NYS Budget Highlights

The approved State budget totals $212 billion; Even with federal aid, (of which $5.5 billion will be used this fiscal year) the budget increases taxes by $3.5 billion in 2022 and $4.3 billion in 2023.

 

The $212 billion was $18 billion above the Executive proposal, and $39 billion, or 22.5%, above the FY 2020.

 

Rate Changes

 

    • An increase in the corporate franchise tax rate from 6.5% to 7.25% (income over $5 million)
      • For tax years 2021, 2022 and 2023, then goes back to 6.5%.
      • This excludes New York manufacturers or qualified emerging technology companies.
    • The reimposition of alternative capital base tax at a rate of 0.1875%
      • For tax years 2021, 2022 and 2023, then goes back to 0%
      • This excludes qualified manufacturers, qualified emerging technology companies, and cooperative housing corporations.
    • It is estimated these changes will bring in $750 million in 2022 and $1 Billion in 2023
    • New High Earner PIT increases, this change introduces 3 new tax brackets, through 2023. It also includes a temporary 8.82% PIT rate through 2027.
    • Rates and brackets for married/joint filers will be:
      • 9.65% for income between $2.155 and $5 million,
      • 10.30% for income between $5 and $25 million, and
      • 10.95% for income above $25 million
    • In total the new rates are expected to bring in $2.8 billion in 2022 and $3.3 billion in 2023

 

Other Changes

 

    • Opt-in pass through entity tax was created with an offsetting personal income tax credit. This is designed to restore the value of federal deductions that was diminished due to the SALT deduction cap for certain business types.
    • Expands the Excelsior Investment Tax Credit to include expenditures for childcare services.
    • Creates an Excelsior Child Care Services Tax credit for net new childcare services expenditures.
    • Extends the Film Tax Credit for One Year
    • Increases Wage and Withholding Filing Penalty from $50 to $100 per employee
    • The bill enacts the Pandemic Recovery and Restart Program including the Restaurant Return-To-Work Tax Credit ($35 million)
    • $440 million in property tax relief for those earning below $250,000. The credits will range between $250 and $350.
    • $35 million Restaurant Return-to-Work Tax Credit
    • Legalizes Mobile Sports Wagering
    • $15 Broadband Service for Low Income Consumers
    • $200 million in small business tax credits
    • $800 million for small business grants (more info to come)**
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