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SB20-073

No 529 Account Income Tax Deduction for K-12 Expenses

Concerning amendments to the state income tax deduction for contributions to a qualified 529 account to ensure that the state income tax deduction is not aligned with the changes in the federal "Tax Cuts and Jobs Act" of 2017 that allow tax-free distributions for elementary and secondary school expenses, and, in connection therewith, making an appropriation.
Session:
2020 Regular Session
Subject:
Fiscal Policy & Taxes
Bill Summary

The federal "Tax Cuts and Jobs Act", which became law in December 2017, added distributions for elementary or secondary school expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school as qualified distributions from a qualified state tuition program, also known as a 529 account, thereby allowing, on the federal level, income tax-free distributions for elementary and secondary school such expenses in addition to already authorized income tax-free distributions for higher education expenses.

The bill amends Colorado law to ensure that a taxpayer may not claim a deduction for contributions to qualified state tuition programs for elementary or secondary school expenses for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school and clarifies that such expenses are not qualified distributions.

The bill includes an appropriation to the department of revenue for $11,040 from the general fund.

(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)


(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

Status

Introduced
Under Consideration

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Bill Text

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