SCHUMER ANNOUNCES MAJOR NEW YORK TAX BENEFIT PRIORITIES INCLUDED IN JUST-PASSED EXTENDERS PACKAGE – MASS TRANSIT BENEFIT, TEACHER’S TAX BREAK & NEW MARKETS TAX CREDIT ALL EXTENDED FOR ONE YEAR
Schumer Highlighted that A Variety of Critical Tax Benefits Had Expired on January 1, 2014, And NYers Have Been Left Without Vital Savings All Year – Senator Fought to Include One Year Extension of These Benefits So That They Can Be Collected Retroactively for 2014
Schumer Also Highlighted That The ABLE Act – Which Will Allow Creation of Tax Advantaged Savings Accounts for Children With Disabilities – Was PassedInto Law With This Package; Entire Bill of Almost 50 Tax Benefits Will Go to President’s Desk This Week for Signature
Schumer: These Critical Tax Breaks Will Help Stretch Every Dollar Earned By New Yorkers
Today, U.S. Senator Charles E. Schumer announced that a number of vital tax benefits for New Yorkers were passed by Congress last night in the Tax Increase Prevention Act (HR 5771), also known as the “tax extenders package,” including the mass transit benefit, the teacher’s tax break and more. Schumer also highlighted that one of his major priorities, the ABLE Act, which creates tax advantaged savings accounts for children with disabilities, was included in this passage, which will be officially signed into law by President Obama this week. Schumer explained that this tax extenders legislation extends all of these tax benefits, which expired on January 1, 2014, for the year 2014, and can be collected retroactively in many cases.
“These critical tax breaks for teachers, commuters and others will help stretch every dollar earned by New Yorkers, and that’s why I pushed so hard to make sure they were extended for 2014,” said Senator Schumer. “This bill includes the extension of the mass transit benefit to keep more money in mass transit commuters’ pockets and the extension of the teacher tax break that will make out-of-pocket investments for classroom supplies tax deductible.
Schumer continued, “The just-passed ABLE Act will allow the creation of tax-advantaged savings accounts for children with disabilities, and its passage means that families of children with special needs won’t have to choose between paying for day-to-day expenses and saving for the future. I am pleased that Congress recognized the importance of this legislation and of other key tax benefits for New Yorkers.”
Specifically, Schumer highlighted a number of key tax benefits that now have been extended for 2014:
- Restored Benefits for New York Commuters: Senator Schumer successfully pushed to restore a tax benefit which will give mass transit commuters the same tax break that those who commute by car receive for parking costs as part of the recently passed Tax Increase Prevention Act (HR 5771). Parity for the parking and mass transit benefit expired on January 1st, 2014, lowering the benefit for mass transit users to $130 a month. With Senator Schumer’s successful push, mass transit commuters will be able to receive up to $250 in tax benefits each month for the 2014 tax year. In 2013, 700,000 commuters in the Greater New York Metropolitan Area, and 2.7 million commuters nationwide took advantage of the benefit. This benefit is available to commuters who receive employer offered transportation benefits and ride the bus, take the LIRR, take the subway or use another form of public transportation to commute to work.
- Restored Teacher Tax Break: Senator Schumer successfully pushed to restore a tax benefit which enables thousands of New York teachers to deduct up to $250 per year from their tax bill. This deduction is needed to help offset the $485 on average that New York State teachers spend each year out-of-pocket to provide additional supplies for their students. Teachers receive this small benefit for the money they spend out of their own pocket to purchase books, lesson plans, computer equipment and other supplies to teach children in both private and public schools. The tax benefit went into effect in 2002, but expired on January 1, 2014. With Senator Schumer’s push, it was restored in the Tax Increase Prevention Act.
- ABLE ACT: Schumer successfully passed the ABLE Act which allows individuals with disabilities, or their beneficiaries, to create an ABLE savings account similar to the 529 College Savings Account to save for long term care. These accounts will help thousands of New Yorkers and their families with long-term disabilities, like Down Syndrome, Autism and Fragile-X, better afford the cost of care and save for the future. An ABLE account will allow families who have children with disabilities to save and spend money tax free to cover critical education, medical care, support services, employment training, housing, and transportation services, without losing key government disability services and benefits that they need. Anyone could contribute into an individual’s ABLE account, and the principle would accrue tax-free throughout the lifetime of the individual who is disabled. Because investments grow tax-deferred and distributions for qualified expenses are tax free, these plans reduce the overall tax burden for individuals with disabilities and their families, making care significantly more affordable.
- Restored New Markets Tax Credit: Senator Schumer fought successfully to restore the New Markets Tax Credit (NMTC). The New Markets Tax Credit has been critical for many development projects in Buffalo, including Roswell’s new Clinical Sciences Center – a $42 million project that will add additional chemotherapy treatment chairs, additional breast cancer screening and treatment space, and new cancer research and clinical space. Senator Schumer urged several entities that distribute New Market Credits, including the National Development Council and Wells Fargo Bank, to fund Roswell’s application for $25 million in tax credits, along with other projects to develop the region’s infrastructure. The NMTC program was established in 2000 in order to spur new or increased business investments into projects in eligible urban communities. In exchange for investing in qualifying projects, individual investors and corporations can receive a tax credit on their federal income tax return, creating an incentive for individuals to invest. Between 2003 and 2010, NMTC investments created over 500,000 jobs across the country. This tax benefit expired on January 1, 2014, but with Senator Schumer’s push, was restored in the Tax Increase Prevention Act.
- Restored IRA Charitable Rollover: Senator Schumer authored the IRA Charitable Rollover and has fought successfully for its extension this year. This tax benefit allows individuals who have reached age 70½ to donate up to $100,000 to qualifying charitable organizations directly from their Individual Retirement Account (IRA), without treating the distribution as taxable income. An extension of this provision will eliminate the uncertainty caused by IRA holders over 70 need to make minimal disbursements out of their IRAs every year. This provision is also important New York’s many charities, who depend on donations from IRAs. This tax benefit expired on January 1, 2014, but with Senator Schumer’s push, was restored in the Tax Increase Prevention Act.
- Restored Short Line Rail Tax Benefit: Senator Schumer successfully pushed to restore a tax benefit which enables Short Line Rail roads to receive a tax benefit for repairs and capital improvements. The Short Line Rail tax credit expired on January 1st, 2014, but was restored with Senator Schumer’s push in the recently passed Tax Increase Prevention Act. This credit is critically important for maintaining the safety and efficiency of New York’s short line railroads, which represent over 50% of rail track in New York. The tax credit is valued at fifty percent of the cost of track maintenance and improvements, up to $3,500 per mile. This tax credit offsets $436,000 in costs annually for the Finger Lakes Railway and $300,000 annually for the Saratoga and North Creek Railway. The New York Susquehanna and Western Railway (NYSW) has saved over $7.5 Million over the course of the tax credit.