BILL NUMBER:S1222

TITLE OF BILL:

An act to amend the tax law, in relation to increasing the college
tuition personal income tax credit

PURPOSE:

To increase the amount of tuition expenses that can be claimed for the
tuition tax credit.

SUMMARY OF PROVISIONS:

Section 1. Amends subparagraph (A) of paragraph 2 of subsection (t) of
section 606 of the tax law to double the amount that can be claimed as
an allowable college tuition expense from ten thousand dollars to
twenty thousand dollars.

Section 2. Effective date.

JUSTIFICATION:

New York State currently helps lessen the burden on families coping
with paying for college by offering the option of a credit or
deduction for college tuition expenses they incur during a tax year.
              

A participating New York taxpayer can claim this credit or deduction
on tuition expenses they paid for themselves, a spouse or a dependent.
The credit or deduction can be claimed on expenses paid to any
accredited college or university, whether it be in New York or outside
of New York, and regardless of whether it is public or private.
Families in New York get a choice of applying for a credit, which is
money they get back after their tax liability is calculated, or
claiming a deduction, which lowers their taxable income, depending on
which solution they find most helpful.

The amount of tuition expenses that can be claimed for this credit has
not been changed since 2001, when this credit was created. According
to a report by the College Board, the average cost of tuition at a
private nonprofit four-year institution was $29,056 for the 2012-13
academic year, a 26% increase from the 2002-03 academic year. In the
same time the average tuition for public four-year institutions has
climbed by 40% according to this same study. The current credit amount
needs to increase to keep up with this massive inflation in college
costs.

LEGISLATIVE HISTORY:

2014: S6697-A/A9664 - Investigations & Government Operations/Ways &
Means

FISCAL IMPLICATIONS:

This legislation would double the amount individuals can claim as
eligible tuition expenses for the tuition tax credit. Currently, this
tax expenditure is estimated to cost the state $250 million. The most
conservative estimate is that this legislation would double this cost,


and thus would cost the state an additional $250 million in lost tax
revenue annually.

EFFECTIVE DATE:

This act shall take effect immediately, and shall apply to the taxable
year in which it takes effect and taxable years commencing on or after
such date.