case of a taxpayer whose federal adjusted
gross income exceeds the applicable threshold amount set forth by
section 24(b)(2) of the Internal Revenue Code, the credit shall only be
equal to the applicable percentage of the child tax credit allowed the
taxpayer under section 24 of the Internal Revenue Code for each qualify-
ing child. For the purposes of this subsection, a qualifying child shall
be a child who meets the definition of qualified child under section
24(c) (1) of the internal revenue code (and is at least four years of
age). The applicable percentage shall be thirty-three percent. For
purposes of this subsection, any reference to section 24 of the Internal
Revenue Code shall be a reference to such section as it existed imme-
diately prior to the enactment of Public Law 115-97.  To be eligible for
the tax credit, a resident taxpayer must have a New York State adjusted
gross income of less than: $75,000 for an individual who is not married;
$110,000 in the case of a joint return; and $55,000 in the case of a
married individual filing a separate return.

 
JUSTIFICATION:

New York children are more likely to live in poverty than in 31 other
states. This is not a new trend. For more than a decade, the percentage
of New York children living in poverty has stagnated at about 20%. And,
due to structural inequities, child poverty among New York children of
color has long exceeded 30%. In some New York communities, the child
poverty rate approaches 50%. Currently, 743,000 New York children live
in poverty, with an additional 795,000 children residing in low-income
households living between loo and 200% of the poverty level. That is
over 1.5 million New York children living in families struggling to pay
rent, heat their homes, get transportation, and feed their children.
Notably, the younger the child, the more likely the child is to experi-
ence poverty, with babies and toddlers under age three experiencing
poverty at the highest rate (23.4%), exactly when they are most vulner-
able to poverty's impacts. Recently, the federal administration has
proposed numerous changes to federal law and regulations, including
changes to the public charge rule, alterations to SNAP, and the manner
in which the official poverty measure is calculated, that, if enacted,
could dramatically reduce anti-poverty supports for children and fami-
lies in New York and across the nation. Accordingly, now more than ever,
New York must make reducing child and family poverty a top state priori-
ty - this year, and for the next decade. With the 14th strongest economy
in the nation,6 and a $173 billion annual budget, New York certainly has
the means to tackle child poverty. Instead, New York leaders have made
the choice, year after year, to allow hundreds of thousands of New York
children to experience poverty. And they have repeatedly made that
choice even though it is now well understood that experiencing poverty
as a child can cause devastating and enduring harm to children's phys-
ical and mental health, educational success, and future earnings.

When fully enacted, for Monroe County alone, this bill would make an
additional 20,000 children eligible for this tax credit, and would
increase the benefit of the credit for approximately 45,000 children.
This would result in lifting about 2,400 children out of poverty, 1,650
of whom reside in the city of Rochester. The poverty rate in the city of
Rochester would decrease from 48 to 44 percent.

 
LEGISLATIVE HISTORY:

2019-2020: A.8835

2021-22: S.5866/A.3146A

 
BUDGET IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to qualified
children as defined prior to the enactment of Public Law 115-97 who do
not receive the child tax credit under the American Rescue Plan Act of
2021; provided further, that this act shall apply to all other qualified
children as defined prior to the enactment of Public Law 115-97 in the
first tax year after the child tax credit under the American Rescue Plan
Act of 2021 has ended or in taxable years commencing on or after January
1, 2024, whichever is later.