Bill > H787

This bill establishes two key provisions related to the NC 529 Program (a state-sponsored education savings plan): First, it creates a matching contribution program for the Parental Savings Trust Fund, where the state will provide $100 for every $50 contributed by eligible persons, with a maximum annual match of $500 per student and a lifetime maximum of $1,500. To be eligible, contributors must be North Carolina residents with household incomes at or below 250% of the federal poverty guidelines, and the student must be a North Carolina resident aged 14 or younger. Second, the bill creates a state tax deduction for contributions to the Parental Savings Trust Fund, allowing taxpayers to deduct up to $2,000 per year ($4,000 for joint filers) from their state income taxes. If funds are withdrawn and not used for qualified education expenses, the previously claimed deduction must be added back to taxable income, unless the withdrawal is due to the beneficiary's death or permanent disability. The bill includes an appropriation of $180,000 to fund the matching program and sets the matching program and tax deduction to take effect on July 1, 2025, and January 1, 2026, respectively.

Government Affairs

https://www.ncleg.gov/BillLookUp/2025/H787