Bill > HB707

This bill establishes a state income tax deduction for contributions to two specific savings programs: Hawaii's 529 college savings accounts and Hawaii's ABLE (Achieving a Better Life Experience) savings accounts for individuals with disabilities. The bill allows single filers and married individuals filing separately to deduct up to $5,000 per year, while married individuals filing jointly, heads of households, and surviving spouses can deduct up to $10,000 annually. The legislation also conforms to federal changes that allow 529 plan benefits to be used for K-12 educational expenses, expanding the scope of these accounts beyond traditional higher education costs. Contributions will only be eligible for deduction in the year they are made, and withdrawals used for non-qualified expenses will be subject to tax recapture and penalties. The bill aims to promote financial security and educational opportunities by providing tax incentives for families saving for education, whether for college or K-12 schooling, and for supporting individuals with disabilities. The tax deduction and expanded use of 529 accounts will take effect for taxable years beginning after December 31, 2024.

Budget and Finance, Education

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=707&year=2026