Pressing question for CT: A state tax break for private school tuition?

Jan 16, 2018 by

By Jacqueline Rabe Thomas –

The federal tax overhaul may have triggered an automatic state tax break that would allow parents to avoid paying state taxes on some of the money they put aside to send their children to private K-12 schools.

The new tax break would be an expansion of the tax break provided when parents save for college.


CT Catholic Conference

Students at St. John Paul II School, a Catholic school in Middletown

 

 

 

 

 

 

 

 

 

 

 

The state currently allows parents to avoid paying state income taxes on up to $10,000 each year that they put into a college savings account. In addition they do not have to pay taxes on the money when it is withdrawn to pay for college. These accounts, known as 529s, also are eligible for a less generous federal tax benefit. Parents and relatives can put after-tax money into these accounts and earn investment returns tax free.

The new federal tax law now allows parents to use the existing program to help pay for private K-12 tuition.

State Treasurer Denise Nappier’s office is working to determine whether the federal change means an automatic expansion of the state break for those who want to use these accounts for K-12 tuition, or whether that would require the legislature to change state law. Her office – which oversees the Connecticut 529 program, known as CHET – declined to estimate when it might have an answer.

The governor’s budget and policy office also said it is possible the federal change could trigger an automatic extension of the tax break.

 

Source: Pressing question for CT: A state tax break for private school tuition? | The CT Mirror

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