What's happening
This bill creates a tax credit for New York employers who contribute to employees' college tuition savings accounts, up to $5,000 per employee.
Why it matters
This tax credit could incentivize more employers to offer contributions to employees’ college savings accounts, potentially making higher education more affordable for workers and their families.
By tying the credit to New York’s state-sponsored tuition savings plans (e.g., 529 plans), the bill aims to boost participation in these accounts, which can grow tax-free and are specifically designed for educational expenses.
The refundable nature of the credit (allowing unused portions to be credited or refunded) makes it more accessible and valuable for smaller employers or those with lower tax liabilities, potentially broadening its impact across a wider range of businesses.
The bill includes provisions for recapturing the credit if conditions are not met, which encourages compliance and ensures the incentive is used as intended, safeguarding against misuse.
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Tax Credit for College Savings
Plain English, a few words. Used as the page title.
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History
- Referred to ways and means
- Referred to ways and means
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.
Tax Credit for College Savings
In Senate Committee · Budget And Revenue · Sponsor Kevin Thomas
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8243
2019-2020 Regular Sessions
IN ASSEMBLY
June 10, 2019
Introduced by M. of A. EPSTEIN -- read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to creating a tax credit for employers who contribute to a college choice tuition savings account on behalf of an employee
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 210-B of the tax law is amended by adding a new subdivision 54 to read as follows:
54. Employer college choice tuition savings contribution credit. (a) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in paragraph (b) of this subdivision, against the tax imposed by this article, if it provides a contribution, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee.
(b) Amount of credit. The credit allowed pursuant to paragraph (a) of this subdivision shall be in an amount equal to the taxpayer's payment, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee. Provided, however, that no such credit allowed under this subdivision shall exceed five thousand dollars per employee.
(c) Application of credit. The credit allowed under this subdivision for any taxable year shall not reduce the tax due for such year to less than the amount prescribed in paragraph (d) of subdivision one of section two hundred ten of this article. If, however, the amount of credits allowed under this subdivision for any taxable year reduces the tax to such amount, any amount of credit thus not deductible in such taxable year shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided, however, the provisions of
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10997-05-9
A. 8243 2
subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
(d) Credit recapture. For provisions requiring recapture of credit, see section forty-four of this chapter.
§ 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xlv) to read as follows: (xlv) Employer college Amount of credit choice tuition savings under subdivision contribution credit under fifty-four of section subsection (kkk) two hundred ten-B
§ 3. Section 606 of the tax law is amended by adding a new subsection (kkk) to read as follows:
(kkk) Employer college choice tuition savings contribution credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in paragraph two of this subsection, against the tax imposed by this article, if it provides for a contribution, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee.
(2) Amount of credit. The credit allowed pursuant to paragraph one of this subsection shall be in an amount equal to the taxpayer's contribution, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee. Provided, however, that no such credit allowed under this subsection shall exceed five thousand dollars per employee.
(3) Application of credit. If the amount of the credit allowed under this subsection for any taxable year shall exceed the taxpayer's tax for such year, the excess shall be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section six hundred eighty-six of this article, provided, however, that no interest shall be paid thereon.
(4) Credit recapture. For provisions requiring recapture of credit, see section forty-four of this chapter.
§ 4. Section 1511 of the tax law is amended by adding a new subdivision (ee) to read as follows:
(ee) Employer college choice tuition savings contribution credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computed as provided in paragraph (2) of this subdivision, against the tax imposed by this article, if it provides a contribution, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee.
(2) Amount of credit. The credit allowed pursuant to paragraph one of this subdivision shall be in an amount equal to the taxpayer's payment, on behalf of an employee, to a family tuition account established under article fourteen-A of the education law by such employee. Provided, however, that no such credit allowed under this subdivision shall exceed five thousand dollars per employee.
(3) Application of credit. The credit allowed under this subdivision shall not reduce the tax due for such year to be less than the minimum fixed by paragraph four of subdivision (a) of section fifteen hundred two or section fifteen hundred two-a of this article, whichever is applicable. However, if the amount of the credit allowed under this subdivision for any taxable year reduces the taxpayer's tax to such amount, any amount of credit thus not deductible will be treated as an overpayment of tax to be credited or refunded in accordance with the provisions of section one thousand eighty-six of this chapter. Provided,
A. 8243 3
however, the provisions of subsection (c) of one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
(4) Credit recapture. For provisions requiring recapture of credit, see section forty-four of this chapter.
§ 5. This act shall take effect immediately and shall apply to taxable years beginning on and after the first of January next succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
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