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Bill > HB402

NH HB402

Relative to liability as taxable income of education freedom account payments.

summary

Introduced
01/10/2025
In Committee
02/26/2025
Crossed Over
Passed
Dead

Introduced Session

2025 Regular Session

Bill Summary

This bill: I. Repeals the statement that education freedom account funds shall not constitute taxable income to the parent of the education freedom account student. II. Requires the timely delivery of IRS 1099 forms to parties responsible for tax liabilities incurred from payments made from a education freedom account.

AI Summary

This bill modifies existing law regarding Education Freedom Accounts (EFAs), which are a type of school choice program that provides funding for students to attend private or alternative schools. Specifically, the bill repeals a previous provision that declared EFA funds were not taxable income for parents, effectively making these funds potentially subject to taxation. Additionally, the bill requires scholarship organizations managing EFAs to produce and deliver IRS Form 1099 to parties who may have tax liabilities resulting from EFA payments. This means that parents receiving EFA funds will now need to report these funds as potential taxable income and will receive official documentation (Form 1099) to help them comply with federal tax reporting requirements. The changes will take effect 60 days after the bill's passage, giving affected parties time to prepare for the new tax implications of EFA funds.

Committee Categories

Budget and Finance

Sponsors (3)

Last Action

Lay HB402 on Table (Rep. Sweeney): Motion Adopted DV 202-149 03/27/2025 House Journal 11 P. 101 (on 03/27/2025)

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