BILL NUMBER: S6061

SPONSOR: REICHLIN-MELNICK
 
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 one 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 two provides the 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 help-
ful.

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 National Center for Educational Statistics, at private
nonprofit 4-year institutions, average tuition and fees were $35,800 in
2018-19, about 17 percent higher than they were in 2010-11 ($30,500).
From 2008 to 2018, the average tuition at four-year public colleges
increased in all 50 states. On average, tuition at these schools has
increased by 37%, and net costs (including factors like scholarships and
grants) have increased by 24%, according to a 2019 report from the
Center on Budget and Policy Priorities. Increasing the current credit
amount is urgently needed to keep up with the massive inflation in
college costs.

 
LEGISLATIVE HISTORY:

2019-20: S3528 - referred to Budget and Revenue

2017-18: S0712 - referred to Investigations and Government Operations

2015-16: S1222 - referred to Investigations and Government Operations


2014: S6697-A - amended and recommitted to Investigations and Government
Operations

 
FISCAL IMPLICATIONS:

This legislation would double the amount individuals can claim as eligi-
ble tuition expenses for the tuition tax credit. Currently, this tax
expenditure is estimated to cost the state $250 million. Thus doubling
the amount of the credit would cost the state a maximum of 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.