Senate Bill S4994

                                
 
BILL NUMBER: S4994

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the tax law, in relation to modifications reducing
federal adjusted gross income

 
PURPOSE:

Establishes a state student loan interest tax deduction matching the
federal deduction and for undergraduate loan interest with no income or
total deduction limit to help New Yorkers with student debt.

 
SUMMARY OF PROVISIONS:

Section 1 amends Section 612 of the Tax Law to add a new Paragraph 44 to
establish a state student loan interest tax deduction matching the
federal deduction and with no income or total deduction limit for under-
graduate loan interest.

              

Subparagraph (A) establishes a state tax deduction for student loan
interest equal to the deduction allowed under federal Internal Revenue
Code Section 221.

Subparagraph (B) establishes a state tax deduction for undergraduate
student loan interest with no income or total deduction limit, to the
extent such interest is not used as the basis for a deduction under
subparagraph W.

Section 2 establishes an effective date.

 
JUSTIFICATION:

Over sixty percent of New Yorkers graduate with college debt, and aver-
age debt at graduation in New York is over $27,000 according to The
Institute for College Access & Success.

This debt is impacting these New Yorkers' daily lives including their
ability to make home and car purchases and their decisions about whether
to start a family or a small business, among other consequences.

Massachusetts allows taxpayers to deduct student loan interest payments
from their state income to the same extent such payments are deductible
on the federal level, and allows an additional deduction for undergradu-
ate loan interest that is not otherwise deductible under the federal
rules. This bill would establish a similar framework for New York,
adding an additional state level deduction for student loan interest to
match the federal deduction and permitting an additional state deduction
for undergraduate loan interest with no income or total deduction limit.

 
LEGISLATIVE HISTORY:

2019-20: S.4751 - Referred to Investigations and Government Operations
2017-18: S5040 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
2015-16: 5.7487 (PERKINS)- REFERRED TO INVESTIGATIONS AND GOVERNMENT
OPERATIONS

 
FISCAL IMPLICATIONS:
To be determined.

 
EFFECTIVE DATE:
Tax year for the year in which the legislation becomes law.