Have you filed your New York personal income taxes for 2010?  If so, you’ve just been reminded once again of how complex and confusing our state tax code has become.

I described the problem in this article a few years ago:

[Since 1995], the IT-201 (New York’s long form) has swelled to four pages – twice as many as the federal 1040 form. This doesn’t include the extra paperwork needed to claim any of New York’s 34 separate income-tax credits, which have spread like weeds over the last dozen years.

Though computer software like Turbo Tax has eased tax preparation for many, New York’s dizzying array of tax exclusions and options still poses more than its share of brain-teasers for filers who want to make sure they are taking advantage of every break available to them. Most of us can safely assume we’re not eligible for items like the Biofuel Production Credit, the Fuel Cell Electrical Generating Credit, the Brownfield Redevelopment Credit, the Security Officer Training Tax Credit, the Historic Barn Credit or the Employment Incentive Credit (which is not to be confused with the Employment Incentive Credit for the Financial Services Industry).

But what is one to make of the Accumulation Distribution Credit? If you have a furnace in your basement, might you qualify for the Home Heating System Credit or the Residential Fuel Oil Storage Credit?

If you bought a house last year, should you claim the Special Additional Mortgage Reporting Tax Credit? Can parents of young children who qualify for the new Empire State Child Credit also continue to claim the Dependent and Child Care Credit?

The only way to know for sure is to read the fine print – and even then, the answer may be elusive.


New York’s growing tax complexity is not the work of bureaucrats but of politicians … [S]tate legislators have increasingly used the tax code as a vehicle to promote their social-policy goals and to reward taxpayers who engage in approved behaviors. After implementing an historic tax cut, Gov. George Pataki made a few of his own dubious contributions to the lengthening list of state tax credits.

And to make matters worse, middle-income New Yorkers have been subject to growing stealth tax hikes ever since the state’s last broad-based tax cuts were (supposedly) completed in 1997.

Gov. Cuomo and the Legislature should (a) get out the weed-whacker, eliminating New York’s thicket of narrowly targeted tax breaks, (b) “index” the tax code to adjust for inflation, and (c) impose lower rates on a broader taxable income base, all of which will (d) simplify matters for the beleaguered New York tax filer.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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