Bill > S02502

This bill amends the New York State tax law to allow taxpayers to deduct student loan interest from their federal adjusted gross income, specifically referencing the provisions outlined in 26 USC § 221 (the federal tax code section governing student loan interest deductions). By adding a new paragraph to section 612(c) of the tax law, the bill enables taxpayers to subtract the amount of interest paid on qualified education loans from their taxable income, which can potentially reduce their overall state tax liability. The provision will take effect for taxable years beginning on or after January 1, 2026, meaning taxpayers can first claim this deduction when filing their 2026 tax returns. This change aligns New York State tax law more closely with federal tax treatment of student loan interest and provides a potential financial benefit to individuals with student loan debt by lowering their taxable income.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S2502