S T A T E O F N E W Y O R K
________________________________________________________________________
5125
2023-2024 Regular Sessions
I N A S S E M B L Y
March 2, 2023
___________
Introduced by M. of A. BARCLAY, PALMESANO, HAWLEY, J. M. GIGLIO, BRABE-
NEC, DiPIETRO, GOODELL, NORRIS, SMITH, MIKULIN, WALSH, MANKTELOW,
MILLER, JENSEN, GALLAHAN, LEMONDES, DeSTEFANO, SIMPSON -- Multi-Spon-
sored by -- M. of A. BLANKENBUSH, K. BROWN, FRIEND -- read once and
referred to the Committee on Ways and Means
AN ACT to amend the tax law, in relation to a tuition tax credit and
increasing the amount of an allowable deduction (Part A); and to amend
the tax law, in relation to reducing income by the amount of interest
paid for student loans (Part B)
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act enacts into law components of legislation relating
to Retain-NY. Each component is wholly contained within a Part identi-
fied as Parts A through B. The effective date for each particular
provision contained within such Part is set forth in the last section of
such Part. Any provision in any section contained within a Part, includ-
ing the effective date of the Part, which makes reference to a section
"of this act", when used in connection with that particular component,
shall be deemed to mean and refer to the corresponding section of the
Part in which it is found. Section three of this act sets forth the
general effective date of this act.
PART A
Section 1. Subparagraph (A) of paragraph 2 of subsection (t) of
section 606 of the tax law, as amended by section 1 of part N of chapter
85 of the laws of 2002, is amended to read as follows:
(A) The term "allowable college tuition expenses" shall mean the
amount of qualified college tuition expenses of eligible students paid
by the taxpayer during the taxable year[,]. THE AMOUNT OF QUALIFIED
COLLEGE TUITION EXPENSES SHALL BE limited [to] AS FOLLOWS: FOR TAXABLE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03831-01-3
A. 5125 2
YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND TWENTY-THREE,
ten thousand dollars for each such student, FOR TAXABLE YEARS BEGINNING
IN OR AFTER TWO THOUSAND TWENTY-THREE, FIFTEEN THOUSAND DOLLARS FOR EACH
SUCH STUDENT;
§ 2. Paragraph 4 of subsection (t) of section 606 of the tax law, as
added by section 1 of part DD of chapter 63 of the laws of 2000, is
amended to read as follows:
(4) Amount of credit. [If allowable college tuition expenses are less
than five thousand dollars, the amount of the credit provided under this
subsection shall be equal to the applicable percentage of the lesser of
allowable college tuition expenses or two hundred dollars. If allowable
college tuition expenses are five thousand dollars or more, the amount
of the credit provided under this subsection shall be equal to the
applicable percentage of the allowable college tuition expenses multi-
plied by four percent.] THE AMOUNT OF THE CREDIT SHALL BE DETERMINED IN
ACCORDANCE WITH THE FOLLOWING SCHEDULES:
(A) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO
THOUSAND TWENTY-THREE:
IF ALLOWABLE COLLEGE TUITION
EXPENSES ARE: THE TAX CREDIT IS EQUAL TO:
LESS THAN FIVE THOUSAND DOLLARS THE APPLICABLE PERCENTAGE OF THE
LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR TWO HUNDRED
DOLLARS
FIVE THOUSAND DOLLARS OR MORE THE APPLICABLE PERCENTAGE
OF ALLOWABLE COLLEGE TUITION
EXPENSES MULTIPLIED BY FOUR PERCENT
(B) FOR TAXABLE YEARS BEGINNING IN OR AFTER TWO THOUSAND TWENTY-THREE:
IF ALLOWABLE COLLEGE TUITION
EXPENSES ARE: THE TAX CREDIT IS EQUAL TO:
LESS THAN SEVEN THOUSAND FIVE THE LESSER OF ALLOWABLE COLLEGE
HUNDRED DOLLARS TUITION EXPENSES OR TWO HUNDRED
NINETY-FIVE DOLLARS
SEVEN THOUSAND FIVE HUNDRED THE ALLOWABLE COLLEGE TUITION
DOLLARS OR MORE EXPENSES MULTIPLIED BY FOUR PERCENT
Such applicable percentage shall be twenty-five percent for taxable
years beginning in two thousand one, fifty percent for taxable years
beginning in two thousand two, seventy-five percent for taxable years
beginning in two thousand three and one hundred percent for taxable
years beginning after two thousand three.
§ 3. Subsection (t) of section 606 of the tax law is amended by adding
a new paragraph 4-a to read as follows:
(4-A) INFLATION ADJUSTMENT. (A) FOR TAXABLE YEARS BEGINNING IN OR
AFTER TWO THOUSAND TWENTY-FOUR, THE DOLLAR AMOUNTS IN SUBPARAGRAPH (A)
OF PARAGRAPH TWO AND PARAGRAPH FOUR OF THIS SUBSECTION SHALL BE MULTI-
PLIED BY ONE PLUS THE INFLATION ADJUSTMENT.
(B) THE INFLATION ADJUSTMENT FOR ANY TAX YEAR SHALL BE THE GREATER OF:
(I) TWO ONE-HUNDREDTHS; OR (II) THE HIGHER EDUCATION PRICE INDEX FOR THE
ACADEMIC FISCAL YEAR IN THE IMMEDIATELY PRECEDING TAX YEAR, WITH THE
RESULT EXPRESSED AS A DECIMAL TO FOUR PLACES. FOR THE PURPOSES OF THIS
PARAGRAPH, THE HIGHER EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION
PRICE INDEX PUBLISHED BY THE COMMON FUND INSTITUTE.
A. 5125 3
(C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPH (A) AND SUBPARAGRAPH
(B) OF THIS PARAGRAPH IS NOT A MULTIPLE OF FIVE DOLLARS, SUCH INCREASE
SHALL BE ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS.
§ 4. This act shall take effect immediately.
PART B
Section 1. Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 47 to read as follows:
(47) FOR TAX YEARS COMMENCING AFTER DECEMBER FIRST, TWO THOUSAND TWEN-
TY-THREE, FOR ELIGIBLE BORROWERS, ALL INTEREST PAID ON STUDENT LOANS TO
THE EXTENT NOT DEDUCTIBLE IN DETERMINING FEDERAL ADJUSTED GROSS INCOME
AND NOT REIMBURSED. FOR THE PURPOSES OF THIS PARAGRAPH, THE FOLLOWING
TERMS HAVE THE FOLLOWING MEANINGS:
(I) "STUDENT LOANS" MEANS ANY INDEBTEDNESS INCURRED BY THE TAXPAYER
SOLELY FOR ANY QUALIFIED EDUCATION LOAN DEFINED BY SECTION 221(D) OF THE
INTERNAL REVENUE CODE FROM A LENDER.
(II) "ELIGIBLE BORROWER" SHALL MEAN A TAXPAYER WHO HAS INCURRED
INDEBTEDNESS ON STUDENT LOANS AS DEFINED IN SUBPARAGRAPH (I) OF THIS
PARAGRAPH ON BEHALF OF THE TAXPAYER, THE TAXPAYER'S SPOUSE, OR ANY
DEPENDENT OF THE TAXPAYER AT THE TIME THE INDEBTEDNESS WAS INCURRED.
(III) "LENDER" MEANS A BANK, SAVINGS AND LOAN ASSOCIATION, CREDIT
UNION, PENSION FUND, INSURANCE COMPANY, SCHOOL, OR STATE LENDING AGENCY.
§ 2. This act shall take effect immediately.
§ 2. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid and after exhaustion of all further judicial review, the
judgment shall not affect, impair, or invalidate the remainder thereof,
but shall be confined in its operation to the clause, sentence, para-
graph, section or part of this act directly involved in the controversy
in which the judgment shall have been rendered.
§ 3. This act shall take effect immediately provided, however, that
the applicable effective date of Parts A through B of this act shall be
as specifically set forth in the last section of such Parts.