Bill > SB529

This bill provides a new tax deduction for California taxpayers who contribute to the state's 529 college savings plan (called the California Scholarshare program) beginning in 2026. Qualified taxpayers can deduct up to $10,000 for married couples filing jointly or head of household filers, and up to $5,000 for individual filers, with income limits of $150,000 for joint/head of household filers and $75,000 for individual filers. The deduction is designed to incentivize families to save for college expenses and reduce student loan debt. If funds are withdrawn for purposes other than qualified higher education expenses, the taxpayer will need to add back the previously claimed deduction to their gross income. The bill requires the Scholarshare Investment Board to collect and report data on the deduction's usage, including the number of new accounts opened, total deduction amounts, and survey information about account owners' motivations. The legislation aims to encourage more Californians to save for higher education by providing a state tax benefit, with the broader goals of reducing student loan debt and potentially stimulating economic activity by helping individuals have more financial flexibility after graduation.

Budget and Finance

https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=202520260SB529