Bill Text: NY A00059 | 2017-2018 | General Assembly | Introduced

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Bill Title: Relates to lump sum distributions used for the payment of post-secondary education loans; provides an exemption from the imposition of a separate tax.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2018-06-25 - enacting clause stricken [A00059 Detail]

Download: New_York-2017-A00059-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                           59
                               2017-2018 Regular Sessions
                   IN ASSEMBLY
                                       (Prefiled)
                                     January 4, 2017
                                       ___________
        Introduced by M. of A. PAULIN -- read once and referred to the Committee
          on Ways and Means
        AN  ACT to amend the tax law, in relation to lump sum distributions used
          for the payment of post-secondary education loans
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section  1.  Section  603  of  the  tax law is amended by adding a new
     2  subsection (c) to read as follows:
     3    (c) Exemption. Lump sum distributions, as taxed  under  this  section,
     4  used  for  payments  to  an institution receiving any scheduled periodic
     5  payments from a borrower pursuant to the  terms  of  any  post-secondary
     6  education  loan,  and  making the payments of principal and interest and
     7  other amounts with respect to the amounts received from the borrower  as
     8  may  be  required  pursuant to the terms of the post-secondary education
     9  loan or of the contract governing the servicing;  or,  during  a  period
    10  when payment on a post-secondary education loan is deferred, maintaining
    11  account records for the loan and communicating with the borrower regard-
    12  ing the loan, on behalf of the loan's holder shall not be subject to the
    13  separate tax imposed in subsection (a) of this section.
    14    § 2. Subsection (c) of section 612 of the tax law is amended by adding
    15  a new paragraph 3-d to read as follows:
    16    (3-d) Pensions and annuities received by an individual of any age, not
    17  otherwise  excluded  pursuant  to paragraph three of this subsection, to
    18  the extent includible in gross income for federal  tax  purposes,  which
    19  arise  (i)  from an employer-employee relationship or (ii) from contrib-
    20  utions to a retirement plan which are deductible for federal income  tax
    21  purposes  which  are  used  for payments to an institution receiving any
    22  scheduled periodic payments from a borrower pursuant to the terms of any
    23  post-secondary education loan, and making the payments of principal  and
    24  interest and other amounts with respect to the amounts received from the
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06349-01-7
        A. 59                               2
     1  borrower as may be required pursuant to the terms  of the post-secondary
     2  education  loan or of the contract governing the servicing; or, during a
     3  period when payment on a  post-secondary  education  loan  is  deferred,
     4  maintaining  account  records  for  the  loan and communicating with the
     5  borrower regarding the loan, on behalf of the  loan's  holder.  However,
     6  the  term  "pensions  and annuities" shall also include distributions of
     7  any kind, including any lump sum distributions, as defined  in  subpara-
     8  graph  (A)  of  paragraph four of subsection (e) of section four hundred
     9  two of the internal revenue code and taxed  under  section  six  hundred
    10  three  of  this  article,  received  by an individual of any age from an
    11  individual retirement account or an individual  retirement  annuity,  as
    12  defined  in section four hundred eight of the internal revenue code, and
    13  distributions received by an individual of any  age  from  self-employed
    14  individual  and  owner-employee  retirement  plans  which  qualify under
    15  section four hundred one of the internal revenue code,  whether  or  not
    16  the payments are periodic in nature.
    17    § 3. This act shall take effect immediately and shall apply to taxable
    18  years commencing on or after January 1, 2016.