Bill S6487-2013

Establishes an income tax deduction for any payments made on student loans

Establishes an income tax deduction for any payments made on student loans.

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  • Jan 29, 2014: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Memo

BILL NUMBER:S6487

TITLE OF BILL: An act to amend the tax law, in relation to establishing a personal income tax modification reducing federal adjusted gross income for payments of principal and interest on any indebtedness incurred to attend and graduate from any institution of higher education

PURPOSE:

To establish an income tax deduction for any payments made on student loans

SUMMARY OF PROVISIONS:

Section one - amends the tax law by adding by a new paragraph of subsection c by stating the amount of principal and interest paid by a resident taxpayer on any indebtedness incurred for attendance at and graduation from any institution of higher education, as defined in subdivision eight of section two of the education law.

Section two - this act shall take effect immediately and shall apply to payments of principal and interest made during any tax year commencing on or after January 2014, regardless of when the indebtedness was incurred.

JUSTIFICATION:

As the cost of higher education increases, so does the accruing amount of debt, not only for the graduating student but also for older generations that are co-signers on the loans. The tax deduction would assist both the students and past generations by helping make the student loans payments less unbearable and lessen the stress that is incurring on New York State's economy.

The high monthly loan payments are having a negative effect on the economy of the state. Instead of New Yorkers having money going towards the purchasing of a house, a new mortgage or purchasing other consumer products their money is going toward paying off student loans. A state wide tax deduction for both public and private institutions would greatly help with managing the high monthly payments and allow for increased consumer spending that would benefit the economy.

LEGISLATIVE HISTORY:

New legislation.

FISCAL IMPLICATIONS:

To be determined

EFFECTIVE DATE:

This act shall take effect immediately and shall apply to payments of principal and interest made during any tax year commencing on or after January 2014, regardless of when the indebtedness was incurred.


Text

STATE OF NEW YORK ________________________________________________________________________ 6487 IN SENATE January 29, 2014 ___________
Introduced by Sen. BALL -- 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 establishing a personal income tax modification reducing federal adjusted gross income for payments of principal and interest on any indebtedness incurred to attend and graduate from any institution of higher education 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 41 to read as follows: (41) THE AMOUNT OF PRINCIPAL AND INTEREST PAID BY A RESIDENT TAXPAYER ON ANY INDEBTEDNESS INCURRED FOR ATTENDANCE AT AND GRADUATION FROM ANY INSTITUTION OF HIGHER EDUCATION, AS DEFINED IN SUBDIVISION EIGHT OF SECTION TWO OF THE EDUCATION LAW. S 2. This act shall take effect immediately and shall apply to payments of principal and interest made during any tax year commencing on or after January 1, 2014, regardless of when the indebtedness was incurred.

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