An Act Increasing The Amount Of The Personal Income Tax Deduction For Contributions To State-established 529 Qualified State Tuition Programs.
Summary
HB 5145 would amend Connecticut’s income tax deduction for contributions to state-established 529 qualified tuition programs. Under current law, individual taxpayers may deduct up to $5,000 in contributions and joint filers may deduct up to $10,000; this bill would double those limits to $10,000 for individual filers and $20,000 for joint filers. The proposal is narrowly focused on encouraging greater use of Connecticut-sponsored college savings accounts.
By increasing the deduction cap in section 12-701a of the general statutes, the bill would reduce taxable income for eligible taxpayers who contribute more to a state 529 plan. The practical effect would be to provide a larger state income tax benefit for families saving for higher education expenses, while potentially reducing state income tax revenue associated with those deductions.
Impact
The bill would amend section 12-701a of the Connecticut General Statutes to expand the personal income tax deduction available for contributions to state-established 529 qualified tuition programs. It would not create a new program, but would increase the existing deduction limits for both single and joint filers, thereby affecting taxpayers who contribute to Connecticut’s state-sponsored college savings plans and reducing taxable income for those eligible contributors.
Sentiment
No committee transcript or vote record was provided, so there is no recorded debate or roll-call history to gauge formal sentiment. Based on the bill text alone, the measure appears supportive of families saving for education and is framed as a tax incentive rather than a broader tax change. The proposal’s purpose suggests a generally favorable policy intent toward college savings.
Contention
Because no discussion transcripts or votes are available, no specific points of contention are documented. Potential areas of debate, if the bill were considered, would likely involve the revenue cost of increasing the deduction versus the benefit of encouraging higher contributions to 529 plans, as well as whether the tax break would primarily advantage higher-income households that can afford larger contributions.