Dear Elected Leader,

We write as strong supporters of the Working Families Tax Credit bill (S277A Gounardes/A4022A Hevesi). While we were not able to secure a potential framework for the full Working Families Tax Credit (WFTC) in the Senate one-house, we were pleased to see commitments to some of its strongest elements, outlined below, make it into the resolution. We now urge you to negotiate the below fixes to our state’s existing Empire State Child Tax Credit (ESCC) and Earned Income Tax Credit (EITC) as part of a final FY24 budget package. 

Expanding the Empire State Tax Credit to 0 - 3 year olds who are currently completely left out of the credit. A Raising NY analysis found that despite consistently ranking in the top five states in the nation for its per capita income and GDP, New York has ranked in the bottom third of the entire country for its high rate of child poverty. Children ages 0-3 are completely excluded from the current ESCC, leaving new parents to struggle with the cost of diapers and baby formula at a time when they are most at risk of slipping into poverty. 

This critical age expansion was included in both the Senate and Assembly one-house resolutions and is estimated to cost around $200 million. 

Including ITIN filers for the first time in the Earned Income Tax Credit. The EITC excludes many immigrant workers, who contribute $23.5B in taxes to New York’s state and local economy each year, even when they are on track to citizenship. When one in three New York children come from a family with at least one immigrant parent, this carveout notably excludes families who deserve to be covered.

The inclusion of ITIN filers was included in both the Senate and Assembly one-house resolutions and is estimated to cost around $65 million. 

However, the one-house budgets left out several critical pieces of credit reform. Most notably, the Senate and Assembly must eliminate the phase-in for full access to the ESCC. The regressive phase-in, which denies the full credit amount to the lowest-income taxpayers, has an outsized negative effect on our Black, Hispanic, and immigrant families. An analysis by Columbia University Center on Poverty & Social Policy found that, before the pandemic, Black and Hispanic children were 1.75 and 1.6 times, respectively, to be excluded from the Empire State Child Credit because of the income requirement than their white counterparts.

Eliminating the phase-in for families with dependents aged zero to sixteen would cost $50 million.

When New York families are given cash support in the form of refundable tax credits, they spend it on what they need. According to the Settlement House American Rescue Plan (SHARP) Impact Study, more than 90% of New York respondents spent their child tax credit funds on basic necessities such as food, clothing, rent, utilities, or school supplies. Families with children were hit hard in December when the news came that the federal government did not renew the enhanced child tax credit. We ask that New York State step up for its families and fill the gaps left by the federal government, as it has done in the past with initiatives like the Excluded Workers Fund.

While far short of the benefits provided by the full Working Families Tax Credit, which would combine the ESCC and EITC to provide larger credit amounts between $500 and $1,500 per child to all families, the abovementioned fixes to our state’s existing tax credits would represent a significant down payment towards a future WFTC while helping the state meet its goal of reducing child poverty 50% by 2032. We therefore urge you to stand strong in final negotiations with the Governor to secure these three wins for working families in our state.