Bill > S04202

This bill amends New York state tax law to create a new personal income tax deduction for student loan payments, allowing eligible borrowers to deduct up to $5,000 annually for student loan repayments. The bill defines student loans as qualified education loans under the Internal Revenue Code and defines an eligible borrower as a taxpayer who has incurred student loan debt for themselves, their spouse, or dependents. Additionally, the bill provides a tax exclusion for employer-sponsored student loan payments or 529 college savings plan contributions made through payroll deductions, also capped at $5,000 per year. These payments must be directly deducted from an employee's wages and administered by a third-party platform that facilitates payments to educational institutions or loan servicers. The tax provisions will take effect for taxable years beginning on or after January 1, 2026, potentially providing financial relief for New York taxpayers with student loan debt by reducing their state income tax liability.

Budget and Finance

https://www.nysenate.gov/legislation/bills/2025/S4202