Massachusetts House Bill H2695

Massachusetts 2023-2024 Regular Session

• Introduced: 2/16/23
• Refer: 2/16/23

Caption

Relative to student loan debt relief tax credit

Impact

If enacted, H2695 would amend the Massachusetts General Laws to incorporate student loan debt relief as a legitimate reason for tax credits. This amendment is expected to have a notable impact on state law by adding provisions that not only define eligibility but also enforce compliance through recapture rules, whereby credits can be retracted if not applied towards loan payments within a designated timeframe. The total credits issued under this bill would be capped at $9 million annually, which places limitations on the extent of the financial relief available to residents.

Summary

House Bill 2695 is aimed at establishing a tax credit for individuals burdened by student loan debt, thus providing financial relief to those who have accrued significant educational expenses. The bill allows qualified taxpayers—defined as individuals with at least $20,000 in student loan debt and a minimum of $5,000 outstanding at the time of application—to apply for a tax credit of up to $2,500. This initiative seeks to alleviate financial pressures associated with student loans, in recognition of the growing concerns about student debt in the United States, particularly among recent graduates entering the workforce.

Contention

Discussions surrounding H2695 may reflect broader contentions regarding fiscal responsibility and the prioritization of state funding. Supporters argue that the bill addresses a critical need among young professionals and can contribute to long-term economic growth by enabling recent graduates to allocate more of their income toward contributing to the economy rather than servicing debt. Critics, however, may raise concerns over potential strains on state revenue and whether this targeted relief effectively aids all those in need, particularly as student loan debt continues to grow nationwide.