PRIOR PRINTER'S NOS. 2234, 2417

PRINTER'S NO. 2749

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1745

Session of

2023

INTRODUCED BY FRIEL, MARCELL, HILL-EVANS, T. DAVIS, McNEILL,

BRENNAN, MADDEN, HANBIDGE, ROZZI, SANCHEZ, WEBSTER, GUENST,

PROBST, KAZEEM, SHUSTERMAN, OTTEN, BOROWSKI, DALEY, TAKAC,

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in personal income tax, further providing for

classes of income; and providing for 529 savings account

employer contribution tax credit.

(a.7) The following apply:

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(2) (i) The following shall not be subject to tax under

this article:

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(E) Any amount received by an employe through an employer's

contribution to an account owned by an employe who has entered

into a Tuition Account Program Contract under the act of April

3, 1992 (P.L.28, No.11), known as the "Tuition Account Programs

and College Savings Bond Act ." AS DEFINED UNDER ARTICLE XIX-J OR

CONTRIBUTION TAX CREDIT

Section 1901-J. Scope of article.

This article relates to the 529 savings account employer

contribution tax credit program.

Section 1902-J. Definitions.

The following words and phrases when used in this article

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"ABLE ACCOUNT." AN ACCOUNT UNDER THE ACT OF APRIL 18, 2016

(P.L.128, NO.17), KNOWN AS THE PENNSYLVANIA ABLE ACT.

contract OR AN ABLE ACCOUNT CONTRACT, OR A TUITION ACCOUNT

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PROGRAM CONTRACT OR AN ABLE ACCOUNT PROGRAM administered by

another state, notwithstanding the named beneficiary of the

account.

"Contribution." A deposit of money into an employee-owned

account during the tax year.

"Department." The Treasury Department of the Commonwealth.

" Pass-through entity. " Any of the following:

(3) An unincorporated entity subject to section 307.21.

" State tax liability. " Any of the taxes due under Article

III, IV, VII, VIII, IX, XV or XX or a tax under Article XVI of

302 of the Tuition Account Programs and College Savings Bond

Act.

Section 1903-J. Credit for employer contributions to tuition

savings accounts AND ABLE ACCOUNTS .

(a) Tax credit.--For taxable years beginning after December

31, 2023, and ending before January 1, 2029, an employer that

makes a contribution to an account owned by an employee under

the Tuition Account Guaranteed Savings Program or Tuition

Account Investment Program THIS ARTICLE OR AN ABLE ACCOUNT may

claim a tax credit against the employer's State tax liability.

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under subsection (a) shall be equal to 25% of the employer's

aggregate contributions made to accounts owned by employees

during the tax year.

(c) Contribution limit for employers.--The total amount of

contributions that an employer may make to accounts owned by

employees shall be no more than $500 per employee during the tax

year.

accounts under this article at the time of filing the employer's

tax return.

Section 1904-J. Carryover, carryback , assignment and pass-

during those tax years. The following shall apply:

(1) A tax credit that is carried over to succeeding tax

years must be applied first to the earliest tax year

possible.

(2) Any credit remaining after three tax years following

the initial approval of a tax credit under this article shall

not be refunded or credited to the employer.

under this article.

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(c) Pass-through entity.--If an employer is a pass-through

entity and has an unused tax credit under section 1903-J, the

employer may elect in writing, according to procedures

established by the Department of Revenue, to transfer all or a

portion of the credit to shareholders, members or partners in

proportion to the share of the entity's distributive income to

which the shareholder, member or partner is entitled. The

(i) the pass-through entity; and

(ii) a shareholder, member or patron of the pass-

through entity.

Section 1905-J. Departmental duties.

(a) Guidelines.--The department shall publish guidelines and

may promulgate regulations necessary for the implementation and

administration of this article.

(b) Verification of contributions.--The department shall

provide the Department of Revenue with information necessary to

verify that an employer applying for a tax credit under this

article has made contributions to employees' accounts and the

aggregate amount of contributions made.

Section 1906-J. Nondiscrimination in contributions.

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account shall have equal opportunity to receive a contribution

from the employer.

(b) Duty of employers.--If an employer chooses to make

contributions to employee-owned accounts for the purposes of

claiming the tax credit, the employer shall make equal

contributions during the tax year to any employee that either

owns an account or chooses to open an account while employed by

during any tax year. An employee who opts out of a contribution

benefit from the employer during one tax year may elect to

receive the contribution benefit during another succeeding tax

(b) Information required.--The report required under

subsection (a) shall include the following information:

(1) The number of tax credits approved under this

article.

(2) The amount of tax credits approved under this

article.

(3) The number of tax credits denied and the reason for

denial.

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