Bill > S04018

This bill amends the New York tax law to allow taxpayers to deduct two types of education-related loan interest from their federal adjusted gross income. First, taxpayers can deduct interest paid on qualified education loans that are already deductible for federal tax purposes under Section 26 U.S.C § 221. Second, the bill introduces a new deduction for interest paid on "educational debt," which is specifically defined as loans administered by a two-year or four-year college's financial aid office for an undergraduate student's tuition and related expenses. The loans must have been obtained through state, federal, or commercial student loan programs. Importantly, taxpayers cannot claim both deductions for the same expenses, meaning they must choose between the federal loan interest deduction and the new educational debt interest deduction. The bill will take effect immediately and apply to tax years starting on or after the date of enactment, providing potential tax relief for students and recent graduates with education-related loan payments.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S4018