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New York State Commissioner of Taxation and Finance Robert L. Megna today reminded taxpayers who are preparing their personal income tax returns to take advantage of a host of family-friendly credits that lower tax bills and increase refunds.
Income tax filers who last year claimed the most popular credits - the Earned Income Tax Credit, Child and Dependent Care Credit, Empire State Child Care Credit, Household Credit and College Tuition Credit - received about $2 billion from the State in tax breaks or refunds. Some tax breaks, like the New York State and New York City Earned Income Tax Credits, may result in a refund even when no tax is owed.
Millions of New York tax filers took advantage of one or more of these popular credits.
Commissioner Megna said, "These tax credits, whether offered by the State, New York City or the federal government, are designed to provide real tax relief for working families. The credits help families meet day-to-day expenses and save for the future. We encourage all qualified taxpayers to apply for these family-friendly tax credits."
Commissioner Megna also cautioned filers against signing rapid-refund agreements that carry high interest rates. The high interest rates may actually reduce a taxpayer's refund by hundreds of dollars.
Knowing that you qualify for a particular credit can increase your weekly paycheck if you adjust future withholding. Check with your company's personnel office for more information. Below is information about the most popular tax credits available to New York State families. Some of these credits are "refundable," meaning that you could be eligible for a refund even if you owe no tax.
Earned Income Tax Credit
This refundable credit is available to working families with incomes up to $37,783 ($39,783 for married taxpayers filing jointly), depending on the number of children in your household. Taxpayers with no dependent children can earn no more than $12,590 ($14,590 for married taxpayers filing jointly). Recent changes have increased the amount of the credit and expanded eligibility. There is also a City of New York Credit. To qualify for these credits you must have worked at least part of the year. You must file form IT-215 to claim the credit. Publication 310-NY contains more information on the program.
Certain non-custodial parents may claim an enhanced EITC in place of the regular State EITC. This innovative credit is designed to encourage non-custodial parents to play an active role in the financial support of their children and to keep current their support orders as determined by the courts. See form IT-209 for instructions.
Child and Dependent Care Credit
Working parents who pay for child care may be able to claim some of those expenses as a credit on their federal and state tax returns. The credit equals 110 percent of the federal child care credit for taxpayers with incomes under $25,000. Percentages ranging from 110 percent down to 20 percent apply for those whose incomes range from $25,000 to $65,000. Taxpayers with incomes over $65,000 receive a credit equal to 20 percent of the federal credit. Parents must first qualify for the federal credit before claiming the refundable state credit. Beginning in 2007, New York City residents with incomes of $30,000 or less who paid child care expenses for children under the age of four may be eligible to claim the New York City child and dependent care credit in addition to the New York State credit.
Empire State Child Care Credit
Resident taxpayers may also claim a refundable credit equal to the greater of $100 times the number of children ages 4-16 who qualify for the federal child care credit or 33 percent of the allowed federal child credit for children ages 4-16.
College Tuition Credit/Itemized Deduction
If you, your spouse, or your dependent(s) were a student at an institution of higher education, you may be entitled for the refundable college tuition credit. The credit is up to $400 per eligible student and available to full-year New York State residents. Alternatively, you may claim a college tuition itemized deduction which is available to non-resident and part-year residents. For further information taxpayers may reference Pub 10-W FAQS: New York State College Tuition Credit and Itemized Deduction.
Household Credit
If you are married, head of household or a qualifying widow or widower with a dependent child, your income is $32,000 or less andyou can't be claimed as a dependent on another person's federal return, you can qualify for a Household Credit of up to $75, plus up to $15 for each exemption on your federal return. Single filers with incomes up to $28,000 also can qualify. New York City residents are eligible for an additional New York City Household Credit.
You can learn more by requesting free publications from the Tax Department by calling toll-free (800) 462-8100. Ask for Publication 99, "General Information On New York State and New York City Income Tax Credits." Publications and forms also are available at many local libraries, banks and post offices, or 24 hours a day by calling the Tax Department's Fax-on-demand line. To access the system, call (800) 748-3676.
Forms and publications also are available by visiting the Tax Department's web site at www.nystax.gov or by calling the Department's Call Center at 1-800-225-5829.
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Last Modified: March 17, 2008
