Creating a new graduate nonresident tuition tax credit available against the individual income tax, and including retroactive applicability provisions

This bill creates a new graduate nonresident tuition tax credit available against the individual income tax. The bill defines “institution” to mean an institution of higher education governed by the board of regents. The bill defines “new graduate” to mean an individual who is a graduate of an institution within three years of claiming the credit, who has been a resident of and employed in this state since graduating, and who is employed as a health care professional, teacher, licensed veterinarian, or professional engineer in this state. The bill specifies that a new graduate may claim the new graduate nonresident tuition tax credit that is equal to 100 percent of the difference between the base tuition paid by the new graduate as a nonresident student enrolled at an institution and the base tuition amount paid by a resident student at the same institution for the same school year during the years of attendance by the new graduate. The bill requires the board of regents to post on the board of regents’ internet site the base tuition amounts for nonresident and resident students at each institution from at least the previous 10-year period. Any new graduate nonresident tax credit in excess of the tax liability is not refundable. The bill specifies any credit in excess of the tax liability for the tax year may be credited to the tax liability for the following five tax years or until depleted, whichever is the earlier. However, any credit in excess of tax liability shall not be credited to or deplete future tax liability on the return of a new graduate who becomes a nonresident. The bill applies retroactively to tax years beginning on or after January 1, 2026.