Minnesota introduces tax credits for 529 plan contributions and stillborn children

House Bill 3115, introduced in the Maine State Legislature on April 3, 2025, aims to provide significant tax relief for families and individuals through two key provisions: a 529 Plan Credit and a Credit for Parents of Stillborn Children.

The 529 Plan Credit allows Maine residents to claim a tax credit of up to $500, equal to 50% of contributions made to qualified 529 education savings accounts. This credit is designed to encourage families to save for education expenses, with income thresholds that phase out the benefit for higher earners. For individual filers, the credit begins to decrease for those with adjusted gross incomes over $78,340, while married couples face a more gradual reduction based on their combined income.

In a poignant addition, the bill also introduces a $2,000 tax credit for parents who experience a stillbirth, providing financial support during an incredibly difficult time. This credit is available only in the year of the stillbirth and is refundable, meaning that if the credit exceeds the taxpayer's liability, the state will issue a refund.

Debate surrounding House Bill 3115 has focused on its potential economic impact and the emotional weight of the stillbirth provision. Advocates argue that the 529 Plan Credit will incentivize education savings, while the stillbirth credit addresses a critical gap in support for grieving families. Critics, however, express concerns about the fiscal implications of these credits on the state budget, particularly the refundable nature of the stillbirth credit.

As the bill progresses through the legislative process, its implications could resonate deeply within Maine communities, potentially easing financial burdens for families and fostering a culture of saving for education. The outcome of this bill could set a precedent for future tax legislation aimed at supporting families in Maine.