S T A T E O F N E W Y O R K
________________________________________________________________________
7781
2015-2016 Regular Sessions
I N A S S E M B L Y
May 27, 2015
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Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to lump sum distributions used
for the payment of post-secondary education loans
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 603 of the tax law is amended by adding a new
subsection (c) to read as follows:
(C) EXEMPTION. LUMP SUM DISTRIBUTIONS, AS TAXED UNDER THIS SECTION,
USED FOR PAYMENTS TO AN INSTITUTION RECEIVING ANY SCHEDULED PERIODIC
PAYMENTS FROM A BORROWER PURSUANT TO THE TERMS OF ANY POST-SECONDARY
EDUCATION LOAN, AND MAKING THE PAYMENTS OF PRINCIPAL AND INTEREST AND
OTHER AMOUNTS WITH RESPECT TO THE AMOUNTS RECEIVED FROM THE BORROWER AS
MAY BE REQUIRED PURSUANT TO THE TERMS OF THE POST-SECONDARY EDUCATION
LOAN OR OF THE CONTRACT GOVERNING THE SERVICING; OR, DURING A PERIOD
WHEN PAYMENT ON A POST-SECONDARY EDUCATION LOAN IS DEFERRED, MAINTAINING
ACCOUNT RECORDS FOR THE LOAN AND COMMUNICATING WITH THE BORROWER REGARD-
ING THE LOAN, ON BEHALF OF THE LOAN'S HOLDER SHALL NOT BE SUBJECT TO THE
SEPARATE TAX IMPOSED IN SUBSECTION (A) OF THIS SECTION.
S 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 3-d to read as follows:
(3-D) PENSIONS AND ANNUITIES RECEIVED BY AN INDIVIDUAL OF ANY AGE, NOT
OTHERWISE EXCLUDED PURSUANT TO PARAGRAPH THREE OF THIS SUBSECTION, TO
THE EXTENT INCLUDIBLE IN GROSS INCOME FOR FEDERAL TAX PURPOSES, WHICH
ARISE (I) FROM AN EMPLOYER-EMPLOYEE RELATIONSHIP OR (II) FROM CONTRIB-
UTIONS TO A RETIREMENT PLAN WHICH ARE DEDUCTIBLE FOR FEDERAL INCOME TAX
PURPOSES WHICH ARE USED FOR PAYMENTS TO AN INSTITUTION RECEIVING ANY
SCHEDULED PERIODIC PAYMENTS FROM A BORROWER PURSUANT TO THE TERMS OF ANY
POST-SECONDARY EDUCATION LOAN, AND MAKING THE PAYMENTS OF PRINCIPAL AND
INTEREST AND OTHER AMOUNTS WITH RESPECT TO THE AMOUNTS RECEIVED FROM THE
BORROWER AS MAY BE REQUIRED PURSUANT TO THE TERMS OF THE POST-SECONDARY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10306-02-5
A. 7781 2
EDUCATION LOAN OR OF THE CONTRACT GOVERNING THE SERVICING; OR, DURING A
PERIOD WHEN PAYMENT ON A POST-SECONDARY EDUCATION LOAN IS DEFERRED,
MAINTAINING ACCOUNT RECORDS FOR THE LOAN AND COMMUNICATING WITH THE
BORROWER REGARDING THE LOAN, ON BEHALF OF THE LOAN'S HOLDER. HOWEVER,
THE TERM "PENSIONS AND ANNUITIES" SHALL ALSO INCLUDE DISTRIBUTIONS OF
ANY KIND, INCLUDING ANY LUMP SUM DISTRIBUTIONS, AS DEFINED IN SUBPARA-
GRAPH (A) OF PARAGRAPH FOUR OF SUBSECTION (E) OF SECTION FOUR HUNDRED
TWO OF THE INTERNAL REVENUE CODE AND TAXED UNDER SECTION SIX HUNDRED
THREE OF THIS ARTICLE, RECEIVED BY AN INDIVIDUAL OF ANY AGE FROM AN
INDIVIDUAL RETIREMENT ACCOUNT OR AN INDIVIDUAL RETIREMENT ANNUITY, AS
DEFINED IN SECTION FOUR HUNDRED EIGHT OF THE INTERNAL REVENUE CODE, AND
DISTRIBUTIONS RECEIVED BY AN INDIVIDUAL OF ANY AGE FROM SELF-EMPLOYED
INDIVIDUAL AND OWNER-EMPLOYEE RETIREMENT PLANS WHICH QUALIFY UNDER
SECTION FOUR HUNDRED ONE OF THE INTERNAL REVENUE CODE, WHETHER OR NOT
THE PAYMENTS ARE PERIODIC IN NATURE.
S 3. This act shall take effect immediately and shall apply to taxable
years commencing on or after January 1, 2014.