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Committee hears bill to remove statutory claim that EFA payments are non‑taxable
Summary
Supporters and tax experts told the House Ways and Means Committee on HB 402 that a sentence in RSA 194‑F may mislead families about federal tax obligations for Education Freedom Account payments and recommended repealing it to avoid potential harm or lawsuits.
Representative David Luno, sponsor of House Bill 402, opened a public hearing saying the bill would repeal the sentence in RSA 194‑F:2(6) that reads, “Funds deposited in an EFA shall not constitute taxable income to the parent or the EFA student.” He told the committee the statute could mislead families about possible federal tax liabilities and that the state should not give the appearance of providing federal tax advice.
The bill matters because New Hampshire’s Education Freedom Account (EFA) program has grown beyond its original, narrowly targeted population and now covers thousands of students. Repealing the sentence would, supporters said, remove a statutory assertion about taxability that the state cannot make under federal tax law.
Tax practitioners and a tax attorney who…
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