Kirsten Gillibrand United States Senator for New York

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As NYers Prepare Their Taxes, Gillibrand Outlines How To Take Full Advantage Of Middle Class Tax Cuts She Helped Create

Broad Range of Tax Cuts Available for New Yorkers to Save on Property Taxes, New Home and Car Purchases, College Tuition

February 23, 2010

Washington, D.C. – As New Yorkers get ready to file their tax returns for 2009, U.S. Senator Kirsten Gillibrand is urging New York taxpayers to take full advantage of tax cuts she worked hard to secure. In addition to creating a broad range of tax relief for New Yorkers through the Property Tax Deduction and Child, Tuition and First Time Home-Buyer tax credits, Senator Gillibrand cut taxes for approximately 6.3 million middle class New York families – 93 percent of New Yorkers – through the “Making Work Pay Tax Credit.”

“New Yorkers pay some of the highest taxes in the nation,” Senator Gillibrand said. “After nearly a decade of tax giveaways to big corporations and the wealthiest Americans at the expense of small businesses and everyday New Yorkers, middle class families deserve a break of our own. From easing the burden of property taxes to helping families afford child care, purchase a new home, or send our children to college, I fought hard over the last year to help make life more affordable for New York’s hardworking middle class families.”

According to the Bureau of Labor Statistics Consumer Price Index, over the last 10 years, gas prices on average have more than doubled. Food prices increased an average of 50 percent. College tuition at a four-year public institution rose by over 60 percent, according to the College Board. And health care premiums have doubled, according to the Kaiser Family Foundation.

To help middle class families keep more of what they earn, the American Recovery and Reinvestment Act that Senator Gillibrand helped pass last year included the “Making Work Pay Tax Credit.” 

Approximately 6.3 million New York families are eligible for the tax credit, cutting taxes for approximately 93 percent of New Yorkers.

READ Senator Gillibrand's county-by-county report on New Yorkers eligible for the Making Work Pay Tax Credit.

  • In New York City, approximately 2.7 million are eligible for the Making Work Pay tax cut – cutting taxes for approximately 89 percent of New York City residents.
  • In Western New York, approximately 560,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 97 percent of Western New York residents.
  • In the Rochester/Finger Lakes Region, approximately 450,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 95 percent of Rochester/Finger Lakes region residents.
  • In Central New York, approximately 425,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 96 percent of Central New York residents.
  • In the Southern Tier, approximately 210,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 96 percent of Southern Tier residents.
  • In the Capital Region, approximately 420,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 94 percent of Capital Region residents.
  • In the North Country, approximately 185,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 97 percent of North Country residents.
  • In the Hudson Valley, approximately 645,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 85 percent of Hudson Valley residents.
  • On Long Island, approximately 390,000 are eligible for the Making Work Pay tax cut – cutting taxes for approximately 78 percent of Long Island residents.

To create more opportunities for middle class families and help them save more across the board, Senator Gillibrand fought hard last year to make the following tax deductions and resources available for 2009 tax returns:

Keeping More of What We Earn


Making Work Pay Tax Credit
The Recovery Act included the $400 Making Work Pay Tax Credit for working individuals. The tax credit was automatically included for most workers to ensure middle class workers receive this tax cut immediately. However, workers who did not receive a deduction in their withholding or who may have lost their job before they received the full value of the credit should be sure to claim it on their returns.

Earned Income Tax Credit
The Recovery Act also included the Earned Income Tax Credit – a refundable tax credit to help lower-income taxpayers. The credit begins to phase out at $21,420 for married taxpayers filing a joint return with children and completely phases out at $40,463 for one child, $45,295 for two children and $48,279 for three or more children.  The Recovery Act expanded the maximum benefit for families with more than three children to $5,657.

Unemployment Benefits
In addition to helping workers keep more of their paychecks, the Recovery Act is also helping New Yorkers who have lost their jobs keep more of what they collect in unemployment benefits. Individuals receiving temporary unemployment benefits receive the first $2,400 tax-free.  Most beneficiaries should have received this benefit in a reduction in their withholding, but those who did not should be sure to deduct it in their taxes.

Making Life Affordable for Middle Class Families


First Time Homebuyer Tax Credit
Senator Gillibrand helped pass the First Time Homebuyer Tax Credit as part of the Recovery Act, and passed legislation in October to extend it into 2010 and expand it for more buyers. Individuals who bought a home and have not lived in a residence they owned for the past three years are eligible for this $8,000 credit, which will also be available this year through the end of April. Existing homeowners are now eligible for a tax credit of $6,500.

The First Time Homebuyer Tax Credit has been a driving force to shore up the housing market and spur new buyers. In fact, home sales jumped 5 percent in 2009, with the First Time Homebuyer Tax Credit fueling sales. New home sales continued rising last month by 3.8 percent, according to estimates from U.S. Commerce Department economists.

Property Tax Deduction
Senator Gillibrand introduced bipartisan legislation last year that expanded and made permanent federal property tax relief for New Yorkers who do not itemize their federal tax deductions. The enhanced deduction would offer new tax relief for up to 30 million homeowners across the country.

Before 2008, only taxpayers who itemized their deductions could claim a deduction for state and local property taxes. The Housing and Economic Recovery Act that Congress passed in 2008 temporarily allowed non-itemizing taxpayers to deduct their property taxes. However, this deduction was capped at only $500 and expired at the end of 2009. Senator Gillibrand’s legislation would lift the caps and makes the property tax relief permanent.

New Car Purchases
Anyone who purchased a new car in 2009, including through the Cash for Clunkers program, is eligible to deduct the state and local sales tax on their purchase.  To claim the credit, families must earn less than $260,000 and $135,000 for joint filers.

Child Tax Credit
Working families have been especially hard hit by the recession – for example, the cost of child care is rising $730 each year. To ease the burden on working parents, the Recovery Act expanded the Child Tax credit, which offers a tax cut of up to $1,000 for each child for many New York families by making it fully refundable and increasing the amount of income that families can count toward the credit.

American College Opportunity Tax Credit
The high cost of college tuition has put the dream of higher education out of reach for too many of New York’s brightest, hardest working students. To make college affordable for every student, the Recovery Act created the American College Opportunity Tax Credit, allowing families to claim a credit for the cost of a student’s college tuition and required course materials.

The credit is capped at $2,500 per student for four years.  The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples filing a joint return. The credit is phased out for taxpayers with incomes above these levels.

Free Federal Tax Filing Help


Tax Assistance Centers In Every Corner of New York
New York taxpayers can get free assistance on their federal taxes at IRS assistance centers across the state.

Additionally, every taxpayer making less than $57,000 can use the IRS Free File program available on the IRS Web site. Users get the step-by-step help they need to prepare, complete and file federal tax returns online – at no cost.

The program is made possible through a partnership between the IRS and the Free File Alliance, a group of industry-leading tax software providers. Since 2003, the Free File program has delivered free tax services to more than 25 million people.

Not only is the program completely free and secure, but taxpayers who use Free File with direct deposit may receive refunds in as little 10 days.