Bill > A01245

This bill amends New York state tax law to provide a personal income tax deduction for student loan payments up to $5,000, with several key provisions. The bill defines "student loans" as qualified education loans as defined by the Internal Revenue Code and an "eligible borrower" as a taxpayer who has incurred student loan debt for themselves, their spouse, or dependents. The legislation allows for two specific tax exclusions: first, direct student loan payments up to $5,000 can be deducted from state gross income, and second, employer-facilitated or third-party platform payments toward student loans that are directly deducted from an employee's wages can also be excluded from New York state gross income, again with a $5,000 annual limit. Additionally, the bill includes a provision that allows for similar tax exclusions for payroll-deducted contributions to 529 tuition savings plans, also capped at $5,000 per year. The tax changes will take effect for taxable years beginning on or after January 1, 2026, providing a future tax benefit for New York state residents with student loan debt.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/A1245