Creates a college preparation expense tax credit for up to three year's per child/individual for up to $500 per year for qualified college preparation expenses.
TITLE OF BILL: An act to amend the tax law, in relation to establishing the college preparation tax credit act
PURPOSE: To help families meet the costs of college preparation by allowing them to qualify for a tax credit of up to five hundred dollars per child.
SUMMARY OF PROVISIONS: Section I titles the bill.
Section II amends section 606 of the tax law by adding a new subsection (ccc) which allows a resident taxpayer a credit of up to five hundred dollars per child for qualified college preparation expenses paid or incurred by the taxpayer during a taxable year.
Section III sets forth the effective date.
JUSTIFICATION: College affordability is an issue that working and middle class families continue to struggle with as the expenses for college preparation continue to skyrocket. The costs incurred during the application process often become a financial burden for families who cannot afford to pay for admission tests such as the SAT and the ACT and the preparation courses offered for such tests.
This bill would provide these families with the option to qualify for a tax credit of up to five hundred dollars per child for college preparation expenses paid or incurred during a taxable year. The term "qualified" would apply to the fees required to take the SAT, the ACT, SAT subject tests, Advanced Placement (AP) tests, preparation classes, and admission applications. With tuition costs rising, it is important to provide these families with some form of financial relief as they work to ensure the academic success of their children.
LEGISLATIVE HISTORY: This is a new bill in the Senate.
FISCAL IMPACT ON THE STATE: To be determined.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 7710 IN SENATE June 2, 2014 ___________Introduced by Sen. LANZA -- 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 the college preparation tax credit act THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known and may be cited as the "college preparation tax credit act". S 2. Section 606 of the tax law is amended by adding a new subsection (ccc) to read as follows: (CCC) COLLEGE PREPARATION EXPENSE CREDIT. (1) A RESIDENT TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALLOWABLE COLLEGE PREPARATION EXPENSES. EACH TAXABLE YEAR, A CREDIT OF UP TO FIVE HUNDRED DOLLARS PER CHILD SHALL BE ALLOWED FOR QUALIFIED COLLEGE PREPARATION EXPENSES PAID OR INCURRED BY THE TAXPAYER DURING SUCH TAXABLE YEAR. NO CREDIT SHALL BE ALLOWED FOR ANY EXPENSES PAID OR INCURRED DURING THE TAXABLE YEAR WITH RESPECT TO ANY INDIVIDUAL FOR WHOM AN ELECTION IS NOT IN EFFECT UNDER THIS SUBSECTION FOR SUCH TAXABLE YEAR. AN ELECTION MAY NOT BE MADE FOR ANY TAXABLE YEAR IF SUCH AN ELECTION IS IN EFFECT WITH RESPECT TO SUCH INDIVIDUAL FOR ANY THREE PRIOR TAXABLE YEARS. (2) QUALIFIED COLLEGE PREPARATION EXPENSES. FOR PURPOSES OF THIS SUBSECTION, THE TERM "QUALIFIED COLLEGE PREPARATION EXPENSES" MEANS AMOUNTS PAID OR INCURRED FOR: (A) FEES REQUIRED FOR TAKING ANY ADVANCED PLACEMENT OR INTERNATIONAL BACCALAUREATE EXAM; (B) FEES REQUIRED FOR TAKING THE SAT, THE ACT, OR ANY SAT SUBJECT TEST; (C) EXPENSES RELATED TO PREPARATION INCLUDING TUTORIAL SERVICES AND PREPARATION CLASSES FOR ANY EXAM DESCRIBED IN SUBPARAGRAPH (A) OR (B) OF THIS PARAGRAPH;EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD15301-02-4 S. 7710 2
(D) FEES AND EXPENSES RELATED TO APPLICATIONS FOR ADMISSION TO PURSUE A POSTSECONDARY COURSE OF STUDY AT AN ELIGIBLE EDUCATIONAL INSTITUTION; AND (E) SUCH OTHER SIMILAR EXPENSES AND FEES AS THE COMMISSIONER MAY BY REGULATION PRESCRIBE. (3) TREATMENT OF EXPENSES PAID BY DEPENDENT. IF A DEDUCTION UNDER THIS SUBSECTION WITH RESPECT TO AN INDIVIDUAL IS ALLOWED TO ANOTHER TAXPAYER FOR A TAXABLE YEAR BEGINNING IN THE CALENDAR YEAR IN WHICH SUCH INDIVID- UAL'S TAXABLE YEAR BEGINS: (A) NO CREDIT SHALL BE ALLOWED UNDER PARAGRAPH ONE OF THIS SUBSECTION TO SUCH INDIVIDUAL FOR SUCH INDIVIDUAL'S TAXABLE YEAR; AND (B) QUALIFIED COLLEGE PREPARATION EXPENSES PAID BY SUCH INDIVIDUAL DURING SUCH INDIVIDUAL'S TAXABLE YEAR SHALL BE TREATED FOR PURPOSES OF THIS SUBSECTION AS PAID BY SUCH OTHER TAXPAYER. S 3. This act shall take effect immediately.