New laws to save taxpayers money

Tax credits and reductions that will save New York families and businesses almost $1 billion, an increase in the minimum wage, and procedures to cut down on Medicaid fraud highlight the list of new state laws that will take effect on January 1, 2007.

The senate majority has fought to provide substantial relief to New York’s hardworking, overburderened taxpayers. On January 1, new laws will go into effect that will save New York’s families and businesses almost a billion dollars in taxes and will protect jobs and valuable industries like manufacturing. As we move forward into a new legislative session, we remain committed to building on our record by providing greater relief to the hardworking taxpayers of New York.

Child tax credit. In 2007, a taxpayer will be allowed a personal income tax credit equal to one-third of the federal child tax credit for children between the ages of four and seventeen, saving New York parents $600 million in 2007. The child tax credit gives assistance directly to parents, helping them meet the rising costs of classroom supplies and educational materials.

Lower taxes for couples. Beginning in 2007, married taxpayers will see an increase in their standard deduction to $15,000 for joint filers and $7,500 for separate filers, eliminating the “marriage penalty.” The tax reduction will save married taxpayers $41 million in 2007. Middle-class taxpayers can celebrate the New Year knowing that we have eliminated the unfair income tax marriage penalty.

Helping our voluntary firefighters. New York has 130,000 volunteer firefighter and emergency personnel. In order to encourage more New York residents to join their local volunteer fire departments, the legislature provided a $200 personal income tax credit for volunteer firefighters and emergency personnel not receiving a special local property tax exemption, saving them $26 million.

Saving jobs. On January 1, 2007, the second phase of a three-year plan will kick in that will help New York businesses and prevent the outsourcing of jobs by eliminating the single sales factor. The single sales factor is expected to save New York businesses $43 million in 2007, and $130 million when fully implemented.

Prior to enactment of the tax reduction, corporate taxpayers apportioned taxable income and capital to New York State based on a allocation percentage that gave a fifty percent weight to sales, and twenty-five percent each to the level of New York State payrolls and property. Under that law, taxpayers who increase payroll or capital investments in the state pay higher taxes, which encouraged job outsourcing, especially in the crucial manufacturing, broadcasting and securities industries.

Commercials tax credit. On January 1, 2007, New York State will enact a $7 million tax credit pool, without sunset, allocated to qualified production companies filming or recording radio commercials in New York. The value of the program is divided between commercial activity growth, downstate jobs, and upstate jobs credits.

Increase in the minimum wage. On January 1, 2007, the minimum wage in New York State will be increased to $7.15 per hour from the existing $6.75 per hour level. In addition the minimum wage rate for tipped food service employees will be increased from $4.35 per hour to $4.60.

The increase in minimum wage is the third and final increase called for by legislation passed in 2004 that was to be phased in over three years.

Medicaid inspector general. In 2006, the legislature passed legislation establishing an independent office of medicaid inspector general within the state Department of Health. Effective January 1, 2007, the law directs the inspector to establish regulations requiring each Medicaid provider to implement medicaid provider compliance programs, in order to organize provider resources to resolve payment discrepancies and detect inaccurate billings as efficiently as possible, and to impose checks and balances on the system to prevent future recurrences.

Senator Seward’s office web site is

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