S7404-2011 Actions

• May 9, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S7404-2011 Memo

BILL NUMBER:S7404

TITLE OF BILL:
An act to amend the tax law, in relation to authorizing a personal
income  tax deduction for student loan payments

PURPOSE:
The purpose of this bill is to help alleviate the crushing burden of
student loan debt that many young New Yorkers and their parents face.

SUMMARY OF PROVISIONS:
Section 1 of the bill amends Section 612 subsection (c) of the tax law
by adding a new paragraph 39. Paragraph 39 provides that a taxpayer with
student loan debt incurred on behalf of himself, his spouse, or a
dependent may take an above-the-line deduction of up to $5,000 in
student loan debt not already covered by federal tax deductions and
credits.

JUSTIFICATION:
This bill is intended to fill a critical need for young college gradu-
ates in a difficult job market where more than two million graduates are
unemployed. At the same time, student loans are becoming more and more a
necessity, with public-university tuitions more than doubling in the
past twenty years, well above the rate of inflation. Borrowers now hold
more than $1 trillion in student loan debt - more than credit cards and
second to only mortgages. The crushing student loan debt keeps New York-
ers out of the middle class.  This bill would allow taxpayers to use up
to $5,000 per year in pre-tax dollars to repay student loans.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
Shall take effect immediately and shall apply to taxable years beginning
on or after January 1, 2013.

S7404-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         7404
 I N  SENATE
 May 9, 2012
 
 Introduced  by Sen. STAVISKY -- read twice and ordered printed, and when
 printed to be committed to the Committee on Investigations and Govern
 ment Operations
 

AN ACT to amend the tax law,  in  relation  to  authorizing  a  personal
 income  tax deduction for student loan payments
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1. Subsection (c) of section 612 of the tax law is amended  by
 adding a new paragraph 39 to read as follows:

 (39)  PAYMENT  NOT IN EXCESS OF FIVE THOUSAND DOLLARS ACTUALLY PAID BY
 AN ELIGIBLE BORROWER FOR STUDENT  LOAN  REPAYMENT,  TO  THE  EXTENT  NOT
 DEDUCTIBLE  IN  DETERMINING  FEDERAL ADJUSTED GROSS INCOME AND NOT REIM
 BURSED. FOR THE  PURPOSES OF THIS PARAGRAPH, THE  FOLLOWING  TERMS  HAVE
 THE FOLLOWING MEANINGS:

 (I)  "STUDENT  LOANS"  MEANS ANY INDEBTEDNESS INCURRED BY THE TAXPAYER
 SOLELY FOR ANY QUALIFIED  EDUCATION  LOAN  TO  THE  EXTENT  PROVIDED  IN
 SECTION 221 OF THE INTERNAL REVENUE CODE.
 (II)  "ELIGIBLE  BORROWER"  SHALL  MEAN  A  TAXPAYER  WHO HAS INCURRED
 INDEBTEDNESS ON STUDENT LOANS AS DEFINED IN  SUBPARAGRAPH  (I)  OF  THIS
 PARAGRAPH  ON  BEHALF  OF  THE  TAXPAYER,  THE TAXPAYER'S SPOUSE, OR ANY
 DEPENDENT OF THE TAXPAYER AS OF THE TIME THE INDEBTEDNESS WAS INCURRED.
 

S 2. This act shall take effect immediately and shall apply to taxable
 years beginning on or after January 1, 2013.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD15773-01-2

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