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NYS Income Tax Credits: Part 2

Source: ZoofyTheJinx (Penny Mathews) / Flickr

Telling Tips is a series of articles from local experts to help you save money, make better decisions and plan for a better future.

In my last article, I summarized four credits that New York State offers. Those were the Child and Dependent Care Credit, the College Tuition Credit, the Earned Income Credit, and the Empire State Child credit. Here are a few more many of you can take advantage of:

Noncustodial Parent Earned Income Credit (Form IT-209) Requirements:

  • You did not claim the NYS Earned Income credit, and
  • You were a full-year NYS Resident, and
  • You are at least 18 years old, and
  • Your child(ren) did not live with you, and
  • You were required to pay child support for over the six months last year through a support collection unit, and
  • You are current with your child support payments

If you qualify, tell your tax preparer, and then review your New York State tax return to make sure that you received this credit. Unlike other credits, this does not mirror any federal credits.

For your convenience, New York State will compute the credit for you.

Real Property Tax Credit (Form IT-214) Requirements:

  • Your household gross income can be no more than $18,000,
  • You are a full year NYS resident,
  • You lived at the same address for at least six months,
  • You cannot be claimed as a dependent,
  • Your property value is no more than $85,000, or your monthly rent is no more than $450

If you qualify, your refundable credit can be up to $375.

Long-term Care Insurance Credit (Form IT-249) Requirements:

  • You pay for long-term care insurance.

Even if you can’t take advantage of this on the federal tax return, New York State allows a credit of 20 percent of the premium. Unfortunately, it is not refundable.

Nursing Home Assessment Credit (Form IT-258) Requirements:

  • You (not the person in the nursing home) paid the nursing home assessment,

This credit is six percent of the assessment that you directly paid during the year. This should be on the nursing home bill. Don’t miss it. Many tax preparers are not familiar with this one.

Volunteer Firefighters’ And Ambulance Workers’ Credit (Form IT-245) Requirements:

  • You were an active volunteer firefighter or volunteer ambulance workers for the year,
  • You were a resident of NYS for the entire year,
  • You did not receive a real property exemption for your services.

If you qualify, your refundable credit is $200 (and $200 for your qualifying spouse).

Tuition And Fees Deduction

When preparing the federal return, generally the American Opportunity Credit (AOC) is the better choice than the Lifetime learning credit. However, if you don’t qualify for the AOC, you need to determine if the Lifetime learning credit or the tuition and fees deduction is best. Many times, the federal savings will be better if you use the Lifetime learning credit, but if you use the “tuition and fees deduction,” you may save more between the federal and state. This is because the “tuition and fees deduction” is allowed on the New York State return, but the Lifetime learning credit is not. Take a few minutes to compute your tax both ways. It can mean several hundred dollars in savings.

New York City Credits

If you are a resident in any of the five boroughs of New York City, you are eligible for the NYC credits, which mirror those of New York State. These “me-too” credits are:

  • NYC Child And Dependent Care: For those with federal AGI of $30,000 or less. The credit can go as high as 75 percent of the state credit. (Form IT-216)
  • NYC EIC: This is in addition to the state EIC and can be worth as much as five percent of the federal EIC. (Form IT-215)
  • NYC Household Credit: Aimed at low-income residents, this credit is for those with a federal AGI of $12,500 ($22,500 for married/filing jointly). (IT-201, line 48.)

The School Tax Credit (Form IT-210): Even if you don’t have to file a tax return, you are entitled to the refundable School Tax Credit of $63 (single) or $125 (married) if you are a resident and not claimed on someone else’s return.

Beer Production Credit (I just had to throw this one in): If you are a registered distributor producing fewer than 60 million gallons in NYS, you are entitled to this credit.

Personally, I think this credit should be a “Beer Consumption Credit.” (Let’s get this party started!)

There are many more New York State and New York City credits, so be sure to review them all on the NYS website before submitting your return. Remember, it’s your money.

Have a good week.

IRS Sign: “Drive carefully. We need every taxpayer we can get.”

Joseph Reisman, of Joseph S. Reisman & Associates, has been serving tax prep and business accounting expertise from his Coney Island Avenue office for more than 25 years. Check out the firm’s website.

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Joseph S. Reisman