A 9207: Relates to a tuition tax credit; increases the amount of an allowable deduction (Part A); reduces income by the amount of interest paid for student loans (Part B).

  
  STATE OF NEW YORK ________________________________________________________________________ 9207 2025-2026 Regular Sessions  IN ASSEMBLY November 3, 2025 ___________ Introduced by M. of A. BARCLAY, PALMESANO, HAWLEY, BRABENEC, DiPIETRO, SMITH, MIKULIN, WALSH, MANKTELOW, MILLER, JENSEN, GALLAHAN, LEMONDES, DeSTEFANO, SIMPSON -- Multi-Sponsored 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: 1 Section 1. This act enacts into law components of legislation relating 2 to Retain-NY. Each component is wholly contained within a Part identi- 3 fied as Parts A through B. The effective date for each particular 4 provision contained within such Part is set forth in the last section of 5 such Part. Any provision in any section contained within a Part, includ- 6 ing the effective date of the Part, which makes reference to a section 7 "of this act", when used in connection with that particular component, 8 shall be deemed to mean and refer to the corresponding section of the 9 Part in which it is found. Section three of this act sets forth the 10 general effective date of this act. 11 PART A 12 Section 1. Subparagraph (A) of paragraph 2 of subsection (t) of 13 section 606 of the tax law, as amended by section 1 of part N of chapter 14 85 of the laws of 2002, is amended to read as follows: 15 (A) The term "allowable college tuition expenses" shall mean the 16 amount of qualified college tuition expenses of eligible students paid 17 by the taxpayer during the taxable year[,]. The amount of qualified 18 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. LBD02341-01-5 
 A. 9207 2 1 years beginning after two thousand and before two thousand twenty-five, 2 ten thousand dollars for each such student, for taxable years beginning 3 in or after two thousand twenty-five, fifteen thousand dollars for each 4 such student; 5 § 2. Paragraph 4 of subsection (t) of section 606 of the tax law, as 6 added by section 1 of part DD of chapter 63 of the laws of 2000, is 7 amended to read as follows: 8 (4) Amount of credit. [If allowable college tuition expenses are less 9 than five thousand dollars, the amount of the credit provided under this 10 subsection shall be equal to the applicable percentage of the lesser of 11 allowable college tuition expenses or two hundred dollars. If allowable 12 college tuition expenses are five thousand dollars or more, the amount 13 of the credit provided under this subsection shall be equal to the 14 applicable percentage of the allowable college tuition expenses multi- 15 plied by four percent.] The amount of the credit shall be determined in 16 accordance with the following schedules: 17 (A) For taxable years beginning after two thousand and before two 18 thousand twenty-five: 19 If allowable college tuition 20 expenses are: The tax credit is equal to: 21 Less than five thousand dollars the applicable percentage of the 22 lesser of allowable college 23 tuition expenses or two hundred 24 dollars 25 Five thousand dollars or more the applicable percentage 26 of allowable college tuition 27 expenses multiplied by four percent 28 (B) For taxable years beginning in or after two thousand twenty-five: 29 If allowable college tuition 30 expenses are: The tax credit is equal to: 31 Less than seven thousand five the lesser of allowable college 32 hundred dollars tuition expenses or two hundred 33 ninety-five dollars 34 Seven thousand five hundred the allowable college tuition 35 dollars or more expenses multiplied by four percent 36 Such applicable percentage shall be twenty-five percent for taxable 37 years beginning in two thousand one, fifty percent for taxable years 38 beginning in two thousand two, seventy-five percent for taxable years 39 beginning in two thousand three and one hundred percent for taxable 40 years beginning after two thousand three. 41 § 3. Subsection (t) of section 606 of the tax law is amended by adding 42 a new paragraph 4-a to read as follows: 43 (4-a) Inflation adjustment. (A) For taxable years beginning in or 44 after two thousand twenty-six, the dollar amounts in subparagraph (A) of 45 paragraph two and paragraph four of this subsection shall be multiplied 46 by one plus the inflation adjustment. 47 (B) The inflation adjustment for any tax year shall be the greater of: 48 (i) two one-hundredths; or (ii) the higher education price index for the 49 academic fiscal year in the immediately preceding tax year, with the 50 result expressed as a decimal to four places. For the purposes of this 51 paragraph, the higher education price index means the higher education 52 price index published by the Common Fund Institute. 
 A. 9207 3 1 (C) If the product of the amounts in subparagraph (A) and subparagraph 2 (B) of this paragraph is not a multiple of five dollars, such increase 3 shall be rounded to the next multiple of five dollars. 4 § 4. This act shall take effect immediately. 5 PART B 6 Section 1. Subsection (c) of section 612 of the tax law is amended by 7 adding a new paragraph 48 to read as follows: 8 (48) For tax years commencing after December first, two thousand twen- 9 ty-five, for eligible borrowers, all interest paid on student loans to 10 the extent not deductible in determining federal adjusted gross income 11 and not reimbursed. For the purposes of this paragraph, the following 12 terms have the following meanings: 13 (i) "student loans" means any indebtedness incurred by the taxpayer 14 solely for any qualified education loan defined by section 221(d) of the 15 Internal Revenue Code from a lender. 16 (ii) "eligible borrower" shall mean a taxpayer who has incurred 17 indebtedness on student loans as defined in subparagraph (i) of this 18 paragraph on behalf of the taxpayer, the taxpayer's spouse, or any 19 dependent of the taxpayer at the time the indebtedness was incurred. 20 (iii) "lender" means a bank, savings and loan association, credit 21 union, pension fund, insurance company, school, or state lending agency. 22 § 2. This act shall take effect immediately. 23 § 2. Severability. If any clause, sentence, paragraph, section or part 24 of this act shall be adjudged by any court of competent jurisdiction to 25 be invalid and after exhaustion of all further judicial review, the 26 judgment shall not affect, impair, or invalidate the remainder thereof, 27 but shall be confined in its operation to the clause, sentence, para- 28 graph, section or part of this act directly involved in the controversy 29 in which the judgment shall have been rendered. 30 § 3. This act shall take effect immediately provided, however, that 31 the applicable effective date of Parts A through B of this act shall be 32 as specifically set forth in the last section of such Parts.