There have been a series of changes that have taken place with taxes in the state of New York, and the majority of these changes have had influence by the governor of New York State, Andrew Cuomo, along with with other fellow NY legislators. In March of last year, the two parties reached an agreement on the budget for the 2018/2019 year, and this was implemented on March 30th. Here are some of the key changes.
Employer Compensation Expense Tax
This bill in the budget is going to create a new ECET, or employer compensation expense tax. If any employers choose to opt in this tax, they will pay a 5% tax on their annual payroll for employees that make more than $40,000 per year. This is set to be phased at a range of over three years at progressive rates of 1.5%, 3%, and 5%. This began on January 1st and the first election date for employers who wanted to opt-in was December 1, 2018.
Charitable Gifts Trust Fund
This particular budget bill will create a new CGTF, or Charitable Gifts Trust Fund that will allow taxpayers to give towards the state’s provision of education and healthcare. These charitable trusts will qualify under section 501(c)(3) of the Internal Revenue Code, which will also allow taxpayers to make a charitable deduction for contributed amounts. In terms of why this was initiated, it’s an effort for taxpayers in the state of New York to pay their personal income tax without being a victim of the $10,000 of SALT deductions. Now, contributions can be made to Health Research Inc., the Research Foundation of the City University of New York and the State University of New York Impact Foundation.
Property Taxes
Starting on December 21, 2018, the bill will provide taxpayers with a way to pay real property taxes while avoiding the $10,000 cap. School districts will have the ability to receive monetary donations from those funds and New York City counties can establish a Reserve Fund to receive monetary donations. To claim the credit, property owners must present it to the collecting officer before the last day taxes are paid without penalty. Taxpayers who had made charitable contributions can take deductions in personal income tax.