Bill > H4231

This bill, titled "Building real incentives for college savings," aims to encourage residents to save for higher education by allowing them to deduct contributions made to Massachusetts-sponsored prepaid tuition or college savings programs, often referred to as 529 plans, from their state income taxes. Specifically, individuals can deduct up to $1,000, or $2,000 for married couples filing jointly, of the amount contributed to these programs each taxable year, starting with tax years beginning on or after January 1, 2017. However, this deduction is only available to residents of Massachusetts for the entire taxable year, meaning nonresidents cannot claim it. The bill also includes provisions for recapturing the deducted amount if funds are withdrawn for reasons other than qualified higher education expenses, the beneficiary's death, disability, or receipt of a scholarship, and it mandates an annual report from the commissioner on the usage and impact of these deductions. Importantly, the deduction is set to expire after tax years beginning on or after January 1, 2022, unless reauthorized by the legislature.