With all of the federal tax changes starting in 2018, one of the questions that follows is how does this impact New York? Some good news for New York residents is the NYS Senate passed a bill to protect taxpayers from a $1.5 Billion State Tax Hit, from changes imposed under the Tax Cuts and Jobs Act. However, the bill still has to go to Assembly, and then to Governor Cuomo for approval. NYS residents are not in the clear from this tax hike yet.
What is in the bill and why is it important? In the past, New Yorkers could only itemize their deductions if they were able to itemize on their federal return. However, the New York State Senate recently passed a bill, sponsored by Senator Simcha Felder, that will decouple state tax law from the federal changes recently approved. Senator Felder stated that "we’re responsible to do everything in our power to save hardworking, over-taxed New Yorkers from any addtional tax burdens. New Yorkers shouldn’t be the collateral damage of federal tax reform. This bill rights an egregious injustice that would have cost New York taxpayers billions! We will continue to work to keep taxes down and New York affordable for the individuals, families and seniors who live, thrive and succeed here.”
The proposed bill would allow New Yorkers to itemize on their state return, even if they claim the standard deduction for federal purposes. This would allow for taxpayers to deduct their full property tax payments, and other deductions.
According to the New York State Senate, the bill is part of the Senate Majority's comprehensive "Affordability Agenda" and was created in direct response to many of the significant concerns raised about the state income tax ramifications of the Federal Tax Cuts and Jobs Act. You can read more about the State's Affordability Agenda here. As mentioned above, the New York State Senate has approved the bill which now goes to Assembly. If it passes through the Assembly, it will go to Governor Cuomo for approval. The Assembly has not yet acted on this bill, so more details to come.
For more on this topic visit the New York State Society of CPA's article "NYS Senate Approves Bill Decoupling State from Federal Tax Code."
For Questions on the Tax Cuts & Jobs Act Contact on of our Tax Reform Experts Today.