S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4351
                              2015-2016 Regular Sessions
                                 I N  A S S E M B L Y
                                   January 30, 2015
                                      ___________
       Introduced  by M. of A. TEDISCO -- read once and referred to the Commit-
         tee on Ways and Means
       AN ACT to amend the tax law, in relation to establishing  a  tax  credit
         for low income individuals subject to the federal self-employment tax
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. Legislative intent. The legislature recognizes the need  to
    2  alleviate the tax burden of low income individual taxpayers whose income
    3  is largely derived from self-employment and therefore affected by feder-
    4  al  self-employment taxes to a degree disproportionate with such taxpay-
    5  ers' level of disposable income. This circumstance  hinders  many  newly
    6  started  businesses  in the state. Therefore, this act provides a state-
    7  level credit to provide relief to these taxpayers.
    8    S 2. Section 606 of the tax law is amended by adding a new  subsection
    9  (ccc) to read as follows:
   10    (CCC)  SELF-EMPLOYED  TAXPAYER  CREDIT.    (1)  GENERAL.  A  QUALIFIED
   11  SELF-EMPLOYED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED
   12  BY THIS ARTICLE EQUAL TO TWENTY-FIVE  PERCENT  OF  HIS  OR  HER  FEDERAL
   13  SELF-EMPLOYMENT  TAX LIABILITY FOR THE YEAR, BUT NOT EXCEEDING A MAXIMUM
   14  AMOUNT OF FIVE HUNDRED DOLLARS, AND SUBJECT  TO  PHASE-OUT  AS  PROVIDED
   15  UNDER PARAGRAPH THREE OF THIS SUBSECTION.
   16    (2)  DEFINITION  OF  "QUALIFIED  SELF-EMPLOYED  TAXPAYER". A QUALIFIED
   17  SELF-EMPLOYED TAXPAYER IS AN INDIVIDUAL TAXPAYER,  WHOSE  FEDERAL  GROSS
   18  INCOME FOR THE TAX YEAR IS BELOW FORTY THOUSAND DOLLARS, AND WHOSE BUSI-
   19  NESS  INCOME IN THE YEAR IS AN AMOUNT OF AT LEAST SEVENTY PERCENT OF HIS
   20  OR HER FEDERAL GROSS INCOME. BUSINESS ENTITIES SHALL NOT BE QUALIFIED.
   21    (3) MAXIMUM CREDIT PHASE-OUT.  THE  MAXIMUM  ALLOWED  CREDIT  OF  FIVE
   22  HUNDRED  DOLLARS  SHALL  BE  REDUCED  DOLLAR  FOR DOLLAR FOR EACH DOLLAR
   23  BEYOND THIRTY-NINE  THOUSAND  FIVE  HUNDRED  DOLLARS  OF  FEDERAL  GROSS
   24  INCOME,  SUCH  THAT  THE  CREDIT  IS COMPLETELY PHASED OUT UPON REACHING
   25  FORTY THOUSAND DOLLARS OF FEDERAL GROSS INCOME.
   26    S 3. This act shall take effect immediately and shall apply to taxable
   27  years beginning on or after January 1, 2016.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD02636-01-5