Bill Text: NY S06259 | 2019-2020 | General Assembly | Amended


Bill Title: Provides for advance payment of the earned income credit by employers, the commissioner of the department of tax and finance and the commissioner of New York City's department of finance.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2020-12-28 - COMMITTED TO RULES [S06259 Detail]

Download: New_York-2019-S06259-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         6259--C

                               2019-2020 Regular Sessions

                    IN SENATE

                                      May 30, 2019
                                       ___________

        Introduced by Sens. BENJAMIN, LIU -- read twice and ordered printed, and
          when printed to be committed to the Committee on Budget and Revenue --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee -- recommitted to the Committee on Budg-
          et and Revenue in accordance with Senate Rule 6, sec. 8  --  committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to  said  committee  --  committee  discharged,  bill amended, ordered
          reprinted as amended and recommitted to said committee

        AN ACT to amend the tax law and the administrative code of the  city  of
          New York, in relation to advance payment of the earned income credit

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The tax law is amended by adding a new section 679 to  read
     2  as follows:
     3    §  679.  Advance  payment  of earned income credit.  (a) General rule.
     4  Except as otherwise provided in this  chapter,  the  commissioner  shall
     5  provide  for  the  pre-payment of the earned income credit to qualifying
     6  employees.
     7    (b) Earned income eligibility certificate. For purposes of this  arti-
     8  cle,  an  earned income eligibility certificate is a statement furnished
     9  by an employee to the commissioner which:
    10    (1) certifies that the employee will be eligible to receive an  earned
    11  income credit or an enhanced earned income credit provided by subsection
    12  (d)  or (d-1) of section six hundred six of this article for the taxable
    13  year,
    14    (2) certifies that the employee has one or  more  qualifying  children
    15  for such taxable year,
    16    (3)  certifies that the employee does not have an earned income eligi-
    17  bility certificate in effect for the calendar year with respect  to  the
    18  payment of wages by another employer, and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD13069-09-0

        S. 6259--C                          2

     1    (4)  states  whether or not the employee's spouse has an earned income
     2  eligibility certificate in effect.
     3    For  purposes of this section, a certificate shall be treated as being
     4  in effect with respect to a spouse if such  a  certificate  will  be  in
     5  effect  on  the  first  status  determination date following the date on
     6  which the employee furnishes the statement in question.
     7    (c) Earned income advance amount.   Four advanced  payments  shall  be
     8  made  to such qualifying employees. An estimated annual tax credit shall
     9  be determined by the commissioner in advance of the first  payment,  and
    10  shall  be  subject  to adjustment due to changes in employment or family
    11  status over the course of the year. Prior to disbursement,  the  commis-
    12  sioner  shall  ensure  that  the  qualifying  employee's  status has not
    13  changed.  The first three advanced payments shall  be  made  during  the
    14  taxable  year and shall be twenty percent of the anticipated credit. The
    15  fourth advanced payment shall be made after the tax year  is  over,  and
    16  shall  be  adjusted to match the actual credit due. Such payments shall,
    17  to the extent practicable be made available via direct deposit  and  via
    18  electronic benefit transfer (EBT) card.
    19    (d)  Form  and  contents  of  certificate.  Earned  income eligibility
    20  certificates shall be in such form and contain such other information as
    21  the commissioner may by regulations prescribe.
    22    (e) Notification. (1) The commissioner shall notify all taxpayers  who
    23  have  one  or  more  qualifying children and who receive a refund of the
    24  credit under subsection (d) or (d-1) of section six hundred six of  this
    25  article  in writing of the availability of earned income advance amounts
    26  under this  section.  Such  written  or  electronic  notification  shall
    27  include  a  clearly  labeled section or withholding forms and a separate
    28  handout with information about the advanced payment of the earned income
    29  credit in the six most common languages spoken by  individuals  in  this
    30  state.
    31    (2)  The commissioner shall provide information of the availability of
    32  earned income advance amounts  under  this  section  to  tax  preparers,
    33  accountants  and  organizations  that assist individuals in tax prepara-
    34  tion. Such information shall be distributed to qualifying individuals.
    35    (f) Coordination with advance payments of earned income credit.
    36    (1) Recapture of excess advance payments.  If any payment is  made  to
    37  the  individual by the commissioner under this section during any calen-
    38  dar year, then the tax imposed by this chapter for the individual's last
    39  taxable year beginning in such calendar year shall be increased  by  the
    40  aggregate amount of such payments.
    41    (2)  Safe  harbor  against recapture of excess advance payments. If an
    42  individual establishes that they are requesting and  receiving  payments
    43  under  this  section  in  good-faith  by establishing that they properly
    44  claimed payments under this section in the prior year and that they have
    45  not experienced a substantial change in  circumstances  such  that  they
    46  have  a  reasonable expectation of eligibility in the current year, then
    47  paragraph one of this subsection shall not apply.
    48    (3) Reconciliation of payments  advanced  and  credit  allowed.    Any
    49  increase  in  tax  under  this  subsection  shall  not be treated as tax
    50  imposed by this chapter for purposes of determining the  amount  of  any
    51  credit  (other  than  the  credit  allowed by subsection (d) or (d-1) of
    52  section six hundred six of this article) allowable under this article.
    53    § 2. The administrative code of the city of New  York  is  amended  by
    54  adding a new section 11-1763 to read as follows:
    55    §  11-1763 Advance payment of earned income credit.  (a) General rule.
    56  Except as otherwise provided in this  chapter,  the  commissioner  shall

        S. 6259--C                          3

     1  provide  for  the  pre-payment of the earned income credit to qualifying
     2  employees.
     3    (b)  Earned income eligibility certificate. For purposes of this chap-
     4  ter, an earned income eligibility certificate is a  statement  furnished
     5  by an employee to the commissioner which:
     6    (1)  certifies that the employee will be eligible to receive an earned
     7  income credit or an enhanced earned income credit provided  by  subdivi-
     8  sion (d) of section 11-1706 of this chapter for the taxable year,
     9    (2)  certifies  that  the employee has one or more qualifying children
    10  for such taxable year,
    11    (3) certifies that the employee does not have an earned income  eligi-
    12  bility  certificate  in effect for the calendar year with respect to the
    13  payment of wages by another employer, and
    14    (4) states whether or not the employee's spouse has an  earned  income
    15  eligibility certificate in effect.
    16    For  purposes of this section, a certificate shall be treated as being
    17  in effect with respect to a spouse if such  a  certificate  will  be  in
    18  effect  on  the  first  status  determination date following the date on
    19  which the employee furnishes the statement in question.
    20    (c) Earned income advance amount.   Four advanced  payments  shall  be
    21  made  to such qualifying employees. An estimated annual tax credit shall
    22  be determined by the commissioner in advance of the first  payment,  and
    23  shall  be  subject  to adjustment due to changes in employment or family
    24  status over the course of the year. Prior to disbursement,  the  commis-
    25  sioner  shall  ensure  that  the  qualifying  employee's  status has not
    26  changed.  The first three advanced payments shall  be  made  during  the
    27  taxable  year and shall be twenty percent of the anticipated credit. The
    28  fourth advanced payment shall be made after the tax year  is  over,  and
    29  shall  be  adjusted to match the actual credit due. Such payments shall,
    30  to the extent practicable be made available via direct deposit  and  via
    31  electronic benefit transfer (EBT) card.
    32    (d)  Form  and  contents  of  certificate.  Earned  income eligibility
    33  certificates shall be in such form and contain such other information as
    34  the commissioner may by regulations prescribe.
    35    (e) Notification. (1) The commissioner shall notify all taxpayers  who
    36  have  one  or  more  qualifying children and who receive a refund of the
    37  credit under subdivision (d) of section 11-1706 of this chapter in writ-
    38  ing of the availability of earned  income  advance  amounts  under  this
    39  section. Such written or electronic notification shall include a clearly
    40  labeled  section or withholding forms and a separate handout with infor-
    41  mation about the advanced payment of the earned income credit in the six
    42  most common languages spoken by individuals in this state.
    43    (2) The commissioner shall provide information of the availability  of
    44  earned  income  advance  amounts  under  this  section to tax preparers,
    45  accountants and organizations that assist individuals  in  tax  prepara-
    46  tion. Such information shall be distributed to qualifying individuals.
    47    (f) Coordination with advance payments of earned income credit.
    48    (1)  Recapture  of excess advance payments.  If any payment is made to
    49  the individual by the commissioner under this section during any  calen-
    50  dar year, then the tax imposed by this chapter for the individual's last
    51  taxable  year  beginning in such calendar year shall be increased by the
    52  aggregate amount of such payments.
    53    (2) Safe harbor against recapture of excess advance  payments.  If  an
    54  individual  establishes  that they are requesting and receiving payments
    55  under this section in good-faith  by  establishing  that  they  properly
    56  claimed payments under this section in the prior year and that they have

        S. 6259--C                          4

     1  not  experienced  a  substantial  change in circumstances such that they
     2  have a reasonable expectation of eligibility in the current  year,  then
     3  paragraph one of this subdivision shall not apply.
     4    (3)  Reconciliation  of  payments  advanced  and credit allowed.   Any
     5  increase in tax under this subdivision  shall  not  be  treated  as  tax
     6  imposed  by  this  chapter for purposes of determining the amount of any
     7  credit (other than the credit allowed  by  subdivision  (d)  of  section
     8  11-1706 of this chapter) allowable under this chapter.
     9    §  3. This act shall take effect one year after it shall have become a
    10  law and shall apply to taxable years beginning on or  after  such  date.
    11  Effective immediately, the addition, amendment and/or repeal of any rule
    12  or regulation necessary for the implementation of this act on its effec-
    13  tive  date  are  authorized  to  be made and completed on or before such
    14  effective date.
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