Bill > A05661

This bill modifies the New York State tax law regarding the Earned Income Credit (EIC), which is a tax benefit designed to provide financial support to low to moderate-income working individuals and families. Specifically, the bill changes the "applicable percentage" of the federal Earned Income Credit that New York State taxpayers can claim on their state taxes to 45% for taxable years beginning in 2026 and thereafter. Previously, the applicable percentage had gradually increased over time, starting at 7.5% in 1994 and reaching 30% in 2003. The bill maintains a provision that if a "reversion event" occurs—such as federal actions that significantly reduce New York's allocation of Temporary Assistance for Needy Families (TANF) block grant funds or limit the state's ability to use these funds for the Earned Income Credit—the applicable percentage would revert to 20%. The bill will take effect immediately and apply to taxable years beginning on or after January 1, 2026, providing a predictable and increased tax credit for eligible New York State taxpayers.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A5661