Includes the tuition required for enrollment or attendance in a course of study leading to the granting of a post baccalaureate or other graduate degree within the definition of "qualified college tuition expenses" for the purposes of qualifying for the college tuition credit.
TITLE OF BILL: An act to amend the tax law, in relation to including the tuition of graduate students within the college tuition credit
PURPOSE OR GENERAL IDEA OF BILL: Tax tuition credit for graduate students.
SUMMARY OF SPECIFIC PROVISIONS: Subparagraph (c) of paragraph two of subsection (t) of section 606 of the tax law is amended to provide a tax credit for students enrolled in a graduate program.
JUSTIFICATION: Current law provides for a college tuition tax credit to students enrolled or attending an institution of higher education, whether full or part-time. An institution of higher education is defined in the statute as any institution of higher education or business, trade, technical, or other occupational school recognized and approved by an accrediting agency. Tuition payments required for enrollment or attendance in course of study leading to a post-baccalaureate or other graduate degree are specifically exempted from the tax credit.
The maximum amount of qualified tuition expenses allowed for each eligible student is $10,000. If the total qualified tuition expenses are more than $5,000, the credit for 2004 is four-percent of the qualified tuition expenses up to $10,000 per student. Therefore, the maximum tuition credit allowed for 2004 would be $400 per student. If the total qualified tuition expenses are less than $5,000, the credit is equal to the lesser of the total qualified college tuition expenses or $200. The student is therefore not credited back the entire amount of tuition but at most only $400 per student.
Logically, the college tuition tax credit should be extended to cover qualified graduate tuition expenses as well. Total graduate enrollment has generally increased in the past three decades. College costs continue to rise, outpacing the rate of inflation. The percentage of undergraduates who have borrowed and the average total amount borrowed has consistently increased. Individuals often incur enormous debt to earn a college education with no guarantee of job placement. During slow economic times, businesses are not hiring and college graduates unable to find jobs are choosing to attend graduate school, thus, taking on additional debt burdens.
The graduate college tax credit will help those who need the tax credit most. New York State graduate students, who often have greater debt burdens then undergraduate students, will be able to obtain a graduate degree without mortgaging their future. Those with graduate degrees potentially will earn more money and collectively better this state and country. Therefore, the college tuition tax credit should be expanded to graduate college tuition.
PRIOR LEGISLATIVE HISTORY: S.2435 of 2007/08 S.4094 of 2011/12
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: Immediately and shall apply to taxable years beginning on or after January 1, 2013.
STATE OF NEW YORK ________________________________________________________________________ 4094--A 2011-2012 Regular Sessions IN SENATE March 17, 2011 ___________Introduced by Sen. SMITH -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the tax law, in relation to including the tuition of graduate students within the college tuition credit THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subparagraph (C) of paragraph 2 of subsection (t) of section 606 of the tax law, as amended by section 1 of part N of chapter 85 of the laws of 2002, is amended to read as follows: (C) The term "qualified college tuition expenses" shall mean the tuition required for the enrollment or attendance of an eligible student at an institution of higher education. Provided, however, tuition payments made pursuant to the receipt of any scholarships or financial aid
[, or tuition required for enrollment or attendance in a course of study leading to the granting of a post baccalaureate or other graduate degree,]shall be excluded from the definition of "qualified college tuition expenses". 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. LBD10264-02-2