Bill S4576A-2013

Provides tax credit for allowable college expenses

Provides tax credit for allowable college expenses.

Details

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  • Mar 7, 2014: PRINT NUMBER 4576A
  • Mar 7, 2014: AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Jan 8, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • Apr 11, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S4576A

TITLE OF BILL: An act to amend the tax law, in relation to providing a tax credit for allowable college expenses

PURPOSE: To establish the "Stay in New York Tax Credit"

SUMMARY OF PROVISIONS:

Section 1. Amends section 606 of the tax law to add a new section (u) to establish the stay in New York Tax Credit. The amount of the credit would be equal to 25% of allowable college expenses, capped at $3000. Additionally, this section establishes the criteria required to qualify for the credit.

Section 2. Amends the subparagraph (A) of paragraph 2 of subsection (t) of section 606 of the tax law to define the term allowable college tuition expenses.

Section 3. Amends paragraph 4 of subsection (t) of section 606 of the tax law to improve New York's current tax credit.

Section 4.. Amends subsection (t) of section 606 of the tax law to add a new section 4-a to create an inflation adjustment for the credit.

Section 5. Sets forth the effective date.

JUSTIFICATION: This bill amends the tax law to create the Stay in New York Tax Credit in order to retain graduates from New York colleges and universities. The credit would allow college graduates to receive a credit equal to their college expenses over four years. This credit would be capped at $3000 per year and would apply to those graduates who live and work in New York subsequent to graduation and who complete community service while they are attending college.

Additionally, this bill improves New York's current tax credit by doubling the amount of qualified college expenses that can be claimed from $10,000 to $20,000 over five years and would double the amount of the credit allowed from $400 to $800 during that same time period. Furthermore, this bill would index the qualified tuition expenses and the credit to the rate of inflation of the Higher Education Price Index.

With the cost of higher education increasing and the amount of student loan debt accumulated prior to graduation growing at an alarming rate, this bill would ease the burden of repayment by creating a new tax credit and improving the already existing program in order to offset the costs of college. Additionally, this bill encourages students to complete community service while in college and to remain in New York State upon graduation.

LEGISLATIVE HISTORY: This bill was included as part A of the college affordability package, S.7449A of 2012

FISCAL IMPLICATIONS: $212 million by 2016.

EFFECTIVE DATE: This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2015; provided, however, that section one of this act shall apply to years beginning on or after January 1, 2016.


Text

STATE OF NEW YORK ________________________________________________________________________ 4576--A 2013-2014 Regular Sessions IN SENATE April 11, 2013 ___________
Introduced by Sen. LAVALLE -- 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 providing a tax credit for allowable college expenses THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subsections (yy) and (zz) of section 606 of the tax law, as relettered by section 5 of part H of chapter 1 of the laws of 2003, are relettered subsections (yyy) and (zzz) and a new subsection (u) is added to read as follows: (U) STAY IN NEW YORK CREDIT. (1) GENERAL. (A) A RESIDENT TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALLOWABLE COLLEGE EXPENSES. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO TWENTY-FIVE PERCENT OF ALLOWABLE COLLEGE EXPENSES, CAPPED AT THREE THOU- SAND DOLLARS. THE CREDIT SHALL BE ALLOWED ONLY IN THE FIRST TAXABLE YEAR SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF A COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE AND IN EACH OF THE NEXT THREE TAXABLE YEARS. (B) IN ORDER TO QUALIFY FOR THE CREDIT, THE ELIGIBLE TAXPAYER SHALL: (I) HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION WITHIN FOUR YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY. PROVIDED, HOWEVER, IF THE ELIGIBLE TAXPAYER WAS EMPLOYED IN EXCESS OF THREE HUNDRED HOURS PER SEMESTER, THE ELIGIBLE TAXPAYER SHALL HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE WITHIN FIVE YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY; (II) BE EMPLOYED FULL-TIME WITHIN THE STATE; AND
(III) HAVE COMPLETED TWENTY HOURS OF COMMUNITY SERVICE PER SEMESTER OF ENROLLMENT IN AN INSTITUTION OF HIGHER EDUCATION. PROVIDED, HOWEVER, FOR THOSE ELIGIBLE TAXPAYERS WHO HAVE BEEN GRANTED DEGREES WITHIN THREE YEARS OF THE EFFECTIVE DATE OF THIS SUBSECTION, SUCH TAXPAYERS SHALL COMPLETE THE COMMUNITY SERVICE WITHIN THE FIRST TAXABLE YEAR IN WHICH THE CREDIT IS CLAIMED. (C) FOR ELIGIBLE TAXPAYERS WHO ENROLL IN A COURSE OF STUDY LEADING TO THE GRANTING OF A POST BACCALAUREATE OR OTHER GRADUATE DEGREE IMMEDIATE- LY FOLLOWING THE RECEIPT OF A BACCALAUREATE DEGREE, THE CREDIT SHALL BE ALLOWED IN THE FIRST TAXABLE YEAR SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF SUCH DEGREE OR WHEN SUCH TAXPAYER CEASES TO BE ENROLLED IN SUCH COURSE OF STUDY AND IN EACH OF THE NEXT THREE TAXABLE YEARS PROVIDED ALL OTHER QUALIFICATIONS OF THIS SUBSECTION ARE MET. (2) ALLOWABLE AND QUALIFIED COLLEGE EXPENSES. FOR THE PURPOSES OF THIS CREDIT: (A) THE TERM "ALLOWABLE COLLEGE EXPENSES" SHALL MEAN THE TOTAL AMOUNT OF QUALIFIED COLLEGE EXPENSES INCURRED BY THE TAXPAYER DURING THE TAXPAYER'S ENROLLMENT IN A COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION. (B) THE TERM "QUALIFIED COLLEGE EXPENSES" SHALL MEAN THE TUITION REQUIRED FOR THE ENROLLMENT OR ATTENDANCE OF THE TAXPAYER AT AN INSTITU- TION OF HIGHER EDUCATION. PROVIDED, HOWEVER, TUITION PAYMENTS MADE PURSUANT TO THE RECEIPT OF ANY SCHOLARSHIPS OR FINANCIAL AID SHALL BE EXCLUDED FROM THE DEFINITION OF "QUALIFIED COLLEGE EXPENSES". (3) INSTITUTION OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS CREDIT, THE TERM "INSTITUTION OF HIGHER EDUCATION" SHALL MEAN ANY INSTITUTION OF HIGHER EDUCATION LOCATED IN THE STATE, RECOGNIZED AND APPROVED BY THE REGENTS, OR ANY SUCCESSOR ORGANIZATION, OF THE UNIVERSITY OF THE STATE OF NEW YORK OR ACCREDITED BY A NATIONALLY RECOGNIZED ACCREDITING AGENCY OR ASSOCIATION ACCEPTED AS SUCH BY THE REGENTS, OR ANY SUCCESSOR ORGAN- IZATION, OF THE UNIVERSITY OF THE STATE OF NEW YORK, WHICH PROVIDES A COURSE OF STUDY LEADING TO THE GRANTING OF A POST-SECONDARY DEGREE, CERTIFICATE OR DIPLOMA. (4) REFUNDABILITY. THE CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR REDUCED BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX AS SO REDUCED, THE TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE COMMISSIONER, SHALL PAY AS AN OVERPAYMENT, WITHOUT INTEREST, THE AMOUNT OF SUCH EXCESS. S 2. Subparagraph (A) 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: (A) The term "allowable college tuition expenses" shall mean the amount of qualified college tuition expenses of eligible students paid by the taxpayer during the taxable year[,]. THE AMOUNT OF QUALIFIED COLLEGE TUITION EXPENSES SHALL BE limited [to] AS FOLLOWS: FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND FIFTEEN, ten thousand dollars for each such student; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, TWELVE THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN, FOURTEEN THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN, SIXTEEN THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND EIGHTEEN, EIGHTEEN THOUSAND DOLLARS FOR EACH STUDENT; AND FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND EIGHTEEN, TWENTY THOUSAND DOLLARS PER STUDENT;
S 3. Paragraph 4 of subsection (t) of section 606 of the tax law, as added by section 1 of part DD of chapter 63 of the laws of 2000, is amended to read as follows: (4) Amount of credit. [If allowable college tuition expenses are less than five thousand dollars, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the lesser of allowable college tuition expenses or two hundred dollars. If allowable college tuition expenses are five thousand dollars or more, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the allowable college tuition expenses multi- plied by four percent.] THE AMOUNT OF THE CREDIT SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING SCHEDULES: (A) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND FIFTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN FIVE THOUSAND DOLLARS THE APPLICABLE PERCENTAGE OF THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED DOLLARS FIVE THOUSAND DOLLARS OR MORE THE APPLICABLE PERCENTAGE OF ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN SIX THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED FORTY DOLLARS SIX THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN SEVEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED EIGHTY DOLLARS SEVEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SEVENTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN EIGHT THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR THREE HUNDRED TWENTY DOLLARS EIGHT THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND EIGHTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN NINE THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR THREE HUNDRED SIXTY DOLLARS NINE THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (F) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND EIGHTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN TEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR FOUR HUNDRED DOLLARS TEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT Such applicable percentage shall be twenty-five percent for taxable years beginning in two thousand one, fifty percent for taxable years beginning in two thousand two, seventy-five percent for taxable years beginning in two thousand three and one hundred percent for taxable years beginning after two thousand three. S 4. Subsection (t) of section 606 of the tax law is amended by adding a new paragraph 4-a to read as follows: (4-A) INFLATION ADJUSTMENT. (A) FOR TAXABLE YEARS BEGINNING IN OR AFTER TWO THOUSAND NINETEEN, THE DOLLAR AMOUNTS IN SUBPARAGRAPH (A) OF PARAGRAPH TWO AND PARAGRAPH FOUR OF THIS SUBSECTION SHALL BE MULTIPLIED BY ONE PLUS THE INFLATION ADJUSTMENT. (B) THE INFLATION ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE, IF ANY, BY WHICH THE HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR ENDING IN THE IMMEDIATELY PRECEDING TAXABLE YEAR EXCEEDS THE HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR ENDING JUNE, TWO THOUSAND EIGHTEEN. FOR THE PURPOSES OF THIS PARAGRAPH, THE HIGHER EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION PRICE INDEX PUBLISHED BY THE COMMONFUND INSTITUTE. (C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH IS NOT A MULTIPLE OF FIVE DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS. S 5. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2015; provided, however, that section one of this act shall apply to taxable years beginning on or after January 1, 2016.

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