Some Tax Changes In, Others Out As State Budget Is Finanalized
The executive budget proposal unveiled at the beginning of the year by Gov. Andrew Cuomo included tax relief for both small businesses and farmers - neither of which made it into the final spending plan, negotiated as the state's fiscal picture has changed dramatically.
With a projected revenue shortfall of up to $15 billion - or maybe even more - due to the coronavirus pandemic, the state is "basically bankrupt," according to Cuomo. As a result, much of what was originally on the negotiating table was brushed aside as the budget deal came together this week.
The small business tax cut Cuomo floated would have lowered the current rate to 4 percent from 6.5 percent for some 36,000 corporate taxpayers with fewer than 100 employees and less than $390,000 in income.
Greg Biryla, the National Federation of Independent Business’s state director for New York, said the budget agreement eliminated “long-awaited tax relief targeted to true small businesses.”
“Unfortunately, the just-passed state budget, negotiated and completed under unprecedented circumstances, appears to be a missed opportunity,” Biryla added.
Some tax changes did make the cut, which became clear as the details of the budget deal started to emerge. They include:
Extension of the Excelsior tax credits program with new credit caps through 2029 (extended from 2024) and allowing use of outstanding credits through 2039 (extended from 2029). Enhanced tax credits will be available for "green" projects, for making products, providing supply-chain components, or developing technologies to reduce greenhouse gas emissions or support renewable energy.
A one-year extension of the $420 million annual film production tax credit program through 2025, though it has been reduced slightly and has new eligibility minimums.
Taxpayers eligible for the earned income tax credit will get checks from the state even if they haven’t applied for it.
The existing tax credit for long-term care insurance will be capped at $1,500 and won’t be available to taxpayers with $250,000 or more in state adjusted gross income.