I will soon introduce legislation to help mitigate the harm that the new federal tax laws will cause for many New Yorkers, particularly residents of Westchester.
The provision to cap the amount of the state and local tax deduction at $10,000 disproportionately affects New York. Many residents in areas of the state with high property taxes, like Westchester– which has the highest property taxes in the nation, will now face an increase in federal and possibly state income taxes on top of those steep property tax bills. According to ATTOM data solutions, 73 percent of Westchester homeowners pay more than $10,000 in property taxes.
At the suggestion of a constituent, I will be introducing legislation that would allow New York residents to itemize their New York State tax return even if they do not itemize their federal returns. The categories of itemized deductions used at the federal level are also used for the New York State personal income tax.
The new federal tax bill is an assault on New York and my constituents. We must take action to change the tax law in New York to make sure that we do not also see an increase in our state taxes as a result of this disastrous federal law. Allowing people to keep itemized deductions on our state returns regardless of how we fill out our federal returns, is one step we can take to prevent this.
I have already heard from constituents who are considering moving out of New York unless something is done to help mitigate the harm the federal bill will cause them. Without these changes, many people simply cannot afford to stay.
Currently, New York State tax law only allows taxpayers to itemize their state returns if they have itemized their federal returns. Nearly 30 percent of New Yorkers who currently itemize their deductions claim the real estate deduction. The $10,000 cap on the deduction for state and local taxes will mean that far fewer New Yorkers will itemize their federal returns and instead opt to take the standard deduction.
According to a July 2017 report from The Office of the State Comptroller, without legislation to change the State tax law, eliminating deductions at the federal level would eliminate them at the state level and potentially increase taxpayers’ state income-tax burden. This legislation would ensure that taxpayers will still be able to itemize on their New York return, preventing them from facing a higher New York tax bill.