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House Co-Sponsorship Memoranda
House of Representatives
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | April 9, 2024 03:46 PM |
|---|---|
| From: | Representative Stephenie Scialabba |
| To: | All House members |
| Subject: | Exempting All 529 Plans From Inheritance Tax |
| In the near future, I plan to introduce legislation that will expand our current exemption from the state Inheritance Tax for Tuition Account Programs (529 plans) to include plans that are established by the Pennsylvania Treasury and those established by other states. As I am sure you will all attest, 529 Plans are becoming essential for Pennsylvania families who are saving for their children’s future. Not only do these plans offer families a vehicle in which to save, but many also offer significant tax benefits for contributions and withdrawals as well. In the Commonwealth, a provision of the Pennsylvania’s Tuition Account Programs and College Savings Bond Act of 1992, commonly known as the TAP Act which governs our state plan, provides an exemption from the Inheritance Tax for 529 plans that are established though the Pennsylvania Treasury. A court in Allegheny County ruled that this unconstitutionally discriminated against those who use an out-of-state 529 plan to save for their children’s or grandchildren’s education. While the 529 plans provided by the Pennsylvania Treasury are among the best in the nation, some families have chosen to use alternatives. For these reasons, my legislation will provide the express exemption from our state Inheritance Tax for all 529 Plans, both in-state and out-of-state plans, which would be similar to the action taken by the General Assembly to exclude these 529 plans from personal income tax. I respectfully ask for your consideration to join me in this effort. |
Introduced as HB2204