S 8632: Relates to the calculation of credits for certain household and dependent care services necessary for gainful employment; removes some references to provisions in the federal budget reconciliation act of 2025.

  
  STATE OF NEW YORK ________________________________________________________________________ 8632 2025-2026 Regular Sessions  IN SENATE December 22, 2025 ___________ Introduced by Sen. GOUNARDES -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the tax law, in relation to the calculation of certain credits for dependent care services necessary for gainful employment The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Subsection (c) of section 606 of the tax law, as amended by 2 chapter 309 of the laws of 1996, paragraph 1 as amended by section 1 of 3 part M of chapter 63 of the laws of 2000, paragraph 1-a as added by 4 section 1 and paragraph 1-b as added by section 2 of part T of chapter 5 59 of the laws of 2017, and paragraph 4 as amended by section 2 of part 6 J of chapter 59 of the laws of 2014, is amended to read as follows: 7 (c) Credit for certain household and dependent care services necessary 8 for gainful employment. 9 (1) A taxpayer shall be allowed a credit as provided herein equal to 10 the applicable percentage of the credit allowable under section twenty- 11 one of the internal revenue code for the same taxable year (without 12 regard to whether the taxpayer in fact claimed the credit under such 13 section twenty-one for such taxable year). The applicable percentage 14 shall be the sum of (i) twenty percent and (ii) a multiplier multiplied 15 by a fraction. [For taxable years beginning in nineteen hundred ninety- 16 six and nineteen hundred ninety-seven, the numerator of such fraction 17 shall be the lesser of (i) four thousand dollars or (ii) fourteen thou- 18 sand dollars less the New York adjusted gross income for the taxable 19 year, provided, however, the numerator shall not be less than zero. For 20 the taxable year beginning in nineteen hundred ninety-eight, the numera- 21 tor of such fraction shall be the lesser of (i) thirteen thousand 22 dollars or (ii) thirty thousand dollars less the New York adjusted gross 23 income for the taxable year, provided, however, the numerator shall not 24 be less than zero. For taxable years beginning in nineteen hundred nine- 25 ty-nine, the numerator of such fraction shall be the lesser of (i) EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14217-01-5 
 S. 8632 2 1 fifteen thousand dollars or (ii) fifty thousand dollars less the New 2 York adjusted gross income for the taxable year, provided, however, the 3 numerator shall not be less than zero.] For taxable years beginning 4 after nineteen hundred ninety-nine, the numerator of such fraction shall 5 be the lesser of (i) fifteen thousand dollars or (ii) sixty-five thou- 6 sand dollars less the New York adjusted gross income for the taxable 7 year, provided, however, the numerator shall not be less than zero. The 8 denominator of such fraction shall be [four thousand dollars for taxable 9 years beginning in nineteen hundred ninety-six and nineteen hundred 10 ninety-seven, thirteen thousand dollars for the taxable year beginning 11 in nineteen hundred ninety-eight, and] fifteen thousand dollars for 12 taxable years beginning after nineteen hundred ninety-eight. The multi- 13 plier shall be [ten percent for taxable years beginning in nineteen 14 hundred ninety-six, forty percent for taxable years beginning in nine- 15 teen hundred ninety-seven, and] eighty percent for taxable years begin- 16 ning after nineteen hundred ninety-seven. Provided, however, for taxable 17 years beginning after nineteen hundred ninety-nine, for a person whose 18 New York adjusted gross income is less than forty thousand dollars, such 19 applicable percentage shall be equal to (i) one hundred percent, plus 20 (ii) ten percent multiplied by a fraction whose numerator shall be the 21 lesser of (i) fifteen thousand dollars or (ii) forty thousand dollars 22 less the New York adjusted gross income for the taxable year, provided 23 such numerator shall not be less than zero, and whose denominator shall 24 be fifteen thousand dollars. Provided, further, that if the reversion 25 event, as defined in this paragraph, occurs, the applicable percentage 26 shall, for taxable years ending on or after the date on which the rever- 27 sion event occurred, be determined using the rules specified in this 28 paragraph applicable to taxable years beginning in nineteen hundred 29 ninety-nine. The reversion event shall be deemed to have occurred on the 30 date on which federal action, including but not limited to, administra- 31 tive, statutory or regulatory changes, materially reduces or eliminates 32 New York state's allocation of the federal temporary assistance for 33 needy families block grant, or materially reduces the ability of the 34 state to spend federal temporary assistance for needy families block 35 grant funds for the credit for certain household and dependent care 36 services necessary for gainful employment or to apply state general fund 37 spending on the credit for certain household and dependent care services 38 necessary for gainful employment toward the temporary assistance for 39 needy families block grant maintenance of effort requirement, and the 40 commissioner of the office of temporary and disability assistance shall 41 certify the date of such event to the commissioner, the director of the 42 division of the budget, the speaker of the assembly, and the temporary 43 president of the senate. For the purposes of this subsection, any refer- 44 ence to section twenty-one of the internal revenue code shall be a 45 reference to such section as it existed immediately prior to the enact- 46 ment of Public Law 119-21. 47 (1-a) For taxable years beginning after two thousand seventeen, for a 48 taxpayer with New York adjusted gross income of at least fifty thousand 49 dollars but less than one hundred fifty thousand dollars, the applicable 50 percentage shall be the applicable percentage otherwise computed under 51 paragraph one of this subsection multiplied by a factor as follows: 52 If New York adjusted gross 53 income is: The factor is: 54 At least $50,000 and less 55 than $55,000 1.1682 56 At least $55,000 and less 
 S. 8632 3 1 than $60,000 1.2733 2 At least $60,000 and less 3 than $65,000 2.322 4 At least $65,000 and less 5 than $150,000 3.000 6 Provided, however, that for taxable years beginning on or after Janu- 7 ary first, two thousand twenty-six, the credit described in this 8 subsection shall be reduced by twenty dollars for each one thousand 9 dollars by which the taxpayer's New York adjusted gross income exceeds 10 five hundred thousand dollars, or, in the case of a joint return, by 11 twenty dollars for each one thousand dollars by which the taxpayer's New 12 York adjusted gross income exceeds one million dollars; provided, 13 further, that the credit shall never be reduced below zero. 14 (1-b) Notwithstanding anything in this subsection to the contrary, a 15 taxpayer shall be allowed a credit as provided in this subsection equal 16 to the applicable percentage of the credit allowable under section twen- 17 ty-one of the internal revenue code as such section existed immediately 18 prior to the enactment of Public Law 119-21 for the same taxable year 19 (without regard to whether the taxpayer in fact claimed the credit under 20 such section twenty-one for such taxable year) that would have been 21 allowed absent the application of section 21(c) of such code for taxpay- 22 ers with more than two qualifying individuals, provided however, that 23 the credit shall be calculated as if the dollar limit on amount credita- 24 ble shall not exceed seven thousand five hundred dollars if there are 25 three qualifying individuals, eight thousand five hundred dollars if 26 there are four qualifying individuals, and nine thousand dollars if 27 there are five or more qualifying individuals. 28 (2) Residents. In the case of a resident taxpayer, the credit under 29 this subsection shall be allowed against the taxes imposed by this arti- 30 cle for the taxable year reduced by the credits permitted by this arti- 31 cle. If the credit exceeds the tax as so reduced, the taxpayer may 32 receive, and the comptroller, subject to a certificate of the commis- 33 sioner, shall pay as an overpayment, without interest, the amount of 34 such excess. 35 (3) Nonresidents. In the case of a nonresident taxpayer, the credit 36 under this subsection shall be allowed against the tax determined under 37 subsections (a) through (d) of section six hundred one. The amount of 38 the credit shall not exceed the tax determined under such subsections 39 for the taxable year reduced by the credit permitted under subsection 40 (b) of this section. 41 (4) Part-year residents. In the case of a part-year resident taxpayer, 42 the credit under this subsection shall be allowed against the tax deter- 43 mined under subsections (a) through (d) of section six hundred one 44 reduced by the credit permitted under subsection (b) of this section, 45 and any excess credit after such application shall be allowed against 46 the tax imposed by section six hundred three. Any remaining excess, 47 after such application, shall be refunded as provided in paragraph two 48 hereof, provided, however, that any overpayment under such paragraph 49 shall be limited to the amount of the remaining excess multiplied by a 50 fraction, the numerator of which is federal adjusted gross income for 51 the period of residence, computed as if the taxable year for federal 52 income tax purposes were limited to the period of residence, and the 53 denominator of which is federal adjusted gross income for the taxable 54 year. 55 (5) In the case of [a husband and wife] spouses who file a joint 56 federal return, but who are required to determine their New York taxes 
 S. 8632 4 1 separately, the credit allowed pursuant to this subsection may only be 2 applied against the tax imposed on the spouse with the lower taxable 3 income, computed without regard to such credit. In the case of [a 4 husband and wife] spouses who are not required to file a federal return, 5 the credit under this subsection shall be allowed only if such taxpayers 6 file a joint New York income tax return. 7 § 2. This act shall take effect immediately and shall apply to taxable 8 years commencing on or after January 1, 2026.