Relates to a tuition tax credit; increases the amount of an allowable deduction (Part A); reduces income by the amount of interest paid for student loans (Part B).
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5125
SPONSOR: Barclay (MS) TITLE OF BILL:
An act to amend the tax law, in relation to a tuition tax credit and
increasing the amount of an allowable deduction (Part A); and to amend
the tax law, in relation to reducing income by the amount of interest
paid for student loans (Part B)
PURPOSE OR GENERAL IDEA OF BILL:
This bill enacts "Retain-NY".
SUMMARY OF PROVISIONS:
Part A This part amends the Tax Law to index the tuition tax credit and
deduction to two percent or the Higher Education Price Index (HEFT),
whichever is greater.
Part B This part amends the Tax Law by adding a new paragraph. Starting
in 2021, taxpayers will have all interest paid on student loans, to the
extent not deductible in determining federal adjusted gross income and
not reimbursed, subtracted from federal adjusted gross income, for state
income tax purposes. "Student loans" are defined means any indebtedness
incurred by the taxpayer solely for any qualified education loan. "Lend-
ers" are defined as a bank, savings and loan association, credit union,
pension fund, insurance company, school, or state lending agency.
JUSTIFICATION:
In order to ease the burden of soaring higher education costs, this bill
would provide Personal Income Tax relief to college educated residents
of New York and encourage them to remain in the State. Many students and
families face great difficulty in paying for college. This legislation
will help provide immediate relief by increasing the tuition tax credit
and increasing the deduction. In addition, this bill would also help
students who are repaying their college loans by allowing them to deduct
all interest paid on the student loan.
Lastly, expansion of this tax credit and these deductions will help to
both stop the so called "brain drain" of bright young New Yorkers and to
ensure that New York State businesses will continue to have access to a
large pool of intelligent and well educated workers.
PRIOR LEGISLATIVE HISTORY:
A5881 (2021-22) Held in Ways & Means
A3478 (2019-2020) Held in Ways & Means
A4460 (2017-2018) Held in Ways & Means
A5196 (2015-2016) Referred to Ways & Means
A4891 (2013-2014) Held in Ways & Means
A10354 (2012) Referred to Ways & Means
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined
EFFECTIVE DATE:
This act shall take effect immediately, provided, however, that the
applicable effective date of Parts A through B of this act shall be as
specifically set forth in the last section of such Parts.
