Bill Text: CT HB05123 | 2016 | General Assembly | Comm Sub
Bill Title: An Act Establishing A Deduction Under The Personal Income Tax For Interest Paid On Student Loans.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2016-03-04 - Public Hearing 03/09 [HB05123 Detail]
Download: Connecticut-2016-HB05123-Comm_Sub.html
General Assembly |
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February Session, 2016 |
LCO No. 1941 | ||
*01941HB05123FIN* | |||
Referred to Committee on FINANCE, REVENUE AND BONDING |
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Introduced by: |
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(FIN) |
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AN ACT ESTABLISHING A DEDUCTION UNDER THE PERSONAL INCOME TAX FOR INTEREST PAID ON STUDENT LOANS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. Subparagraph (B) of subdivision (20) of subsection (a) of section 12-701 of the 2016 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2017, and applicable to taxable years commencing on or after January 1, 2017):
(B) There shall be subtracted therefrom (i) to the extent properly includable in gross income for federal income tax purposes, any income with respect to which taxation by any state is prohibited by federal law, (ii) to the extent allowable under section 12-718, exempt dividends paid by a regulated investment company, (iii) the amount of any refund or credit for overpayment of income taxes imposed by this state, or any other state of the United States or a political subdivision thereof, or the District of Columbia, to the extent properly includable in gross income for federal income tax purposes, (iv) to the extent properly includable in gross income for federal income tax purposes and not otherwise subtracted from federal adjusted gross income pursuant to clause (x) of this subparagraph in computing Connecticut adjusted gross income, any tier 1 railroad retirement benefits, (v) to the extent any additional allowance for depreciation under Section 168(k) of the Internal Revenue Code, as provided by Section 101 of the Job Creation and Worker Assistance Act of 2002, for property placed in service after December 31, 2001, but prior to September 10, 2004, was added to federal adjusted gross income pursuant to subparagraph (A)(ix) of this subdivision in computing Connecticut adjusted gross income for a taxable year ending after December 31, 2001, twenty-five per cent of such additional allowance for depreciation in each of the four succeeding taxable years, (vi) to the extent properly includable in gross income for federal income tax purposes, any interest income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, (vii) to the extent properly includable in determining the net gain or loss from the sale or other disposition of capital assets for federal income tax purposes, any gain from the sale or exchange of obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district or similar public entity created under the laws of the state of Connecticut, in the income year such gain was recognized, (viii) any interest on indebtedness incurred or continued to purchase or carry obligations or securities the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such interest on indebtedness is not deductible in determining federal adjusted gross income and is attributable to a trade or business carried on by such individual, (ix) ordinary and necessary expenses paid or incurred during the taxable year for the production or collection of income which is subject to taxation under this chapter but exempt from federal income tax, or the management, conservation or maintenance of property held for the production of such income, and the amortizable bond premium for the taxable year on any bond the interest on which is subject to tax under this chapter but exempt from federal income tax, to the extent that such expenses and premiums are not deductible in determining federal adjusted gross income and are attributable to a trade or business carried on by such individual, (x) (I) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or as a married individual filing separately whose federal adjusted gross income for such taxable year is less than fifty thousand dollars, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income for such taxable year is less than sixty thousand dollars or a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is less than sixty thousand dollars, an amount equal to the Social Security benefits includable for federal income tax purposes; and (II) for a person who files a return under the federal income tax as an unmarried individual whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or as a married individual filing separately whose federal adjusted gross income for such taxable year is fifty thousand dollars or more, or for a husband and wife who file a return under the federal income tax as married individuals filing jointly whose federal adjusted gross income from such taxable year is sixty thousand dollars or more or for a person who files a return under the federal income tax as a head of household whose federal adjusted gross income for such taxable year is sixty thousand dollars or more, an amount equal to the difference between the amount of Social Security benefits includable for federal income tax purposes and the lesser of twenty-five per cent of the Social Security benefits received during the taxable year, or twenty-five per cent of the excess described in Section 86(b)(1) of the Internal Revenue Code, (xi) to the extent properly includable in gross income for federal income tax purposes, any amount rebated to a taxpayer pursuant to section 12-746, (xii) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, any distribution to such beneficiary from any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiii) to the extent allowable under section 12-701a, contributions to accounts established pursuant to any qualified state tuition program, as defined in Section 529(b) of the Internal Revenue Code, established and maintained by this state or any official, agency or instrumentality of the state, (xiv) to the extent properly includable in gross income for federal income tax purposes, the amount of any Holocaust victims' settlement payment received in the taxable year by a Holocaust victim, (xv) to the extent properly includable in gross income for federal income tax purposes of an account holder, as defined in section 31-51ww, interest earned on funds deposited in the individual development account, as defined in section 31-51ww, of such account holder, (xvi) to the extent properly includable in the gross income for federal income tax purposes of a designated beneficiary, as defined in section 3-123aa, interest, dividends or capital gains earned on contributions to accounts established for the designated beneficiary pursuant to the Connecticut Homecare Option Program for the Elderly established by sections 3-123aa to 3-123ff, inclusive, (xvii) to the extent properly includable in gross income for federal income tax purposes, any income received from the United States government as retirement pay for a retired member of (I) the Armed Forces of the United States, as defined in Section 101 of Title 10 of the United States Code, or (II) the National Guard, as defined in Section 101 of Title 10 of the United States Code, (xviii) to the extent properly includable in gross income for federal income tax purposes for the taxable year, any income from the discharge of indebtedness in connection with any reacquisition, after December 31, 2008, and before January 1, 2011, of an applicable debt instrument or instruments, as those terms are defined in Section 108 of the Internal Revenue Code, as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009, to the extent any such income was added to federal adjusted gross income pursuant to subparagraph (A)(xi) of this subdivision in computing Connecticut adjusted gross income for a preceding taxable year, (xix) to the extent not deductible in determining federal adjusted gross income, the amount of any contribution to a manufacturing reinvestment account established pursuant to section 32-9zz in the taxable year that such contribution is made, [and] (xx) to the extent properly includable in gross income for federal income tax purposes, for the taxable year commencing January 1, 2015, ten per cent of the income received from the state teachers' retirement system, for the taxable year commencing January 1, 2016, twenty-five per cent of the income received from the state teachers' retirement system, and for the taxable year commencing January 1, 2017, and each taxable year thereafter, fifty per cent of the income received from the state teachers' retirement system, and (xxi) to the extent allowable under section 2 of this act, the amount of payments made during the taxable year for interest on a student loan.
Sec. 2. (NEW) (Effective January 1, 2017, and applicable to taxable years commencing on or after January 1, 2017) (a) For the purposes of this section:
(1) "Qualified student loan" means a loan taken out solely to pay qualified education expenses (A) for the taxpayer, the taxpayer's spouse or a person who was a dependent of the taxpayer at the time when the taxpayer took out the loan, (B) paid or incurred within a reasonable period of time before or after the taxpayer took out the loan, and (C) for education provided during an academic period for an eligible student;
(2) "Qualified education expenses" means the total costs of attending an eligible institution of higher education, including graduate school, and includes amounts paid for the following items: (A) Tuition and fees; (B) room and board, provided the cost of room and board qualifies only to the extent that it is not more than the greater of (i) the allowance for room and board, as determined by the eligible institution of higher education, that was included in the cost of attendance for a particular academic period and living arrangement of the student, or (ii) the actual amount charged if the student is residing in housing owned or operated by the eligible institution of higher education; (C) books, supplies and equipment; and (D) other necessary expenses, including, but not limited to, transportation;
(3) "Eligible institution of higher education" means any institution of higher education that is eligible to participate in a student aid program administered by the United States Department of Education; and
(4) "Eligible student" means a student who is or was enrolled at least half-time in a certificate or degree program at an eligible institution of higher education.
(b) The maximum annual modification under subparagraph (B)(xxi) of subdivision (20) of subsection (a) of section 12-701 of the general statutes, as amended by this act, shall be equal to the amount of interest paid on a qualified student loan, but shall not exceed two thousand five hundred dollars for each taxpayer, provided (1) the taxpayer's filing status is any filing status except married filing separately, (2) no other person is claiming an exemption for the taxpayer on such other person's return, (3) the taxpayer is legally obligated to pay interest on a qualified student loan, (4) the taxpayer paid interest on a qualified student loan, and (5) the taxpayer's modified adjusted gross income is less than eighty thousand dollars or less than one hundred sixty thousand dollars for taxpayers filing a joint return.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
January 1, 2017, and applicable to taxable years commencing on or after January 1, 2017 |
12-701(a)(20)(B) |
Sec. 2 |
January 1, 2017, and applicable to taxable years commencing on or after January 1, 2017 |
New section |
Statement of Purpose:
To establish a deduction under the personal income tax for the amount of student loan interest paid.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]
REP. KLARIDES, 114th Dist.; REP. CANDELORA, 86th Dist. REP. HOYDICK, 120th Dist.; REP. MINER, 66th Dist. REP. O'NEILL, 69th Dist. |