Recent legislation that has affected tax expenditures

Recent legislation that has affected tax expenditures

Recently enacted state legislation has added, deleted, or modified various provisions in this year’s report.

Additions

• For taxable years beginning on or after January 1, 2025:
  • a new refundable credit for resident living organ donors is available for personal income taxpayers.
  • a new refundable Empire State independent film production credit, administered by the Governor’s Office for Motion Picture and Television Development, is available under the corporate franchise tax and the personal income tax.
  • a new refundable credit for semiconductor research and development, administered by Empire State Development, is available under the corporate franchise tax and the personal income tax.
  • a new refundable credit for semiconductor manufacturing workforce training, administered by Empire State Development, is available under the corporate franchise tax and the personal income tax.

Modifications

• For tax years 2025 through 2027, the Empire State child credit is temporarily decoupled from the federal child credit and is increased to $1,000 per child under the age of four for tax years 2025 through 2027. The credit for children aged four to sixteen is $330 per child in 2025 and $500 per child in 2026 and 2027.
• For taxable years beginning on or after January 1, 2025, farm employers who indirectly paid eligible farm overtime through a qualified professional employer organization are eligible to claim the farm employer overtime credit. These farm employers must apply to the Department of Agriculture and Markets to receive a certificate allowing them to claim 2024 and 2025 expenses on their 2025 tax return. Beginning in tax year 2026, all farm employers must receive a certificate from the Department of Agriculture and Markets to claim the credit.
• The following changes apply to applications for the Empire State film production credit received on or after January 1, 2025:
  • An additional 10 percent credit is available for qualified production costs attributable to musical scoring.
  • A new Production Plus Program is established within the Empire State film production credit to allow an additional 5-10 percent credit to production companies that produce multiple projects in New York State.
  • The bifurcation/trifurcation claiming period is eliminated.
• For applications for the Empire State film post-production credit received on or after January 1, 2025, the eligibility criteria to claim credit for participation in program and for visual effects or animation post-production costs are lowered.
• The digital gaming media production credit is amended by lowering the production cost threshold, increasing the maximum wages paid that are considered eligible production costs and expanding the definition of digital gaming media production costs.
• The geothermal tax credit is increased to $10,000 for qualified systems placed in service on or after July 1, 2025. For taxable years beginning on or after January 1, 2026, the credit will become refundable for taxpayers below certain income thresholds.
• The low-income housing credit annual allocation is increased from $15 million to $30 million in 2025 and carried through every year at $30 million through 2029.
• The New York City musical and theatrical production credit is extended through tax year 2027 and increased by an additional $100 million in total available credit over the next two years.
• The following credit changes apply to tax years beginning on or after January 1, 2025:
  • Enhancements have been made to the Excelsior Jobs Program to add increased tax credits for semiconductor supply chain projects.
  • The credit for employment of persons with disabilities is increased to a flat $5,000 credit for qualified first or second-year wages under the corporate franchise tax and the personal income tax.
  • The Newspaper and Broadcast Media Jobs Program credit is amended to clarify eligibility requirements for businesses with publications in more than one market.
  • The real property tax (circuit breaker) credit calculation is simplified by changing the basis of the credit from household income to federal adjusted gross income, condensing the credit brackets, creating a fixed credit amount that varies by income, and increasing the minimum credit amounts to $150 for seniors and $50 for taxpayers under age 65.
• The Jobs Retention Tax Credit Program is broadened to eliminate the strategic industries requirement and the credit amount is increased based on the number of employees for businesses located in a county where an emergency has been declared on or after June 1, 2025.
• The following tax credits have been extended:
  • The Empire State film production and post-production credits are extended two years to taxable years beginning before January 1, 2037.
  • The Excelsior Jobs Program is extended for five years from 2029 through 2034.
  • The clean heating fuel credit is extended for three years to taxable years beginning before January 1, 2029, and applies to purchases of bioheating fuel for residential purchases before January 1, 2029.
  • The alternative fuels and electric vehicle recharging property credit is extended for three years to taxable years beginning before January 1, 2029.
  • The workers with disabilities credit is extended for three years to taxable years beginning before January 1, 2029.
  • The hire a vet credit is extended for three years and is available for tax years beginning before January 1, 2029 for veterans who begin employment before January 1, 2028.
  • The musical and theatrical production credit is extended for four years to taxable years beginning before January 1, 2030.
  • The farm workforce retention credit is extended for three years to taxable years beginning before January 1, 2029.
• Effective May 9, 2025, property transfers for conservation and historic preservation to certain non-profit organizations are exempt from the mansion tax.
• For taxable years beginning on or after January 1, 2026, upon approval by the New York State Office of Parks, Recreation and Historic Preservation, a project is allowed a one-time transfer of the rehabilitation of historic properties credit.
• The personal income tax rates for certain brackets are permanently reduced gradually over two years beginning in tax year 2026. The temporary high income personal income tax rates are extended for five years through 2032.
• The sales tax exemption for certain vending machine sales of candy, juice, soft drinks and bottled water is extended through May 31, 2026.

Deletions

• The subtraction modification for unreimbursed organ donation expenses sunsets for taxable years beginning on or after January 1, 2025.
• The Employee Training Incentive Program is repealed for tax years beginning on or after January 1, 2029.