Tax incentive for college savings rejected by Senate

Federal government and 34 other states offer similar incentives

Source: MGNOnline

BOSTON (WWLP) – The price of a college tuition is on the rise, but the state Senate has just rejected a proposal to offer families some relief.

The Senate voted against a proposal that would have created a tax break for families that contribute to 529 college savings plans. A 529 plan is designed to encourage families to save-up for college.

The federal government and 34 states offer tax benefits for those who contribute to the college savings plan, but not so in Massachusetts. During Tuesday’s budget debate, an effort to create such a tax break was shot down. Some senators argued that it is mostly the wealthy who take advantage of 529 plans, and said that the state would lose millions in revenue as a result.

Many Massachusetts families struggle to send their children to college. 22News asked Governor Charlie Baker where he stands on a college savings tax credit.

“I think that’s an interesting idea. It’s not one that we filed as a part of our budget, but it’s certainly something we’d be willing to consider,” Baker said.

Massachusetts and New Hampshire are the only New England states that do not offer tax incentives for college savings.

Comments are closed.