Bill Text: NY S04827 | 2015-2016 | 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: (Engrossed - Dead) 2016-06-07 - referred to ways and means [S04827 Detail]

Download: New_York-2015-S04827-Introduced.html

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                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         4827
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                    April 20, 2015
                                      ___________
       Introduced  by  Sen. VALESKY -- read twice and ordered printed, and when
         printed to be committed to the Committee on Investigations and Govern-
         ment Operations
       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    S 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.
                                                                  LBD10306-02-5
       S. 4827                             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    S 3. This act shall take effect immediately and shall apply to taxable
   18  years commencing on or after January 1, 2014.