NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6272
SPONSOR: Englebright TITLE OF BILL: An act to amend the tax law, in relation to contrib-
utions to family tuition accounts
PURPOSE OR GENERAL IDEA OF BILL:
To increase the amount that a family can deduct from their income taxes
for contributions to the college choice tuition savings accounts.
SUMMARY OF PROVISIONS:
Section 1. Amends paragraph 32 of subsection (c) of section 612 of the
tax law to double the exclusion a single payer can claim for contrib-
utions to a family tuition account from five to ten thousand dollars for
a single filer, and from ten to twenty thousand dollars for married
filers filing jointly.
Section 2. Effective date.
JUSTIFICATION:
In the late 90's New York created the New York State College Choice
Tuition Savings Program, also known as the 529 College Savings Program.
Families can set up 529 accounts for their children and contributions
into these accounts can be later used to pay for any qualifying educa-
tional expenses, be it tuition, fees, textbooks, and certain room and
board costs. New York's 529 College Savings Program has proven quite
popular. According to market reports New York's College Savings Program
is the second largest in the country, with over 764,000 account open
totaling over $14.23 billion in funds invested in the program.
The amounts that individuals can deduct from their taxes for contrib-
utions to these accounts have not changed since the early 2000s. As the
College Board report shows, the increase in the costs of tuition plus
additional expenses has been significant. The average total costs at
four-year private nonprofit institutions have increased by 25% from the
2002-03 academic year to the 2012-13 academic year and at public four-
year institutions the increase has been an incredible 45% in the same
time. The amount individuals can contribute to these accounts tax free
needs to keep up with the massive inflation in college costs that we
have seen in the last decade.
PRIOR LEGISLATIVE HISTORY:
2013-14 A9665 referred to ways and means
2015-16 A6580 referred to ways and means
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
This legislation would double the amount that filers can deduct from
their income taxes for contributions to family tuition accounts.
Currently, this tax expenditures is% estimated to cost the state $55
million. It is estimated that enactment of this legislation would result
in an additional cost to the state of $20 million.
EFFECTIVE DATE:
This act shall take effect immediately, and shall apply to the taxable
year in which it takes effect and taxable years commencing on or after
such date.
STATE OF NEW YORK
________________________________________________________________________
6272
2017-2018 Regular Sessions
IN ASSEMBLY
March 1, 2017
___________
Introduced by M. of A. ENGLEBRIGHT -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the tax law, in relation to contributions to family
tuition accounts
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph 32 of subsection (c) of section 612 of the tax
2 law, as amended by chapter 81 of the laws of 2008, is amended to read as
3 follows:
4 (32) Contributions made during the taxable year by an account owner to
5 one or more family tuition accounts established under the New York state
6 college choice tuition savings program provided for under article four-
7 teen-A of the education law, to the extent not deductible or eligible
8 for credit for federal income tax purposes, provided, however, the
9 exclusion provided for in this paragraph shall not exceed [five] ten
10 thousand dollars for an individual or head of household, and for married
11 couples who file joint tax returns, shall not exceed [ten] twenty thou-
12 sand dollars; provided, further, that such exclusion shall be available
13 only to the account owner and not to any other person.
14 § 2. This act shall take effect immediately, and shall apply to the
15 taxable year in which it takes effect and taxable years commencing on or
16 after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01792-01-7
