STATE OF NEW YORK
________________________________________________________________________
59
2017-2018 Regular Sessions
IN ASSEMBLY(Prefiled)
January 4, 2017
___________
Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to lump sum distributions used
for the payment of post-secondary education loans
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 603 of the tax law is amended by adding a new
2 subsection (c) to read as follows:
3 (c) Exemption. Lump sum distributions, as taxed under this section,
4 used for payments to an institution receiving any scheduled periodic
5 payments from a borrower pursuant to the terms of any post-secondary
6 education loan, and making the payments of principal and interest and
7 other amounts with respect to the amounts received from the borrower as
8 may be required pursuant to the terms of the post-secondary education
9 loan or of the contract governing the servicing; or, during a period
10 when payment on a post-secondary education loan is deferred, maintaining
11 account records for the loan and communicating with the borrower regard-
12 ing the loan, on behalf of the loan's holder shall not be subject to the
13 separate tax imposed in subsection (a) of this section.
14 § 2. Subsection (c) of section 612 of the tax law is amended by adding
15 a new paragraph 3-d to read as follows:
16 (3-d) Pensions and annuities received by an individual of any age, not
17 otherwise excluded pursuant to paragraph three of this subsection, to
18 the extent includible in gross income for federal tax purposes, which
19 arise (i) from an employer-employee relationship or (ii) from contrib-
20 utions to a retirement plan which are deductible for federal income tax
21 purposes which are used for payments to an institution receiving any
22 scheduled periodic payments from a borrower pursuant to the terms of any
23 post-secondary education loan, and making the payments of principal and
24 interest and other amounts with respect to the amounts received from the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06349-01-7
A. 59 2
1 borrower as may be required pursuant to the terms of the post-secondary
2 education loan or of the contract governing the servicing; or, during a
3 period when payment on a post-secondary education loan is deferred,
4 maintaining account records for the loan and communicating with the
5 borrower regarding the loan, on behalf of the loan's holder. However,
6 the term "pensions and annuities" shall also include distributions of
7 any kind, including any lump sum distributions, as defined in subpara-
8 graph (A) of paragraph four of subsection (e) of section four hundred
9 two of the internal revenue code and taxed under section six hundred
10 three of this article, received by an individual of any age from an
11 individual retirement account or an individual retirement annuity, as
12 defined in section four hundred eight of the internal revenue code, and
13 distributions received by an individual of any age from self-employed
14 individual and owner-employee retirement plans which qualify under
15 section four hundred one of the internal revenue code, whether or not
16 the payments are periodic in nature.
17 § 3. This act shall take effect immediately and shall apply to taxable
18 years commencing on or after January 1, 2016.