Earned Income Tax Credit (EITC)

Rate (Fully-Refundable): 30% of the federal credit, reduced by the amount of any household credit.1

Eligibility Requirements: All New York taxpayers who qualify for the federal credit are automatically eligible.

Latest Legislative Action:

  • During the 2016 legislative session, lawmakers considered several bills that would strengthen the state’s EITC, but the measures have all been held in committee for further consideration in 2017.
  • A04340 would increase the rate to 35% of the federal credit over two years, while A09102 would raise it further to 45%, effective for tax year 2016 and beyond.
  • A07357 would allow workers with no qualifying children to claim state earned income credit equal to 75% of the calculated credit for a filer with one qualifying child.
  • A07891 would create an additional earned income credit for youth workers between the ages of 17 and 24 who currently are not eligible for the federal EITC. The bill would offer these individuals 130% of the federal credit that would be available if they had reached the minimum age required. Additionally, the measure would increase the state’s standard income tax deduction for single 18 to 24 year-olds as well as offer a deduction for interest paid on qualifying student loans.
  • A07486 would require that the state credit be paid in monthly installments rather than all at once, aiming to reduce binge spending and encourage smarter monthly budgeting practices by working poor recipients.

Notes:

  • In addition to the state credit, New York City is one of only three cities to offer its own EITC at 5% of the federal credit.
  • New York also offers a refundable Non-Custodial Parent Earned Income Credit, which allows non-custodial parents who are paying child support to claim an additional credit as long as they completely up to date on their payments. These individuals are eligible for a credit of either 20% of the federal EITC that would apply if the non-custodial child qualified or 25% of the federal EITC as calculated for a childless worker.

Child Tax Credit (CTC)

Rate (Fully-Refundable): Greater of $100 per qualifying child or 33% of the taxpayer’s allowed federal CTC.2     

Eligibility Requirements: All New York taxpayers who qualify for the federal credit are automatically eligible.

Latest Legislative Action: During the 2016 legislative session, lawmakers considered a bill that would increase the state credit’s rate to 60% of the federal credit. The measure remains in committee to be reviewed for further action in 2017.

Notes: The state’s CTC is known as the Empire State Child Credit.

Child and Dependent Care Tax Credit (CDCTC)

Rate (Fully-Refundable):3 Rates as a percentage of the federal credit change with the filer’s income according to the following brackets, two of which follow an incremental phase-out with additional income. See 2015 Form IT-216-I for a detailed breakdown.

Adjusted Gross Income Percentage of Federal Credit
$25,000 and under 110%
$25,000 to $40,000 110% to 100%
$40,000 to $50,000 100%
$50,000 to $65,000 100% to 20%
$65,000 and above 20%

Eligibility: All New York taxpayers who are qualify for the federal CDCTC are automatically eligible.

New York Tax Credits In The News

3

Oct 16

News Round-up: October 3, 2016

Time is running out to cast your vote to include a question about tax credits for workers and their families in the upcoming presidential debate. Learn more here.
Read More

15

Mar 16

Weekly News Round-up: March 15, 2016

Today is VITA Awareness Day 2016, and advocates across the country are celebrating free and reliable tax preparation for low-wage workers. A new breakdown of IRS data conducted by the Corporation for Enterprise Development (CFED) found that Volunteer Income Tax Assistance (VITA) preparers have higher accuracy rates than paid tax preparers. VITA volunteers helped return nearly $4 billion in tax refunds to more than 3 million lower-income Americans in 2015, the data showed (CFED, TCWF).
Read More

5

Oct 15

Weekly News Round-up: October 5, 2015

On Thursday, the Senate Finance Committee discussed ways to reduce improper Earned Income Tax Credit (EITC) payments. Leading up to the committee’s meeting, the Center on Budget and Policy Priorities (CBPP) released an updated brief on steps lawmakers can take to reduce the credit’s error rate (The Hill, CBPP).
Read More
For More State Information:

Frederick Floss
Executive Director
Fiscal Policy Institute
www.fiscalpolicy.org
(518)786.3156
floss@fiscalpolicy.org

Sources:
  1. Earned Income Credit Information Page, New York Department of Taxation and Finance
  2. Empire State Child Credit Information, New York Office of Temporary and Disability Assistance
  3. Child and Dependent Care Tax Credit Information, Ibid.