Extends eligibility for the farm employer overtime tax credit to certain professional employer organizations that are in a contractual relationship with an eligible farm employer.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A4565
SPONSOR: Lupardo TITLE OF BILL:
An act to amend the tax law, in relation to eligibility for the farm
employer overtime tax credit
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to clarify the eligibility require-
ment for the farmworker overtime tax credit.
SUMMARY OF PROVISIONS:
Section 1: Amends the tax law to clarify eligibility for the farm
employer overtime credit to include farm employers who choose to
dispense wages through a professional employer organization.
Section 2: Clarifies eligibility for the overtime tax credit by amending
the definition of farm laborer.
JUSTIFICATION:
A strong agricultural industry is vital for New York. To help farmers
cover overtime expenses for farm workers, the farmworker overtime credit
was created to help manage additional expenses.
While this credit is greatly needed, the language of the law inadvert-
ently prohibits certain farms from being eligible. A farmer with multi-
ple operations, may establish a payroll or management entity to handle
payroll and other administrative functions for their operations under
one roof. These payroll entities contract with farm entities to adminis-
ter payroll and pay workers. Since the payroll entity is paying the
workers, instead of the farm operation, these farms are not eligible for
the farm employer overtime credit. This is due to the -way the law was
initially drafted and passed. This bill will allow farms who use a
management or payroll entity, to receive the credit under their business
structure, as was the intention of the original law.
In the Governor's veto message, she instructed the Departments of Taxa-
tion and Finance and Agriculture and Markets to work with the Legisla-
ture during next year's budget negotiations to develop an appropriate
overtime tax credit structure. Unfortunately, the Executive Budget
proposal did not include a provision to rectify this portion of the
overtime tax credit.
PRIOR LEGISLATIVE HISTORY:
Formerly A-9824 of 2023-24, Veto No. 136
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This legislation will have no fiscal implications as it was always
intended that all farms would be eligible to participate in the farm-
worker overtime tax credit program.
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become law.
STATE OF NEW YORK
________________________________________________________________________
4565
2025-2026 Regular Sessions
IN ASSEMBLY
February 4, 2025
___________
Introduced by M. of A. LUPARDO, JONES, BUTTENSCHON, SANTABARBARA, LUNS-
FORD, STIRPE, KELLES, HUNTER, STECK, MAGNARELLI, BRONSON, WOERNER,
TAPIA -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to eligibility for the farm
employer overtime tax credit
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (a) of section 42-a of the tax law, as added by
2 section 2 of subpart C of part B of chapter 59 of the laws of 2022, is
3 amended to read as follows:
4 (a) Notwithstanding subdivision (f) of section forty-two of this arti-
5 cle, a taxpayer that is a farm employer [or], an owner of a farm employ-
6 er, or a professional employer organization as defined in section nine
7 hundred sixteen of the labor law that is in a contractual relationship
8 with an eligible farm employer shall be eligible for a credit against
9 the tax imposed under article nine-A or twenty-two of this chapter,
10 pursuant to the provisions referenced in subdivision (i) of this
11 section.
12 § 2. Subdivision (d) of section 42-a of the tax law, as added by
13 section 2 of subpart C of part B of chapter 59 of the laws of 2022, is
14 amended to read as follows:
15 (d) An eligible farm employee is an individual who meets the defi-
16 nition of a "farm laborer" under section two of the labor law who is
17 employed by a farm employer or a professional employer organization as
18 defined in section nine hundred sixteen of the labor law that is in a
19 contractual relationship with an eligible farm employer in New York
20 state, but excluding general executive officers of the farm employer.
21 § 3. This act shall take effect on the ninetieth day after it shall
22 have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08498-01-5
