Senate Bill S2879A

                                BILL NUMBER:S2879

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 eligi-
ble 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 contin-
ue to rise, outpacing the rate of inflation. The percentage of under-
graduates 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 20011/12

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE:  Immediately and shall apply to taxable years beginning
on or after January 1, 2014.