NY State Senate Bill 2025-S1821

Senate Bill S1821

2025-2026 Legislative Session

Establishes a personal income tax deduction for the interest paid on student loans by certain taxpayers

download bill text pdf

Current Bill Status - In Senate Committee Budget And Revenue Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 14, 2025	referred to budget and revenue

2025-S1821 (ACTIVE) - Details

Current Committee:: Senate Budget And Revenue
Law Section:: Tax Law
Laws Affected:: Amd §612, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S7666
2019-2020: S3105
2021-2022: S746
2023-2024: S4436

2025-S1821 (ACTIVE) - Summary

Establishes a personal income tax deduction for the interest paid on student loans by individual taxpayers having a federal adjusted income of between $65,000 and $125,000, and married taxpayers filing jointly having a federal adjusted income of between $130,000 and $250,000.

2025-S1821 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S1821

SPONSOR: FERNANDEZ
 
TITLE OF BILL:

An act to amend the tax law, in relation to establishing a reduction of
certain taxpayer's federal adjusted gross income, for state personal
income tax purposes, for student loan interest payments made by the
taxpayer

 
PURPOSE OR GENERAL IDEA OF BILL:

To establish a state level student loan interest deduction for middle-
income filers (both single and joint) that currently are unable to bene-
fit from the federal deduction.

 
SUMMARY OF PROVISIONS:

Section 1: Amends subsection (c) of section 612 of the tax law by adding
a new paragraph 44 to allow a taxpayer who files singly or as the head
of a household with a federal adjusted income, without the deduction of
any interest paid on student loans, of not less than $65,000 nor more

than $80,000, to receive from the state, the difference between the
student loan interest deduction received by the federal government and
$2,500.

Allows a taxpayer who files singly or as the head of a household with a
federal adjusted gross income of not less than $80,000 nor more than
$125,000, to receive from the state a student loan interest deduction of
$2,500.

Allows a married taxpayer who files jointly a federal adjusted income,
without the deduction of any interest paid on student loans, of not less
than $130,000 nor more than $160,000, to receive from the state, the
difference between the student loan interest deduction received by the
federal government and $2,500.

Allows a married taxpayer who files jointly with a federal adjusted
gross income of not less than $160,000 nor more than $250,000, to
receive from the state a student loan interest deduction of $2,500.

Section 2: Effective Date.

 
JUSTIFICATION:

Although 30 percent of college students do not borrow at all to fund
their degrees, in New York, the average student who borrows to fund
their degree owes $28,974. The aggregate student loan debt in the state
has grown by $43.3 billion in the last 10 years from $38.8 billion in
2006 to $82 billion in 2015.

One of the existing programs that helps individuals deal with this debt
is the student loan interest deduction allowed at the federal level.
This is an above the line deduction of up to $2,500 for individuals
making under $65,000 or a smaller amount up to those making under
$80,000 a year. According to a study by the Center for American
Progress, the average deduction taken by New York tax filers was $1,111
in tax year 2015, the last year for which data is available.

 
PRIOR LEGISLATIVE HISTORY:

2023-2024: S4436 / A6109

2021-2022: S746

2019-2020: S3105

 
FISCAL IMPLICATIONS:

TBD

 
EFFECTIVE DATE:
This act shall take effect immediately, and shall apply to the taxable
year in which it shall take effect and to all subsequent taxable years.

2025-S1821 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1821
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2025
                                ___________
 
 Introduced by Sen. FERNANDEZ -- read twice and ordered printed, and when
   printed to be committed to the Committee on Budget and Revenue
 
 AN  ACT to amend the tax law, in relation to establishing a reduction of
   certain taxpayer's federal adjusted gross income, for  state  personal
   income  tax  purposes,  for student loan interest payments made by the
   taxpayer
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subsection (c) of section 612 of the tax law is amended by
 adding a new paragraph 48 to read as follows:
   (48)(A) (I) FOR A TAXPAYER WHO FILES SINGLY OR AS THE HEAD OF A HOUSE-
 HOLD WITH A FEDERAL ADJUSTED INCOME, WITHOUT THE DEDUCTION OF ANY INTER-
 EST PAID ON STUDENT LOANS, OF NOT LESS THAN SIXTY-FIVE THOUSAND  DOLLARS
 NOR MORE THAN EIGHTY THOUSAND DOLLARS, THE DIFFERENCE BETWEEN THE INTER-
 EST  PAID  ON  STUDENT LOANS BY THE TAXPAYER, IN AN AMOUNT NOT TO EXCEED
 TWO THOUSAND FIVE HUNDRED DOLLARS,  AND  THE  AMOUNT  OF  SUCH  INTEREST
 DEDUCTED  BY  SUCH  TAXPAYER  TO  CALCULATE THEIR FEDERAL ADJUSTED GROSS
 INCOME; AND
   (II) FOR A TAXPAYER WHO FILES SINGLY OR AS THE  HEAD  OF  A  HOUSEHOLD
 WITH  A  FEDERAL  ADJUSTED GROSS INCOME OF NOT LESS THAN EIGHTY THOUSAND
 DOLLARS, NOR MORE THAN ONE HUNDRED TWENTY-FIVE THOUSAND DOLLARS,  INTER-
 EST,  IN AN AMOUNT NOT TO EXCEED TWO THOUSAND FIVE HUNDRED DOLLARS, PAID
 ON INDEBTEDNESS INCURRED FROM A STUDENT LOAN; AND
   (III) FOR MARRIED TAXPAYERS FILING JOINTLY  WITH  A  FEDERAL  ADJUSTED
 GROSS  INCOME,  WITHOUT  THE  DEDUCTION  OF ANY INTEREST PAID ON STUDENT
 LOANS, OF NOT LESS THAN ONE HUNDRED THIRTY THOUSAND  DOLLARS,  NOR  MORE
 THAN  ONE  HUNDRED  SIXTY  THOUSAND  DOLLARS, THE DIFFERENCE BETWEEN THE
 INTEREST PAID ON STUDENT LOANS BY THE TAXPAYERS, IN  AN  AMOUNT  NOT  TO
 EXCEED  TWO THOUSAND FIVE HUNDRED DOLLARS, AND THE AMOUNT OF SUCH INTER-
 EST DEDUCTED BY SUCH TAXPAYERS TO CALCULATE THEIR FEDERAL ADJUSTED GROSS
 INCOME; AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02310-01-5

 S. 1821                             2
 
   (IV) FOR MARRIED TAXPAYERS FILING  JOINTLY  WITH  A  FEDERAL  ADJUSTED
 GROSS  INCOME  OF  NOT LESS THAN ONE HUNDRED SIXTY THOUSAND DOLLARS, NOR
 MORE THAN TWO HUNDRED FIFTY THOUSAND DOLLARS, INTEREST, IN AN AMOUNT NOT
 TO EXCEED TWO  THOUSAND  FIVE  HUNDRED  DOLLARS,  PAID  ON  INDEBTEDNESS
 INCURRED FROM A STUDENT LOAN.
   (B)  FOR THE PURPOSES OF THIS PARAGRAPH, "STUDENT LOAN" SHALL HAVE THE
 SAME MEANING AS ASCRIBED TO SUCH TERM BY SUBPARAGRAPH (B)  OF  PARAGRAPH
 FORTY-TWO OF THIS SUBSECTION, AS ADDED BY CHAPTER FOUR HUNDRED FIFTY-SIX
 OF THE LAWS OF TWO THOUSAND SEVENTEEN.
   §  2.  This  act shall take effect immediately, and shall apply to the
 taxable year in which it shall take effect and to all subsequent taxable
 years.

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