FISCAL NOTE
Date Requested: February 24, 2021
Time Requested: 01:46 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2831 |
Introduced |
HB2723 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
General Revenue Fund
Sources of Revenue:
General Fund
Legislation creates:
Decreases Existing Revenue, Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to provide a deduction for interest paid on qualified education loans to the extent such amount is not allowable as a deduction when aiming at a taxpayer’s federal adjusted gross income.
The proposed decreasing modification for student loan interest is allowed only to the extent the amount is not taken as a deduction when arriving at the taxpayer’s federal adjusted gross income for taxable years beginning after December 31, 2020. The annual cost of the current above-the-line student loan deduction is roughly $2.8 million. We are unable to accurately determine the additional revenue loss from the proposed bill. However, the additional revenue loss will be significantly lower than the amount lost through the above-the-line deduction due to a smaller number of taxpayers qualifying for the modification relative to the number qualifying for the current deduction.
Additional administrative costs would be $30,000 in FY2022 and $20,000 in subsequent fiscal years.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2021
Increase/Decrease
(use"-") |
2022
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
30,000 |
20,000 |
| Personal Services |
0 |
20,000 |
20,000 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
10,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
The proposed decreasing modification for student loan interest is allowed only to the extent the amount is not taken as a deduction when arriving at the taxpayer’s federal adjusted gross income for taxable years beginning after December 31, 2020. The annual cost of the current above-the-line student loan deduction is roughly $2.8 million. Currently, student loan interest up to $2,500 per taxpayer can be taken as both a federal deduction and an above-the-line State deduction by taxpayers whose income is less than $85,000 ($170,000 for joint taxpayers).We are unable to accurately determine the additional revenue loss from the proposed bill.
Additional administrative costs would be $30,000 in FY2022 and $20,000 in subsequent fiscal years.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov