NY A02422

Allows taxpayers receiving more than 50 percent of income in cash to follow alternative income documentation standards when claiming the earned income tax credit under section 606 of the tax law.

Establishes acceptable income verification methods including permanent books/accounts (bank statements, electronic ledgers, bound handwritten ledgers), employer letters, financial institution statements, work-related receipts, professional fees receipts, sworn affidavits, and income worksheets completed with a certified tax professional.

Requires handwritten ledgers to be maintained in chronological order with transaction amounts, dates, task descriptions, and work-related expenses, and retained for at least three years after the relevant tax year.

Prohibits the Department of Taxation and Finance from denying records as inadequate based solely on omissions, format, or mid-year recordkeeping changes, and requires the department to presume accuracy unless it has affirmative contradictory evidence.

Mandates the commissioner submit annual reports by June 30 detailing cash earners claiming the credit, including numbers sent audit letters, audit outcomes, and credit allowances or denials.