What's happening
This bill allows New York taxpayers to deduct interest paid on qualified education loans or educational debt from their state taxable income.
Why it matters
Provides state tax relief for both federal and certain non-federal student loan interest payments. , expanding beyond the current federal deduction to include interest on loans administered by college financial aid offices—even those from commercial lenders, as long as the loan was used for undergraduate expenses.
Potentially lowers the financial burden for New Yorkers repaying student debt. , making higher education more affordable in the long run and freeing up income for other expenses or savings.
Targets a broader set of borrowers. by allowing deductions for interest on loans not covered by the federal tax code, such as some private or state-administered loans, but prevents double-dipping by prohibiting deductions for the same expenses under both federal and state provisions.
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Who cares
Headline styles
Deduct Student Loan Interest
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
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5040
2017-2018 Regular Sessions
IN SENATE
March 6, 2017
Introduced by Sen. 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 modifications reducing federal adjusted gross income
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. (A) an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan to the extent such interest is deductible in accordance with 26 U.S.C § 221 for federal tax purposes; and (B) an amount equal to the amount of interest payments paid by the taxpayer on education debt during the taxable year. For the purposes of subparagraph (B), the term "educational debt" shall mean any loan which was or is administered by the financial aid office of a twoyear or four-year college at which the taxpayer, or a dependent of such taxpayer, was enrolled as an undergraduate student and which loan has been secured through a state student loan program, a federal student loan program or a commercial lender and which loan was obtained and expended solely for the purposes of paying tuition and other expenses directly related to such undergraduate student enrollment. A taxpayer shall not be eligible for a deduction for the same expenses under subparagraph (A) and subparagraph (B) of this paragraph.
§ 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after January 1st of the calendar year in which it takes effect, and shall apply to the tax year commencing on and after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08324-01-7
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 modifications reducing federal adjusted gross income
Purpose
Establishes a state student loan interest tax deduction matching the federal deduction and for undergraduate loan interest with no income or total deduction limit to help New Yorkers with student debt.
Summary of provisions
Section 1 amends Section 612 of the Tax Law to add a new Paragraph 44 to establish a state student loan interest tax deduction matching the federal deduction and with no income or total deduction limit for undergraduate loan interest.
Subparagraph (A) establishes a state tax deduction for student loan interest equal to the deduction allowed under federal Internal Revenue Code Section 221.
Subparagraph (B) establishes a state tax deduction for undergraduate student loan interest with no income or total deduction limit, to the extent such interest is not used as the basis for a deduction under subparagraph W.
Section 2 establishes an effective date.
Justification
Over sixty percent of New Yorkers graduate with college debt, and average debt at graduation in New York is over $27,000 according to The Institute for College Access & Success.
This debt is impacting these New Yorkers' daily lives including their ability to make home and car purchases and their decisions about whether to start a family or a small business, among other consequences.
Massachusetts allows taxpayers to deduct student loan interest payments from their state income to the same extent such payments are deductible on the federal level, and allows an additional deduction for undergraduate loan interest that is not otherwise deductible under the federal rules. This bill would establish a similar framework for New York, adding an additional state level deduction for student loan interest to match the federal deduction and permitting an additional state deduction for undergraduate loan interest with no income or total deduction limit.
Legislative history
2015-16: S.7487 (PERKINS)- REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
Fiscal implications
To be determined.
Effective date
Tax year for the year in which the legislation becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.