What's happening
This bill doubles the state tax deduction limits for contributions to New York family tuition (529) accounts.
Why it matters
Increases incentives for college savings. By doubling the maximum state tax deduction for 529 plan contributions, the bill encourages families to save more for future education costs, potentially making higher education more affordable in the long run.
Benefits higher-income savers most. The expanded deduction primarily benefits those with enough disposable income to contribute larger amounts to 529 accounts, potentially widening the gap between families who can afford to save and those who cannot.
Immediate impact on taxpayers. The changes would take effect right away for the current and future tax years, allowing families to adjust their savings strategies and potentially lower their state tax bills without delay.
State revenue implications. By allowing larger deductions, the bill could reduce New York State’s tax revenues, which might impact funding for other public programs unless offset by increased economic activity or other revenue sources.
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Who cares
Headline styles
Raise Tax-Free College Savings
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 38
No co-sponsors yet.
History
- Referred to budget and revenue
- Referred to budget and revenue
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.
Raise Tax-Free Tuition Limits
In Assembly Committee · Ways And Means · Sponsor Steven Englebright
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3485
2019-2020 Regular Sessions
IN SENATE
February 7, 2019
Introduced by Sen. CARLUCCI -- 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 contributions to family tuition accounts
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph 32 of subsection (c) of section 612 of the tax law, as amended by chapter 81 of the laws of 2008, is amended to read as follows:
(32) Contributions made during the taxable year by an account owner to one or more family tuition accounts established under the New York state college choice tuition savings program provided for under article fourteen-A of the education law, to the extent not deductible or eligible for credit for federal income tax purposes, provided, however, the exclusion provided for in this paragraph shall not exceed [five] ten thousand dollars for an individual or head of household, and for married couples who file joint tax returns, shall not exceed [ten] twenty thousand dollars; provided, further, that such exclusion shall be available only to the account owner and not to any other person.
§ 2. This act shall take effect immediately, and shall apply to the taxable year in which it takes effect and taxable years commencing on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06244-01-9
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 contrib- utions to family tuition accounts
Purpose
To increase the amount that a family can deduct from their income taxes for contributions to the college choice tuition savings accounts.
Summary of provisions
Section 1. Amends paragraph 32 of subsection (c) of section 612 of the tax law to double the exclusion a single payer can claim for contrib- utions to a family tuition account from five to ten thousand dollars for a single filer, and from ten to twenty thousand dollars for married filers filing jointly.
Section 2. Effective date.
Justification
In the late 1990s New York created the New York State College Choice Tuition Savings Program, also known as the 529 College Savings Program. Families can set up 529 accounts for their children and contributions into these accounts can be later used to pay for any qualifying educa- tional expenses, be it tuition, fees, textbooks, and certain room and board costs. New York's 529 College Savings Program has proven quite popular. According to market reports New York's College Savings Program is the second largest in the country, with over 764,000 account open totaling over $14.23 billion in funds invested in the program.
The amounts that individuals can deduct from their taxes for contrib- utions to these accounts has not changed since the early 2000s. As the College Board report shows, the increase in the costs of tuition plus additional expenses has been significant. The average total costs at four-year private nonprofit institutions have increased by 25% from the 2002-03 academic year to the 2012-13 academic year and at public four- year institutions the increase has been an incredible 45% in the same time. The amount individuals can contribute to these accounts tax free needs to keep up with the massive inflation in college costs that we have seen in the last decade.
Legislative history
2017-18: S396/A6272 - INVESTIGATIONS & GOV'T OPS/ways & means 2015-16: 51225/A6580 - Investigations & Government Operations/Ways & Means 2014: S7197/A9665 - Investigations & Government Operations/Ways & Means
Fiscal implications
This legislation would double the amount that filers can deduct from their income taxes for contributions to family tuition accounts. Currently, this tax expenditure is estimated to cost the state $55 million. It is estimated that enactment of this legislation would result in an additional cost to the state of $20 million.
Effective date
This act shall take effect immediately, and shall apply to the taxable year in which it takes effect and taxable years commencing on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.