What's happening
This bill allows New York taxpayers to deduct up to $5,000 in student loan payments from state income taxes.
Why it matters
Could reduce the financial burden of student loans. By allowing a deduction of up to $5,000 in payments, this bill offers direct tax relief to borrowers, potentially making it easier for individuals and families to manage their loan obligations.
Applies broadly to loans for self, spouse, or dependents. The deduction is available whether the taxpayer borrowed for their own education, their spouse’s, or a dependent’s, making the benefit more widely accessible to New York families.
Targets out-of-pocket payments not already deducted federally. Only payments not already deducted on federal taxes and not reimbursed by other sources are eligible, ensuring the deduction helps those who haven’t already received tax benefits for these payments.
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Who cares
Student loan borrowers
Eligible taxpayers could deduct up to $5,000 in student loan repayments from New York taxable income, excluding amounts reimbursed or deductible in determining federal adjusted gross income.
Spouses and parents with education debt
Taxpayers who incurred qualifying loans for a spouse or someone who was their dependent when the debt was incurred could also qualify for the deduction.
New York State Department of Taxation and Finance
The agency would administer the new personal income tax deduction for taxable years beginning on or after January 1, 2018.
Headline styles
Deduct Student Loan Payments
Plain English, a few words. Used as the page title.
Sponsors
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.
Deduct Student Loan Payments
In Assembly Committee · Ways And Means · Sponsor Aravella Simotas
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4603
2017-2018 Regular Sessions
IN SENATE
February 21, 2017
Introduced by Sens. COMRIE, ADDABBO, FELDER, HAMILTON, LATIMER, MONTGOM- ERY, PARKER -- 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 authorizing a personal income tax deduction for student loan payments
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 42 to read as follows:
(42) Payment not in excess of five thousand dollars actually paid by an eligible borrower for student loan repayment, to the extent not deductible in determining federal adjusted gross income and not reimbursed. For the purposes of this paragraph, the following terms have the following meanings:
(i) "Student loans" means any indebtedness incurred by the taxpayer solely for any qualified education loan to the extent provided in section 221 of the Internal Revenue Code.
(ii) "Eligible borrower" shall mean a taxpayer who has incurred indebtedness on student loans as defined in subparagraph (i) of this paragraph on behalf of the taxpayer, the taxpayer's spouse, or any dependent of the taxpayer as of the time the indebtedness was incurred.
§ 2. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2018.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00399-01-7
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 authorizing a personal income tax deduction for student loan payments
Purpose
The purpose of this hill is to help alleviate the crushing burden of student loan debt that many young New Yorkers and their parents face.
Summary of provisions
Section 1 of the bill amends Section 612 subsection (c) of the tax law by adding a new paragraph 44, which provides that a taxpayer with student loan debt incurred on behalf of himself, his spouse, or a dependent may take an above-the-line deduction of up to $5,000 in student loan debt not already covered by federal tax deductions and credits.
Justification
This bill is intended to fill a critical need for young college graduates in a difficult job market where more than two million graduates are unemployed. At-the same time, student loans are becoming more and more a necessity, with public-university tuitions more than doubling in the past twenty years, well above the rate of inflation. Borrowers now hold more than $1 trillion in student loan debt - more than credit cards and second to only mortgages. The crushing student loan debt keeps New Yorkers out of the middle class. This bill would allow taxpayers to use up to $5,000 per year in pretax dollars to repay student loans.
Legislative history
2015-16: S.7834/A.2852: Referred to Investigations and Governmental Operations.
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2018.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.