SB 435 — AN ACT ESTABLISHING A TAX CREDIT FOR EMPLOYERS MAKING EDUCATION LOAN PAYMENTS FOR EMPLOYEES.

General Assembly ProposedCommittee Bill No.

29154548 Referred to Committee on HIGHER EDUCATION AND EMPLOYMENT ADVANCEMENT Introduced by:

(HED) AN ACT ESTABLISHING A TAX CREDIT FOR EMPLOYERS MAKING EDUCATION LOAN PAYMENTS FOR EMPLOYEES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1.

(NEW) (Effective January 1, 2020, and applicable to taxable years commencing on or after January 1, 2020) (a) As used in this section:

(1) "Qualified employee" means an employee who (A) is required to work at least thirty-five hours per week, (B) is a resident of the state, and (C) is not an owner, member or partner of a qualified employer or a family member of an owner, member or partner of a qualified employer;

(2) "Qualified employer" means a corporation licensed to operate a business in the state that employs a qualified employee and is subject to tax under chapter 207 or 208 of the general statutes;

and (3) "Eligible education loan" means a loan made by the Connecticut Higher Education Supplemental Loan Authority or by any other private or governmental lender to a qualified employee to finance attendance at a private occupational school or an institution of higher LCO No.

4548 1 of 3 Committee Bill No.435 education in the state.

"Eligible education loan" does not include a refinanced or consolidated loan, unless the refinanced or consolidated loan is made by the Connecticut Higher Education Supplemental Loan Authority.

(b) (1) Commencing January 1, 2020, and in each taxable year thereafter any qualified employer that employs a qualified employee and makes loan payments directly to a lender or lenders on an eligible education loan may claim a credit against the tax imposed under chapter 207 or 208 of the general statutes.

Such credit shall be equal to fifty per cent of the amount of the actual monthly loan payment made by such employer on the eligible education loan, multiplied by the number of months during the taxable year such employer made loan payments on behalf of the qualified employee during the term of employment.

No qualified employer may claim a credit against the tax imposed under chapters 207 and 208 of the general statutes for the same loan payment amount.

(2) A qualified employer may claim a credit under this subsection for loan payments actually made to a relevant lender or lenders only with respect to (A) eligible education loans, and (B) loan payment amounts paid by the qualified employer during that part of the taxable year that the qualified employee worked and resided in the state, provided a qualified employee who worked and resided in the state for any part of a month shall be deemed to have worked in the state for the entire month.

(3) A qualified employer may not claim the credit under this subsection (A) with respect to months of the taxable year during which the employee was not a qualified employee, (B) for any loan payments in excess of the amounts due during the taxable year, or (C) for more than three years with respect to any specific qualified employee.

(c) A qualified employer that claims the credit under subsection (b) of this section shall provide any documentation required by the Commissioner of Revenue Services in a form and manner prescribed LCO No.

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435 by the commissioner.

This act shall take effect as follows and shall amend the following sections:

Section 1 January 1, 2020, and New section applicable to taxable years commencing on or after January 1, 2020 Statement of Purpose:

To provide a tax credit for employers that make education loan payments for employees.

[Proposed deletions are enclosed in brackets.

Proposed additions are indicated by underline, not underlined.] the entire text of a bill or resolution or a section of a bill or resolution is new, it is Co-Sponsors:

LOONEY, 11th Dist.Dist.;

BRADLEY, 23rd Dist.

SEN.

KUSHNER,CASSANO, 24th4th Dist.Dist.;

CASSANO,COHEN, 4th12th Dist.

HASKELL,ABRAMS, 26th13th Dist.Dist.;

COHEN,MARONEY, 12th14th Dist.

LEONE,OSTEN, 27th19th Dist.Dist.;

ABRAMS,MOORE, 13th22nd Dist.

FLEXER,BRADLEY, 29th23rd Dist.Dist.;

MARONEY,KUSHNER, 14th24th Dist.

NEEDLEMAN,HASKELL, 33rd26th Dist.Dist.;

OSTEN,LEONE, 19th27th Dist.

BERGSTEIN,FLEXER, 36th29th Dist.Dist.;

MOORE,NEEDLEMAN, 22nd33rd Dist.

ANSEN. ACT PROVIDING A TAX CREDIT TO BUSINESSES THAT PROVIDE EMPLOYEES WITH STUDENT LOAN REPAYMENT ASSISTANCE.