Posted: | March 6, 2017 10:24 AM |
---|---|
From: | Representative Brett R. Miller |
To: | All House members |
Subject: | PIT Deduction Only For Pennsylvania’s PA 529 Contributions |
In the near future, I will be introducing legislation that will amend the Tax Reform Code of 1971 to limit personal income tax deductibility for contributions made to a federally qualified tuition program to only Pennsylvania’s PA 529 College Savings Program. My bill limits the personal income tax deductibility for contributions made only to Pennsylvania’s PA 529 College Savings Program, but not to out-of-state programs. Under existing law, contributions to any state’s 529 program are deductible from Pennsylvania’s personal income tax. We are one of six states that permit a personal income tax deduction for participating in non-home-state 529 programs. In 2015, $739 million worth of in-state and out-of-state 529 investments were claimed as deductions to 529 Savings Programs by PA residents. When you subtract the amounts contributed to investments only in PA 529 programs, ($449 million) it leaves $289 million that would be taxable at the rate of 3.07%. If the in-state to out-of-state investments continued at the same ratio Pennsylvania’s Treasury would then see a benefit of approximately $8.9 million. Furthermore, having a larger PA 529 fund balance would provide the benefits of scale when the Bureau negotiates contracts with firms who provide record-keeping and fund management services. These lower fees will result in higher returns for Pennsylvania’s educational investors. I hope you will join me in sponsoring this important legislation. If you have any questions, please contact me at 717-705-7161. |
Introduced as HB1385