Provides for a personal income tax deduction for student loan payments not in excess of five thousand dollars; excludes any payment not in excess of five thousand dollars made by an employer, employee, or on behalf of an employee that is directly deducted from the employee's wages through payroll and administered by a third-party platform that facilitates direct payments to educational institutions or related loan servicers on behalf of students such amount from an employee's New York state gross income; further excludes any contribution not to exceed five thousand dollars to a tuition program under section 529 of the Internal Revenue Code made through payroll deduction and facilitated by an employer or a third-party platform that facilitates direct payments to such programs on behalf of employees from the employee's New York state gross income.
STATE OF NEW YORK
________________________________________________________________________
1245--A
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. SIMON, R. CARROLL, MAGNARELLI, SANTABARBARA,
DINOWITZ, TANNOUSIS, McMAHON, LEMONDES, STERN, GANDOLFO, ANGELINO,
SEPTIMO, JACKSON, CRUZ, MAMDANI, HUNTER, DURSO, LUPARDO, DAVILA,
SIMONE, SEAWRIGHT, DeSTEFANO, SHIMSKY, COLTON, JACOBSON, MIKULIN,
FORREST, CLARK -- read once and referred to the Committee on Ways and
Means -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the tax law, in relation to authorizing a personal
income tax deduction for student loan payments
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subsection (c) of section 612 of the tax law is amended by
2 adding a new paragraph 48 to read as follows:
3 (48) Payment not in excess of five thousand dollars actually paid by
4 an eligible borrower for student loan repayment, to the extent not
5 deductible in determining federal adjusted gross income and not reim-
6 bursed. For the purposes of this paragraph, the following terms have
7 the following meanings:
8 (i) "Student loans" means any indebtedness incurred by the taxpayer
9 solely for any qualified education loan to the extent provided in
10 section 221 of the Internal Revenue Code.
11 (ii) "Eligible borrower" shall mean a taxpayer who has incurred
12 indebtedness on student loans as defined in subparagraph (i) of this
13 paragraph on behalf of the taxpayer, the taxpayer's spouse, or any
14 dependent of the taxpayer as of the time the indebtedness was incurred.
15 (iii) Any payment made by an employer, employee, or on behalf of an
16 employee pursuant to this section that is directly deducted from the
17 employee's wages through payroll and administered by a third-party plat-
18 form that facilitates direct payments to educational institutions or
19 related loan servicers on behalf of students shall be excluded from the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD00109-03-5
A. 1245--A 2
1 employee's New York state gross income, provided that such payments do
2 not exceed five thousand dollars in any taxable year.
3 (iv) Any contribution to a tuition program under section 529 of the
4 Internal Revenue Code made through payroll deduction and facilitated by
5 an employer or a third-party platform that facilitates direct payments
6 to such programs on behalf of employees shall be excluded from the
7 employee's New York state gross income, provided such contributions do
8 not exceed five thousand dollars in any taxable year.
9 § 2. This act shall take effect immediately and shall apply to taxable
10 years beginning on or after January 1, 2026.
