What's happening
This bill creates a tax credit for employers and employees when employers pay down employees' governmental education loan debt, up to $10,000 per employee.
Why it matters
Encourages employer contributions to student debt. By offering a significant tax credit for employers who help pay down employees’ governmental education loans, the bill creates a financial incentive for businesses to assist workers with student debt, potentially making such benefits more common in compensation packages.
Direct financial relief for employees. Employees whose employers pay down their governmental education loans not only get their debt reduced but also become eligible for their own state tax credit, offering a double benefit and making these programs more attractive for workers.
Cap limits high earners, broadens impact. The $10,000 per employee annual cap ensures that benefits are distributed more broadly rather than disproportionately aiding a few high earners, and encourages employers to assist multiple employees rather than concentrating resources.
Refundable credits maximize accessibility. Any unused tax credit amount can be refunded (though without interest), which means that smaller businesses or individuals with lower tax liabilities can still fully benefit—making the policy accessible to a wider range of employers and employees, not just those with large tax bills.
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Who cares
Headline styles
Employer Student Loan Tax Credit
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.
Employer Student Loan Tax Credit
In Assembly Committee · Ways And Means · Sponsor Billy Jones
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1973
2019-2020 Regular Sessions
IN SENATE
January 18, 2019
Introduced by Sen. LITTLE -- 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 creating a tax credit for employers who reduce the governmental education loans of their employees and said employees who receive such reduction in governmental education loans
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 53 to read as follows:
53. Employee indebtedness reduction 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 for a payment, on behalf of an employee, of any indebtedness of the employee under a governmental education loan or any interest relating to such a loan. For purposes of this subdivision, "governmental education loan" shall mean any education loan debt, including judgments, owed to the federal or New York state government or any other institution.
(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, of any indebtedness of the employee under a governmental education loan or any interest relating to such a loan. Provided, however, that no such credit allowed under this subdivision shall exceed ten thousand dollars for each employee employed by such employer.
(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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02825-01-9
S. 1973 2
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 subsection (c) of section one thousand eighty-eight of this chapter notwithstanding, no interest shall be paid thereon.
§ 2. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 of the tax law is amended by adding a new clause (xliv) to read as follows: (xliv) Employee indebtedness Amount of credit reduction credit under subdivision under subsection (jjj) fifty-three of section
two hundred ten-B
§ 3. Section 606 of the tax law is amended by adding two new subsections (jjj) and (kkk) to read as follows:
(jjj) Employee indebtedness reduction credit. (1) Allowance of credit. A taxpayer shall be allowed a credit, to be computer as provided in paragraph two of this subsection, against the tax imposed by this article, if it provides for a payment, on behalf of an employee, of any indebtedness of the employee under a governmental education loan or any interest relating to such a loan. For purposes of this subsection, "governmental education loan" shall mean any education loan debt, including judgments, owed to the federal or New York state government or any other institution.
(2) Amount of credit. The credit allowed pursuant to paragraph one of this subsection shall be in an amount equal to the taxpayer's payment, on behalf of an employee, of any indebtedness of the employee under a governmental education loan or any interest relating to such a loan. Provided, however, that no such credit allowed under this subsection shall exceed ten thousand dollars for each employee employed by such employer.
(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.
(kkk) Employer education loan reduction 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 the taxpayer's employer provides for a payment, on behalf of such taxpayer, of any indebtedness of such taxpayer under a governmental education loan or any interest relating to such a loan. For purposes of this subsection, "governmental education loan" shall mean any education loan debt, including judgments, owed to the federal or New York state government or any other institution.
(2) Amount of credit. The credit allowed pursuant to paragraph one of this subsection shall be in an amount equal to the amount paid by the taxpayer's employer to reduce any indebtedness of the taxpayer under a governmental education loan or any interest relating to such a loan. Provided, however, that no such credit allowed under this subsection shall exceed ten thousand dollars.
(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
S. 1973 3
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. This act shall take effect immediately and 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.
Sponsor's memo
Title of bill
An act to amend the tax law, in relation to creating a tax credit for employers who reduce the governmental education loans of their employees and said employees who receive such reduction in governmental education loans
Purpose
This bill would create a tax credit for employers who assist their employees in paying back their governmental education loans that they received during their time as a student.
Summary of provisions
Section 1 amends the tax law by adding a new subdivision that allows a taxpayer a credit if it provides for a payment, on behalf of an employ- ee, of any debt that the employee owes under a governmental education loan or any interest relating to such loan.
Section 2 amends paragraph 1 of subsection (i) of section 606 of the tax law by adding a new clause (xliii).
Section 3 amends section 606 of the tax law by adding two new subsections, (hhh) which would create an employee indebtedness reduction credit, and (iii) which would create an employer education loan reduction credit.
Section 4 contains the effective date.
Justification
Governmental loans not only put financial strain on those who carry them, but also mental and physical stress that could lead to serious issues. This bill provides an incentive for employers to help relieve some of their employee's financial burdens, via governmental loans, while receiving benefits for doing so. This legislation would also open up the job market for those who have governmental loans because they will have an incentive to work for potential companies and organizations that would be willing to pay their loans. Employers could use this not only as a form of recruitment but as a retention strategy for skilled employees.
Legislative history
2017-18: S.5726/A.7491: Referred Investigations & Government Operations; Referred Ways & Means
Fiscal implications
To be determined.
Effective date
This act shall take effect immediately and apply to taxable years begin- ning on and after the first of January next succeeding the date on which it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.