BILL NUMBER: S9077
SPONSOR: GOUNARDES
 
TITLE OF BILL:
An act to amend the tax law, in relation to expanding the empire state
child credit
 
PURPOSE OR GENERAL IDEA OF BILL:
To increase the Empire State child tax credit to match the top recommen-
dation of the Governor's own Child Poverty Reduction Advisory Council.
 
SUMMARY OF PROVISIONS:
Section one of this bill amends subsection (c-1) of Section 606 of the
Tax Law to create a new, fully refundable $1,500 child tax credit for
both Social Security and Individual Taxpayer Identification Number
(ITIN) filers by tax year 2030. The tax credit would apply to all ages
under 18, be prospectively indexed to inflation, and be available in
quarterly advance increments throughout the tax year.
Section two of this bill sets the effective date.
 
JUSTIFICATION:
This bill would codify the top tax policy recommendation of the Gover-
nor's Child Poverty Reduction Advisory Council (CPRAC), which was
created under Chapter 646 of 2021 and Chapter 114 of 2022 to recommend a
package of bills that would reduce child poverty 50% by 2031. The coun-
cil is further required under its enabling statute (Section 131-zz of
the Social Services Law (SSL)) to issue annual reports on New York's
progress in reaching this 50% reduction goal, underscoring the impor-
tance of this public policy aim for the Executive and legislature who
created and approved the law. In December 2024, after years of deliber-
ation and an exhaustive literature and data review, CPRAC came to a
conclusion: the single most important tax policy reform that the state
can make to meet the goals of SSL § 131-zz would be a fully refundable
$1,500 child tax credit for all children aged zero to 17. This bill
codifies that recommendation. 1
According to CPRAC's report, more than 800,000 children, or more than 1
in 5 New York minors, are currently living in poverty. The 2022 child
poverty rate was the 4th highest in the nation, with rates dispropor-
tionately impacting Black, Hispanic, and non-English speaking families.
More than half of New York households are considered "rent burdened" by
the US Department of Housing and Urban Development (HUD), meaning they
spend more than 30% of their income on rent, and child poverty is asso-
ciated with toxic stress, mental health issues, substance abuse, inti-
mate partner violence, homelessness, and developmental challenges later
in life. Fewer than half of children in poverty are ready for school at
age five, compared to 75% of children from families with middle or high
income, and poverty costs New York state a whopping $60 billion a year
in higher healthcare costs, costs associated with crime and homeless-
ness, and lower economic activity.
CPRAC found that direct cash transfers in the form of refundable tax
credits, meanwhile, had the inverse effect, improving health and educa-
tional outcomes in the form of stronger early test scores, higher rates
of graduation, and additional work hours, resulting in increased life-
time earnings. CPRAC's data review found that "(c)ash transfers provided
to families with children have been found to increase infant brain
activity, which is associated with the development of subsequent cogni-
tive skills" and that "investments in the youngest low-income children
are one of the most effective, highest-return social investments govern-
ment can make." Noting that the 2021 expansion of the federal child tax
credit (CTC) under the Biden administration reduced child poverty by
more than 40%, accompanied by a 40% poverty spike once the expansion was
repealed, the report asserts that "increased cash transfers, including
in the form of increased child tax credits, are among the most cost-ef-
fective tools available to government to realize nearly immediate
declines in child poverty."
This bill officially codifies what the council itself admits may be the
single most effective policy tool to immediately curb the devastating
trend of child poverty. It builds upon a series of smaller Empire State
child tax credit (ESCC) improvements in recent history, such as the
expansion of the ESCC to children under the age of four in the FY24
budget, who were previously excluded, a supplemental child tax credit
paid out in the summer and fall of 2024, and, most recently in the FY26
budget, a sizable expansion of the maximum available credit from $330 to
$1,000 for children aged zero to three and $500 for children aged four
to sixteen. The state must ensure that it builds upon these recent
successes by following the advice of its own panel of experts and codi-
fying their top tax policy recommendation: an increase of the ESCC to
$1,500, with no age distinctions.
This bill phases this expansion in over five years while indexing the
final credit amount to inflation (another CPRAC recommendation on page
20 of the report). It also improves upon the council's recommendation by
allowing for quarterly advance payments, which studies show can have an
outsize impact on reducing poverty, and extending ESCC eligibility to
all minors, eliminating the arbitrary age 17 cutoff. The council
projects that a $1,500 ESCC for 0 to 16-year-olds alone could result in
a 23.2% child poverty reduction, and that, when combined with a series
of other policy reforms such as a statewide SNAP benefit, a state hous-
ing voucher program, and an increase in Cash Assistance grants, this
expansion will reduce child poverty by 50.5%, including a 54.2%
reduction for Black families and a 53.3% reduction for Hispanic fami-
lies. This will result in an average of $2,075 more across more than 1.5
million households, and an overall poverty reduction of 8.6% in New York
City and 8.3% upstate.
Finally, CPRAC estimates that of all of the proposed reforms in its
report, an expansion of the ESCC is one of the most feasible, as it
could be immediately implemented with minimal administrative burden
("Because the ESCC is an existing credit, the proposals outlined above
and the technical changes they entail could be implemented by existing
Agency staff, with no or very minimal additional fiscal. While system
upgrades would be necessary to implement these reforms, such as form and
instruction changes, and behind-the-scenes programming and rule changes,
these costs would be absorbed as normal course of business.")
The tax credit expansion in this bill checks all the boxes: incredibly
impactful, low-cost and easy to implement, and broadly popular with all
taxpayers. The ESCC is one of the best public expenditures on the books,
as it slashes poverty while boosting fiscal stability and local econo-
mies. With $1.25 generated for every $1 in federal spending on the
federal CTC, it's clear that refundable child tax credits lead to a high
return on investment. This bill thus represents a common sense way to
meet our state's statutory child poverty reduction goals while fostering
economic growth and ending generational poverty.
 
PRIOR LEGISLATIVE HISTORY:
None
 
FISCAL IMPLICATIONS:
TBD
 
EFFECTIVE DATE:
This act shall take effect immediately.
1 Child Poverty Reduction Advisory Council 2024 Recommendations and
Progress Report. New York State Child Poverty Reduction Advisory Coun-
cil, Dec. 2024.