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.
Impact
If enacted, A08442 will amend existing tax law to establish a clear provision for the deduction of student loan interest at the state level. This change is expected to enhance the financial situation of many middle-income families, making a notable difference in their disposable income. The essence of the bill reflects a growing acknowledgment of the challenges posed by student debt, especially within the context of rising tuition fees and living costs. By reducing the tax burden for individuals with student loan debt, the state aims to assist in fostering economic stability for residents who are often seen as the backbone of the state economy.
Summary
Bill A08442, introduced in the New York Assembly, proposes a personal income tax deduction specifically for the interest paid on student loans. This bill targets individual taxpayers who earn between $65,000 and $125,000, and married couples filing jointly with a combined income of $130,000 to $250,000. The goal is to provide financial relief to middle-class borrowers grappling with student loan debt by allowing them to reduce their taxable income by the amount of interest they pay on their student loans, capped at $2,500. This would provide a significant tax break aimed at easing the financial burden of higher education costs on families and individuals alike, potentially making higher education more accessible and affordable.
Contention
While there is considerable support for A08442 among lawmakers who empathize with constituents facing significant student debt, there may be points of contention related to its fiscal implications. Critics may argue about the potential loss of tax revenue that could impact state services, suggesting that the deduction may disproportionately benefit higher-income earners within the specified brackets. The bill's effectiveness in genuinely alleviating financial pressure on lower-income or disadvantaged students may also be scrutinized, as it provides no direct assistance for those who do not meet the income thresholds. Additionally, some may question whether tax incentives are the best approach to address the broader issues of student debt and education affordability.
Same As
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.
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.
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.
Establishes a reduction of federal adjusted gross income, for state personal income tax purposes, for student loan interest payments made by taxpayers.
Disregards any amount included in an individual taxpayer's federal adjusted gross income as a result of the federal child tax credit for purposes of calculating an individual taxpayer's federal income tax deduction.