Breaking: Payment of BCP, solar, low-income housing and other tax credits may be delayed


Governor Andrew Cuomo unveiled the details this week of a $168 billion proposed budget for FY 2019. In light of a potential budget deficit that could approach $4 billion, certain tax law changes are proposed. In recent years the proposed budget has been acted on by the Legislature and Governor before April 1st.

Among the proposed measures are tax credit deferrals similar to those enacted in 2010. These deferrals would be effective immediately and would affect a number of tax credit programs, including those under the Brownfield Cleanup Program, low income housing credit, green building credit, alternative fuels and electric vehicle recharging property credit, conservation easement tax credit, solar energy system equipment credit, clean heating fuel credit, economic transformation and facility redevelopment credit, and real property tax credit for manufacturers.

For tax years beginning January 1, 2018, recovery of amounts in excess of $2 million would be deferred until at least 2021. Fifty percent of the deferred amount would be paid out in 2021, 75% of the balance in the second year, and the remaining balance would be paid in the third year. This schedule does not appear to account for existing delays in the payment of tax credits due to the Department of Taxation and Finance’s audits of taxpayer returns.

Persons expecting to file for tax credits under any of the covered programs should be aware of this proposal, account for its potential passage in their economic projections and consult their tax and legal advisors accordingly.