In 2017 Congress passed the Tax Cuts and Jobs Act, which now allows parents to use 529 college savings accounts to pay for K-12 tuition at private schools. Some states, including Colorado, allow taxpayers to claim state income tax deductions for contributions to 529 accounts.

Although the Tax Cuts and Jobs Act allows 529 account holders to use funds for K-12 tuition; federal law does not fully parallel Colorado’s state statute governing 529 account withdrawals and deductions. Colorado law only allows withdrawals for very specific purposes, and these purposes do not include K-12 tuition. Because of this discrepancy, taxpayers who make withdrawals to cover K-12 tuition costs risk losing their state income tax deduction for contributions to their children’s 529 accounts.

Senate Bill 19-257 would explicitly forbid state income tax deductions for 529 contributions intended for K-12 tuition. It would also put into law that K-12 tuition does not constitute a qualified withdrawal of 529 funds. Under this bill, people could be subjected to tax penalties for using 529 accounts to pay tuition.  THE COLORADO CATHOLIC CONFERENCE OPPOSES Senate Bill 19-257

SB 19 257 will be heard in Senate Finance on Thursday, April 25th Upon Adjournment in Room 357

Please contact the Senate Finance Committee and your State Senator and ask them to OPPOSE SB19-257

 Senate Finance Committee

To Find Your State Senator

To Read SB 19 257