STATEHOUSE (Feb. 24, 2022) – State Rep. Dave Heine's (R-Fort Wayne) legislation helping families save for college could soon be law after receiving unanimous support in the Senate.
Currently, Indiana taxpayers can get a state income tax credit equal to 20% of their contributions to a CollegeChoice 529 Direct Savings Plan, up to $1,000 per year. Heine, Chairman of Local Government and Finance subcommittee and a member of the House Ways and Means Committee, said his bill would increase the credit from $1,000 to $1,500 per year.
"Parents understand what a difficult financial road paying for college can be," Heine said. "We want to help incentivize savings plans, which can make all the difference for students who want to continue their education."
According to Heine, CollegeChoice 529 plans, also known as a qualified tuition programs, provide families with flexibility and choice when it comes to saving money for education. Savings can be used at any eligible 2- and 4-year college, both in- and out-of-state, graduate school, vocational/technical school and K-12 tuition-related expenses.
Heine said accounts grow tax-deferred and distributions are tax-free as long as the money is withdrawn to pay for qualified education expenses like tuition, books, computers, equipment and fees. More than 400,000 Hoosiers already take advantage of this opportunity, and accounts can be opened with as little as $10 a month. For more information about this program and to open an account, Hoosiers can visit www.collegechoicedirect.com.
House Enrolled Act 1045 now heads to the governor for consideration as a new law. If signed, the tax credit modification would take effect in tax year 2023. Visit iga.in.gov for more information.
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State Rep. Dave Heine (R-Fort Wayne) represents House
District 85, which includes a portion of Allen County.
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PHOTO CAPTION: State Rep. Dave Heine (R-Fort Wayne) testifies in committee on the benefits of increasing the state income tax credit on 529 plans Tuesday, Feb. 15, 2022, at the Indiana Statehouse. Heine's legislation is headed to the governor where it could soon be law.
