Bill Text: HI SB2544 | 2018 | Regular Session | Amended

---

Bill Title: Relating To Taxation.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2018-02-02 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [SB2544 Detail]

Download: Hawaii-2018-SB2544-Amended.html

---

THE SENATE	S.B. NO.	2544
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§235-    College savings program tax credit.  (a)  There shall be allowed to each taxpayer subject to the tax imposed under this chapter, a college savings program tax credit equal to the amount determined under subsections (b), (c), and (d), that shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.  The tax credit shall apply to any contribution made by the taxpayer on or after January 1, 2018, to the account of a designated beneficiary in the college savings program under chapter 256; provided that the credit shall apply to rollover distributions from college savings programs in other states.

     (b)  For taxpayers filing jointly or as a surviving spouse, the tax credit shall be equal to, for each designated beneficiary on whose behalf a contribution is made, ten per cent of the first $5,000 contributed during the taxable year.

     (c)  For taxpayers filing a single return or a married person filing separately, the tax credit shall be equal to, for each designated beneficiary on whose behalf a contribution is made, ten per cent of the first $2,500 contributed during the taxable year.

     (d)  For taxpayers filing as head of household, the tax credit shall be equal to, for each designated beneficiary on whose behalf a contribution is made, ten per cent of the first $3,750 contributed during the taxable year.

     (e)  The amount of the tax credit taken shall not exceed $500 for contributions made on behalf of each designated beneficiary during each taxable year.

     (f)  No tax credit shall be allowed under this section for any contribution made on behalf of any designated beneficiary when the value of the beneficiary's account at the time of the contribution equals or exceeds the maximum investment level referred to under section 256-4(l).

     (g)  The tax imposed by this chapter for the taxable year shall be increased by an amount equal to the tax credit allowed under subsection (a) for that taxable year and all prior taxable years for contributions made by the taxpayer to a college savings program account when:

     (1)  The taxpayer cancels the tuition savings agreement under chapter 256; or

     (2)  The taxpayer makes a nonqualified withdrawal as defined in section 256-1.

     (h)  The director of taxation shall prepare such forms as may be necessary to claim a credit under this section, may require proof of the claim for the tax credit, and may adopt rules pursuant to chapter 91 to effectuate this section.

     (i)  Claims for the tax credit under this section, including any amended claims thereof, shall be filed on or before the end of the twelfth month following the taxable year for which the credit may be claimed.  Failure to properly and timely claim the credit shall constitute a waiver of the right to claim the credit.

     (j)  If the tax credit under this section exceeds the taxpayer's income tax liability, the excess of credit over liability may be used as a credit against the taxpayer's income tax liability in subsequent years until exhausted.

     (k)  For purposes of this section, the term "designated beneficiary" shall have the same meaning as in section 256-1."

     SECTION 2.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2017.

 

 

 

Report Title:

Taxation; College Savings Program Tax Credit

 

Description:

Establishes a college savings program income tax credit.  Applies to taxable years after 12/31/2017.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.