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A 1245

Provides for a personal income tax deduction for student loan payments

2025 Regular Session Introduced by Joe Angelino and 27 co-sponsors

Establishes a New York state personal income tax deduction for qualified student loan principal and/or interest payments, reducing after-tax debt cost for NY borrowers.

PRINT NUMBER 1245A
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WeVote Research Nonpartisan
Bill Summary · A 1245

Summary — A1245 (Print 1245A)

Title: Provides for a personal income tax deduction for student loan payments
Introduced: January 9, 2025 — Print No. 1245A (amended and recommitted Nov. 21, 2025)
Sponsor: Jo Anne Simon (primary); multiple cosponsors (see below)
Status: Referred to Ways and Means; amended and recommitted to Ways and Means (11/21/2025)
Companion Senate Bill: S4202

Purpose

A1245 would create a state personal income tax deduction for payments made on qualified student loans. The bill’s intent is to reduce the after‑tax cost of repaying student debt for New York taxpayers and to encourage on‑time repayment.

Key provisions (as indicated by the bill title and available summary)

  • Establishes a deduction on New York State personal income tax returns for amounts that taxpayers paid during the tax year toward qualifying student loan principal and/or interest.
  • Applies to individual taxpayers who make eligible student loan payments; details such as deduction caps, phaseouts by income, or whether the deduction is available to dependents are not specified in the summary provided.
  • Defines (or would define) which loans qualify (likely federal and certain private education loans), treatment of consolidated loans, and documentation required to claim the deduction.
  • Contains standard tax administration provisions (verification, disallowance for ineligible claims), though text is not included here.

Note: The bill text was not provided; therefore specific dollar limits, effective dates, and eligibility rules (income thresholds, loan types, limits per taxpayer or household, carryforward rules) are not available in this summary.

Who would be affected

  • Primary beneficiaries: New York residents (or state taxpayers) who make student loan payments — particularly recent graduates and households with outstanding education debt.
  • State fiscal stakeholders: Department of Taxation and Finance (administration and enforcement).
  • Broader impact: State budget/treasury via reduced personal income tax receipts; tax professionals and employers (if reporting changes are required).

Procedural history & timeline

  • Introduced Jan. 9, 2025; referred to Ways and Means.
  • Print No. 1245A issued and the bill was amended and recommitted to Ways and Means on Nov. 21, 2025.
  • Next steps: committee consideration, potential floor votes in the Assembly and companion bill action in the Senate. Any effective date will be set in the bill language (commonly the tax year following enactment unless otherwise specified).

Potential fiscal and policy impact

  • Revenue effect: Likely reduces state individual income tax revenue; the magnitude depends on deduction limits and take-up.
  • Distributional effect: Benefits borrowers who have taxable income and owe state income tax; may disproportionately help middle‑income earners who are repaying loans.
  • Policy effects: Could incentivize repayment, reduce delinquency, and provide targeted relief to debtors; interaction with federal student loan interest rules and other state tax provisions would determine net benefit.

Sponsors & Related Legislation

  • Primary: Jo Anne Simon; many cosponsors from both chambers listed in the bill header.
  • Related/prior-session bills: S7834, S4603, S2798, S5836, S2895, S4202 (companion).

Notes / Open questions

  • Specific deduction amount, loan eligibility, income phaseouts, treatment of forgiveness/cancellation, and effective date are not available from the information provided. Those details in the bill text are critical to determine the exact fiscal and distributional effects.

Compiled from official sources — confirm details with the bill’s official record.

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