House Taxation Committee hears bill to raise state deduction for 529 education savings plans

The Montana House Taxation Committee held a hearing on House Bill 845, sponsored by Representative Julie Darling, which would increase the state income tax deduction for contributions to family education savings accounts (commonly known as 529 plans).

The bill would raise the dollar cap on the deduction and tie future increases to an inflation factor based on the Consumer Price Index, a change the sponsor said would avoid repeated legislative increases and make the deduction more useful as college and trade-school costs grow.

Representative Julie Darling, the bill sponsor, opened the hearing and described HB 845 as "an act increasing the income tax deduction for contributions to a family education savings account," and said the proposal mirrors a prior change used for Montana medical savings accounts so the deduction can automatically adjust with inflation. She asked…