HB 240

Abstract

Income tax; contributions to Virginia College Savings Plan accounts; report. Increases the maximum individual income tax deduction for amounts paid or contributed to a prepaid tuition contract or college savings trust account entered into with the Virginia College Savings Plan from $4,000 to $7,500 in taxable year 2024, $11,000 in taxable year 2025, and $15,000 for taxable year 2026 and thereafter. Such amount shall be adjusted for changes in the Consumer Price Index for All Urban Consumers (C-CPI-U) beginning in taxable year 2024. The deduction is limited to $4,000 for taxpayers with federal adjusted gross income that is greater than $100,000 for an individual or $200,000 for married persons filing a joint return. The bill also creates an individual or corporate deduction, as applicable, of up to $4,000 for the amount a child day center or child day program paid or contributed to a customer's or client's prepaid tuition contract or college savings trust account entered into with the Virginia College Savings Plan. The bill also provides a nonrefundable income tax credit for taxable years 2024 through 2028 for 35 percent of expenses incurred by a business during the taxable year for contributions into a Virginia College Savings Plan account owned by an employee of the business. If the employee receiving the contribution is a qualified employee, as defined in the bill, the bill specifies that the credit shall not exceed $500 annually for each such employee. If the employee receiving the contribution is a qualified employee who is not highly compensated, as defined in the bill, the bill specifies that the credit shall not exceed $1,000 annually for each such employee. The bill provides that the total amount of tax credits available for a calendar year shall not exceed $5 million and that any unused tax credit may be carried over for five years.

A BILL to amend and reenact §§ 58.1-322.03, as it is currently effective and as it may become effective, and 58.1-402 of the Code of Virginia and to amend the Code of Virginia by adding in Article 13 of Chapter 3 of Title 58.1 a section numbered 58.1-439.12:13, relating to income tax; contributions to Virginia College Savings Plan accounts; report. 24101386D