New tax relief for thousands of small businesses and millions of middle class New Yorkers
Topics: NEW YORK
The plan will provide $100 million in tax relief for 195,000 small businesses through increasing a tax return adjustment to reduce small businesses’ gross business income.
Governor Hochul will provide $100 million of relief for 195,000 small businesses
Additionally, the Governor will create new, and increase existing, tax credits to support New York’s farms and food production overall.
To accelerate the economic recovery and deliver relief to New Yorkers, Governor Hochul will:
Current law allows for a 5 percent subtraction modification benefitting just 5,000 taxpayers each year
In simple terms, a subtraction modification allows a taxpayer to lower its gross income by an amount equal to a certain percentage of its net business income, before calculating the amount of taxes owed. Current law allows for a 5 percent subtraction modification for sole proprietorships and farm businesses with incomes of less than $250,000 — benefitting just 5,000 taxpayers each year.
Applying the full effective cut to the 2023 tax year will accelerate two years of tax cuts, providing relief for 6.1 million New Yorkers
Accelerate $1.2 Billion in Middle Class Tax Cuts for 6 Million New Yorkers: In 2018, New York began phasing in a middle-class tax cut, and the cut is not currently scheduled to be fully implemented until 2025.
To reflect the economic devastation brought on by COVID-19 and rather than waiting for small, incremental benefits to take effect for middle class taxpayers, Governor Hochul will accelerate relief for families and start providing the full benefit of the tax cut two years earlier – fully phasing-in the middle class tax cut beginning in the 2023 tax year, the earliest time possible.
Applying the full effective cut to the 2023 tax year will accelerate two years of tax cuts, providing relief for 6.1 million New Yorkers.
Deliver a $1 Billion Property Tax Rebate for More Than 2 Million New Yorkers: With New Yorkers facing the costs of inflation in the supermarket and at the pump, all while still enduring the economic impacts of COVID-19, Governor Hochul will provide much needed relief through a property tax rebate program that will return tax dollars to middle- and low-income households.
More than 2 million New Yorkers will be eligible for the rebate, with low-income households and seniors receiving higher benefits. Under the Governor’s plan, eligible homeowners will receive their benefit in the Fall of 2022, to the tune of $1 billion.
Increase Existing Tax Credits and Create a New Credit to Support Food Production: Farm labor is among the fastest-growing costs of agricultural production in New York. To help farms meet this challenge, Governor Hochul will increase an existing workforce tax credit and create a new one, while also expanding an investment tax credit for equipment to complement the workforce and address shortages. ■