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.