What's happening
This bill allows New York taxpayers to deduct up to $2,500 in student loan interest for higher education expenses from state taxes.
Why it matters
Directly reduces state tax burden for individuals repaying student loans, potentially making higher education more affordable and easing financial stress for recent graduates and their families.
Aligns state tax code with federal provisions (IRS §221), making tax filing simpler and more consistent for those already claiming the federal student loan interest deduction.
May incentivize more New Yorkers to pursue higher education by lowering the long-term cost of borrowing, which could have broader economic and workforce benefits for the state.
Targets relief specifically at those actively repaying education debt, rather than all borrowers, focusing benefits on individuals currently facing repayment challenges.
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Who cares
Headline styles
Cap Student Loan Interest Deduction
Plain English, a few words. Used as the page title.
Sponsors
20 Co-sponsors
History
- Print number 2556a
- Amend and recommit to investigations and government operations
- Referred to investigations and government operations
- Reported and committed to finance
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Cap Student Loan Interest Deduction
In Assembly Committee · Ways And Means · Sponsor Addie Jenne
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2556--A
2017-2018 Regular Sessions
IN SENATE
January 13, 2017
Introduced by Sens. LAVALLE, AMEDORE, AVELLA, BONACIC, CROCI, GALLIVAN, GOLDEN, HAMILTON, LANZA, MARCHIONE, MURPHY, O'MARA, ORTT, RANZENHOFER, RITCHIE, SERINO, SEWARD, TEDISCO, VALESKY -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the tax law, in relation to interest on indebtedness incurred by taxpayer to pay for higher education
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subsection (c) of section 612 of the tax law is amended by adding a new paragraph 44 to read as follows:
(44) Interest on indebtedness incurred by the taxpayer solely to pay qualified higher education expenses to the extent such interest is deductible, in accordance with Title 26 U.S.C. § 221, for federal tax purposes, but not to exceed two thousand five hundred dollars.
§ 2. This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2019.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02536-02-8
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to interest on indebtedness incurred by taxpayer to pay for higher education
Purpose
To allow individuals to reduce their adjusted gross income by the amount of their student loan interest not exceeding $2,500.
Summary of provisions
Section 1 amends subsection (c) of section 612 of the tax law by adding a new paragraph 42 to provide that interest on student loan debt will be deductible up to $2,500 from an individual's adjusted gross income.
Section 2 sets for the effective date.
Justification
This bill would allow individuals to reduce their adjusted gross income for their state tax returns by the amount of their student loan inter- est, not to exceed $2,500. Many students face crushing loan debt. This would be one step toward helping these students transition into the workforce and be productive members of society with the ability to have spending power.
The federal government already provides for this measure on federal tax returns and allowing this on the state level will reduce the tax burden on citizens of New York State.
Legislative history
2016 S.7575
Fiscal implications
$40 million.
Effective date
This act shall take effect immediately and shall apply to the taxable years beginning on and after January 1, 2019.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.