The The Associated Press

ALBANY - It will be less taxing to be married with children in 2007.

New York's tax law is changing Jan. 1 to eliminate the “marriage penalty” by increasing the standard deduction for married couples compared to the exemption provided to two single taxpayers.

The move, which has been phased in over several years, is expected to save taxpayers $41 million in 2007 by raising the standard deduction for married couples filing jointly to $15,000, up from the $14,600 they were allowed on their 2006 filing. The change will eliminate disparities between married and single people, tax department officials said.

Most taxpayers with children at home will also start to benefit from the Empire State Child Tax Credit, worth about $300 for a taxpayer and saving parents $600 million statewide. The requirements to get the credit reflect its stormy trip through the state Legislature.

Gov. George Pataki had proposed a $500 education tax credit for moderate- and low-income families in poorly performing public school districts. It could have been used for tutoring, SAT test preparation, or tuition for religious and other private schools.

It would have cost the state $400 million annually and was backed by Catholic, Jewish and Lutheran educators and parents.

But that proposal didn't sit well with the Legislature, especially the Democrat-controlled Assembly. Public school advocates and teachers unions objected that the measure could encourage transfers to private and religious schools at a time when public schools need more funding.

Months later, it was passed into law as a $330 “child tax credit” for taxpayers with children 4 to 17 years old. There is no mention of education and it will cost the state $200 million more in revenue.

“It's going to be helpful to parents, but we don't think it's the best policy that could have been implemented,” said Dennis Poust, spokesman for the New York Catholic Conference. “We don't need people buying Nintendo Wiis when they should be paying for their kids' education.”

The state's minimum wage will rise to $7.15 an hour from $6.75.

For those whose wages are complemented by tips, the minimum wage will be $4.60 an hour, up from $4.35. It's the last bump in a 2004 law that phased in the increase over three years.

Americans may also see more of New York beginning Jan. 1. That's when a $7 million tax credit “pool” starts to encourage production companies to do radio and television commercials in New York City and throughout the state.

Also kicking in on Jan. 1 will be Timothy's Law, which will require insurers to provide more mental health coverage. Although most health insurance companies already provide the care to varying degrees, the law requires offering it to workers even in small businesses.

The bill requires insurance companies to cover 30 inpatient and 20 outpatient days of treatment for mental illness. Companies must fully cover “biologically based mental illnesses” including major depression, obsessive compulsive disorder, anorexia and binge eating.

Timothy's Law also requires coverage for children with attention deficit disorder, disruptive behavior disorders or disorders that include suicidal symptoms.

The state would pay the premium increase for companies with 50 or fewer employees.

The measure is expected to increase premiums about 3 percent and no more than 10 percent, while providing a much wider array of mental health services.

Because of delays in passing the bill in both houses, the law was signed by Pataki just two weeks ago. So the insurance industry may need more time to adjust to the new mandate, stalling its implementation for a few months, Pataki said at the bill signing.