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.