The state of New York has made the following tax law changes for tax year 2021:
What general changes were made?
Subtraction for student loan forgiveness awards:
For tax years beginning after 1/1/2022, taxpayers will be allowed to subtract student loan forgiveness awards made by the state to the extent the award was included in the federal Adjusted Gross Income.
Supplemental payments for Empire State child tax credit and earned income credit:
New York Residents are eligible for a supplemental payment if they meet the following:
- Their 2021 return (including extensions) were filed on time, and
- they received an Earned Income Credit (or noncustodial parent New York State Earned Income Credit) of at least $100, or an Empire State child tax credit.
The amount of the supplemental payment was 25% of the amount of earned income credit (or noncustodial parent New York State earned income credit) you received for 2021. If you received an Empire State child credit for 2021, you received 25%-100% of that amount based on your federal adjusted gross income. No payments were issued if the Empire State child credit was less than $25.
What changes have been made to existing New York credits?
Brownfield Redevelopment Tax Credit:
Multiple changes have been made to the Brownfield Redevelopment Tax Credit.
- "The credit was extended for sites accepted into the Brownfield Cleanup Program prior to January 1, 2033 that have received a Certificate of Completion (COC) prior to January 1, 2037.
- The period to claim the on-site groundwater remediation credit component has been extended to seven years after the COC was issued for qualified sites issued a COC on or after July 1, 2015, but on or before June 24, 2021.
- The period to claim the tangible property component has been extended to 15 years after the COC was issued for qualified sites issued a COC on or after March 20, 2010, but before December 31, 2015.
- The period to claim the site preparation credit component has been extended to seven years after the COC was issued for qualified sites issued a COC on or after July 1, 2015, but on or before June 24, 2021.
- Site preparation costs for a site issued a notice of acceptance on or after July 1, 2015, but on or before June 24, 2021, includes all costs paid or incurred within 84 months after the last day of the tax year in which the COC is issued.
- Starting in tax year 2022, stadiums, baseball parks, basketball courts, and other athletic facilities are considered buildings provided they comply with track 1 remediation standards [as defined in NY-CRR section 375-3.8(e)(1)]. Components of such sites (including sports field turf, site lighting, sidewalks, access and entry ways, and other improvements added to land) are considered structural components of buildings under the Internal Revenue Code and are included in the definition of tangible property for the purposes of this section." (tax.ny.gov)
Clean Heating Fuel Credit:
The clean heating fuel credit has been extended for purchases of bioheating fuel made before January 1, 2026.
The Empire State Apprenticeship Tax Credit:
This credit has been extended through December 31, 2028.
Investment Tax Credit:
The investment tax credit rate for eligible farmers who place qualifying property in service on or after April 1, 2022, is 20%.
Empire State Film Production and Empire State Film Post-Production Tax Credits:
Both credits have been extended through tax year 2029.
New York City Earned Income Credit:
For tax years beginning after 1/1/2022, the New York City Earned Income Credit has increased. The credit was previously 5% of the federal Earned Income Credit, but it will now range from 10% to 30% of the federal credit.
New York Youth Jobs Program Tax Credit:
This credit has been extended through 2027.
Restaurant return-to-work Tax Credit:
The submission date for the application for the restaurant return-to-work credit was extended to May 1, 2022. The credit must be claimed in the tax year that includes December 31, 2022.
For more information about the new voluntary contributions, please refer to the New York IT-201 instructions.