House Bill 1024 would create a new state matching program to encourage contributions to the Parental Savings Trust Fund for qualifying students. Under the bill, the State Education Assistance Authority would match eligible contributions at a rate of $100 for every $50 contributed, up to $500 per year and $1,500 per student total. Eligibility would be limited to North Carolina residents with household income at or below 250% of the federal poverty guidelines, and the child beneficiary would have to be 14 years old or younger. The bill also appropriates $180,000 in recurring General Fund money for the 2026-2027 fiscal year to support the matching program.
In addition to the matching program, HB1024 would create a state income tax deduction for certain contributions to accounts in the Parental Savings Trust Fund. Taxpayers could deduct up to $2,000 per year, or $4,000 for married couples filing jointly, for qualifying contributions. If deducted amounts are later withdrawn and not used for qualified higher education expenses, the taxpayer would have to add those amounts back to income, subject to an exception for withdrawals made because of the beneficiary’s death or permanent disability.
The bill would amend the statutes governing the State Education Assistance Authority and North Carolina individual income tax law, specifically G.S. 116-209.25 and G.S. 105-153.5. It would expand state support for 529-style education savings by adding both a direct public match and a tax preference for contributions, while also creating new administrative responsibilities for the Authority to determine eligibility and distribute matching funds.
The available legislative record shows no committee discussion or recorded votes, so there is no documented floor or committee sentiment in the materials provided. Based on the bill text, the measure appears designed to support college savings for lower-income families and is likely to be viewed favorably by education and family-savings advocates. Potential concerns may include the cost of the recurring appropriation, the use of state funds to subsidize private savings accounts, and whether the income and age limits are the best way to target assistance.
HB1024 would amend North Carolina’s education savings and tax statutes by adding a state-funded matching program for Parental Savings Trust Fund contributions and by creating a new income tax deduction for certain contributions to that fund. It would require the State Education Assistance Authority to administer the match, establish eligibility rules, and distribute recurring General Fund appropriations, while also changing individual income tax treatment for qualifying contributions and later nonqualified withdrawals.
No committee transcripts or votes are available, so there is no recorded legislative sentiment in the provided materials. The bill’s structure suggests a generally supportive policy goal of helping families save for higher education, especially lower-income households, but it also introduces a new recurring state expenditure and tax deduction that could draw fiscal scrutiny.
The main likely points of contention are fiscal and policy-related: the $180,000 recurring appropriation, the decision to use state funds to match private education savings contributions, and the eligibility thresholds limiting the program to residents at or below 250% of federal poverty guidelines with beneficiaries age 14 or younger. Supporters would likely emphasize college-access and savings incentives, while critics may question whether the subsidy is the most efficient use of state resources or whether the program’s benefits are too narrow.