What's happening
This bill allows New York taxpayers in specified income ranges to deduct up to $2,500 in student loan interest from state income taxes.
Why it matters
Targets Middle-Income Earners. The bill specifically benefits individuals and couples within defined income brackets, helping those who may not qualify for federal student loan interest deductions due to income phase-outs but still face substantial loan payments.
Addresses Federal Deduction Gaps. It allows taxpayers who were unable to claim the student loan interest deduction on their federal return (because their income was too high or for other reasons) to still receive a state-level tax break, reducing the impact of federal deduction limits.
Supports Household Financial Relief. By enabling a deduction of up to $2,500 in student loan interest, the bill provides tangible financial relief, potentially lowering overall tax bills for borrowers and freeing up income for other uses.
Expands Definition Consistency. The legislation aligns the definition of “student loan” with existing New York tax law, maintaining consistency and reducing confusion for taxpayers and preparers when applying for state deductions.
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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 budget and revenue
- Referred to budget and revenue
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3105
2019-2020 Regular Sessions
IN SENATE
February 4, 2019
Introduced by Sen. BIAGGI -- read twice and ordered printed, and when printed to be committed to the Committee on Budget and Revenue
AN ACT to amend the tax law, in relation to establishing a reduction of certain taxpayer's federal adjusted gross income, for state personal income tax purposes, for student loan interest payments made by the taxpayer
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) (i) For a taxpayer who files singly or as the head of a household with a federal adjusted income, without the deduction of any interest paid on student loans, of not less than sixty-five thousand dollars nor more than eighty thousand dollars, the difference between the interest paid on student loans by the taxpayer, is an amount not to exceed two thousand five hundred dollars, and the amount of such interest deducted by such taxpayer to calculate his or her federal adjusted gross income; and
(ii) For a taxpayer who files singly or as the head of a household with a federal adjusted gross income of not less than eighty thousand dollars, nor more than one hundred twenty-five thousand dollars, interest, in an amount not to exceed two thousand five hundred dollars, paid on indebtedness incurred from a student loan; and
(iii) For married taxpayers filing jointly with a federal adjusted gross income, without the deduction of any interest paid on student loans, of not less than one hundred thirty thousand dollars, nor more than one hundred sixty thousand dollars, the difference between the interest paid on student loans by the taxpayers, is an amount not to exceed two thousand five hundred dollars, and the amount of such interest deducted by such taxpayers to calculate their federal adjusted gross income; and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02308-01-9
S. 3105 2
(iv) For married taxpayers filing jointly with a federal adjusted gross income of not less than one hundred sixty thousand dollars, nor more than two hundred fifty thousand dollars, interest, in an amount not to exceed two thousand five hundred dollars, paid on indebtedness incurred from a student loan.
(B) For the purposes of this paragraph, "student loan" shall have the same meaning as ascribed to such term by subparagraph (B) of paragraph forty-two of this subsection, as added by chapter four hundred fifty-six of the laws of two thousand seventeen.
§ 2. This act shall take effect immediately, and shall apply to the taxable year in which it shall take effect and to all subsequent taxable years.
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 establishing a reduction of certain taxpayer's federal adjusted gross income, for state personal income tax purposes, for student loan interest payments made by the taxpayer
Purpose of bill
To establish a state level student loan interest deduction for middle- income filers (both single and joint) that currently are unable to bene- fit from the federal deduction
Summary of specific provisions
Section 1: Amends subsection (c) of section 612 of the tax law by adding a new paragraph 44 to allow a taxpayer who files singly or as the head of a household with a federal adjusted income, without the deduction of any interest paid on student loans, of not less than $65,000 nor more than $80,000, to receive from the state, the difference between the student loan interest deduction received by the federal government and $2,500.
Allows a taxpayer who files singly or as the head of a household with a federal adjusted gross income of not less than $80,000 nor more than $125,000, to receive from the state a student loan interest deduction of $2,500.
Allows a married taxpayer who files jointly a federal adjusted income, without the deduction of any interest paid on student loans, of not less than $130,000 nor more than $160,000, to receive from the state, the difference between the student loan interest deduction received by the federal government and $2,500.
Allows a married taxpayer who files jointly with a federal adjusted gross income of not less than $160,000 nor more than $250,000, to receive from the state a student loan interest deduction of $2,500.
Section 2: Effective Date.
Justification
Although 30 percent of college students do not borrow at all to fund their degrees, in New York, the average student who borrows to fund their degree owes $28,974. The aggregate student loan debt in the state has grown by $43.3 billion in the last 10 years from $38.8 billion in 2006 to $82 billion in 2015.
One of the existing programs that helps individuals deal with this debt is the student loan interest deduction allowed at the federal level. This is an above the line deduction of up to $2,500 for individuals making under $65,000 or a smaller amount up to those making under $80,000 a year. According to a study by the Center for American Progress, the average deduction taken by New York tax filers was $1,111 in tax year 2015, the last year for which data is available.
Legislative history
2018: Referred to Investigations and Government Operations
Fiscal implications for state and local governments
To be determined.
Effective date
Immediately, and shall apply to the taxable year it shall take effect and to all subsequent taxable years.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.