Cuts expected to save 4.8 million New Yorkers more than $2.2 billion this year
When cuts are fully phased in, middle-class taxpayers will have received income tax rate cut up to 20%; projected $4.2 billion in annual savings for 6 million filers by 2025
Legislation enacts middle-class property tax credit for resident homeowners with incomes up to $250,000; targets families with highest property tax to income burden
Gov. Andrew Cuomo on Monday announced the fiscal year 2022 budget continues support for middle-class income tax cuts to help New Yorkers recover from economic hardship during the COVID-19 pandemic. The cuts, which were enacted in 2016 and are now in their fourth year, are expected to save 4.8 million New Yorkers more than $2.2 billion in 2021. When the cuts are fully phased in, middle-class taxpayers will have received an income tax rate cut of up to 20%, saving 6 million filers a projected $4.2 billion per year by 2025. As the new rates phase in, they will be the state's lowest middle-class tax rates in more than 70 years.
The budget also provides a personal income tax credit for New York resident homeowners with incomes up to $250,000 if their total property tax exceeds a fixed percentage of their income. This framework targets New York families with the highest property tax to income burden. The calculation of this credit is capped at $350 per STAR-eligible household, while also utilizing a $250 credit minimum to further target homeowners impacted the most by high property taxes. It is expected that claims will average about $340 for 1.1 million New Yorkers, providing over $382 million in total savings. Qualified homeowners will be able to claim this new property tax relief credit for taxable years 2021, 2022 and 2023.
"Throughout the entire COVID-19 pandemic, it has become more and more difficult for many hardworking New Yorkers to pay their bills and support their families," Cuomo said. "As we continue to jumpstart our economic recovery, reopen our society safely and build a brighter future for our children, these tax cuts will provide much-needed relief by putting money back into the pockets of middle-class New Yorkers. There's no doubt that our state will bounce back stronger and better than before and, in the interim, it's critical we support the New Yorkers who helped get us through this crisis and take steps to rebuild an economy that works for all."
Senate Majority Leader Andrea Stewart-Cousins said, "We are taking a historic new step towards providing meaningful property tax relief to middle-class New Yorkers. Additionally, I am proud that this budget also delivers the promised middle-class income tax cuts. The Senate majority fought long and hard to bring this relief to homeowners, especially those paying the highest amount of their income into their property taxes. Now, over a million hard-working New Yorkers will receive this relief. It has been a challenging year for so many people in our state, and I'm pleased that, through working together, we are delivering results that will help ease financial pressures for those who need it most."
Assembly Speaker Carl Heastie said, "This year's budget was critical to helping families across the state rise from the current health and economic crises and their devastating impacts. These tax breaks are a necessary relief for so many homeowners and middle-class New Yorkers, many of whom are struggling from the far reaching effects of the pandemic. The Assembly majority will continue working to rebuild our economy and put New York families first."
The FY 2022 enacted budget continues to lower personal income tax rates for middle-class New Yorkers. In 2021, the fourth year of the multiyear tax cuts enacted in 2016, income tax rates have been lowered from 6.09% to 5.97% for taxpayers filing jointly in the $43,000-$161,550 income bracket, and from 6.41% to 6.33% in the $161,550-$323,200 income bracket. Over the first four years of the cuts, 4.8 million New Yorkers saved $6.6 billion.