What's happening
This bill doubles the state tax deduction limits for contributions to New York family tuition (529) accounts.
Why it matters
Expanding tax incentives for 529 contributions could encourage more families to save for higher education. , potentially reducing reliance on student loans and making college more attainable in the long term.
Higher deduction limits disproportionately benefit families with more disposable income. , since those able to save more will realize greater tax savings, potentially widening opportunities for middle- and upper-income households.
The change aligns state tax benefits with rising education costs. , recognizing that previous limits have not kept pace with tuition inflation and the actual financial needs of college-bound families.
Immediate applicability means families can take advantage of larger deductions right away. , possibly prompting a surge in contributions and increased participation in New York's college savings program.
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Who cares
Headline styles
Raise Tax-Free Tuition Savings
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to investigations and government operations
- 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.
Raise Tuition Account Tax Limits
In Assembly Committee · Ways And Means · Sponsor Steven Englebright
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
396
2017-2018 Regular Sessions
IN SENATE (Prefiled)
January 4, 2017
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations
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 Assembly, do enact as follows:
Section 1. Paragraph 32 of subsection (c) of section 612 of the tax law, as amended by chapter 81 of the laws of 2008, is amended to read as follows:
(32) Contributions made during the taxable year by an account owner to one or more family tuition accounts established under the New York state college choice tuition savings program provided for under article fourteen-A of the education law, to the extent not deductible or eligible for credit for federal income tax purposes, provided, however, the exclusion provided for in this paragraph shall not exceed [five] ten thousand dollars for an individual or head of household, and for married couples who file joint tax returns, shall not exceed [ten] twenty thousand dollars; provided, further, that such exclusion shall be available only to the account owner and not to any other person.
§ 2. 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.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01792-01-7
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 contributions to family tuition accounts
Purpose
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 contributions 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 1990s 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 educational 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 contributions to these accounts has 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.
Legislative history
2015-16: S1225/A6580 - Investigations & Government Operations/Ways & Means 2014: S7197/A9665 - Investigations & Government Operations/Ways & Means
Fiscal implications
This legislation would double the amount that filers can deduct from their income taxes for contributions to family tuition accounts. Currently, this tax expenditure 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.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.