New York’s Legislature approved the largest single-year tax credit for life insurers, the largest since the program began in 2000.
State Senate President Phil Berger (D-Staten Island) announced the new tax credit at a news conference Thursday, and Assembly Speaker Sheldon Silver (D) said he’s working with the state’s Republican governor, Andrew Cuomo, to develop a bill for approval in the legislature by the end of next week.
The life insurance tax credit will give life insurers an estimated $4.8 billion, with $1 billion in state and local tax credits and $700 million in federal grants.
That means New York will have the nation’s largest life insurance credit for the next 20 years, the nonpartisan Tax Policy Center says.
The credit has been available to insurers since 1999, when it was authorized under the state tax credit package for business and industry, and was extended in 2003.
The credits for life and health insurance have been among the most controversial aspects of the Affordable Care Act, which was signed into law in 2010 by President Barack Obama.
Critics say the tax credit helps the insurance industry while benefiting the very people who are the biggest beneficiaries of the health care law.
Supporters say it helps small business, small businesses and individuals by making it easier for them to afford health care coverage.
The Senate vote to approve the tax credits came after Democrats in the Assembly approved the package in December.
Republicans have the support of three-quarters of the Assembly’s chamber, but they need the support to pass the legislation, which is now headed to Cuomo’s desk for his signature.
The governor will be able to sign the legislation into law by Friday.
Cuomo is expected to sign it without any changes, Berger said.
The $4-billion tax credit has generated an estimated 690,000 new jobs in New York over the past 10 years, according to the New York Chamber of Commerce.
The tax credit was designed to help small businesses pay their health insurance premiums and cover expenses like taxes.