Committee hears testimony on bill to let Michigan taxpayers claim state deduction for out-of-state 529 and ABLE accounts

The Michigan House Committee on Finance heard testimony Sept. 9 on House Bill 4747, a proposal to let Michigan taxpayers claim the state income tax deduction for contributions to 529 college-savings plans and ABLE accounts even when those accounts are domiciled in other states.

Proponents told the committee the change would remove a state-level disincentive for families and people with disabilities who choose out-of-state 529 or ABLE plans and would encourage savings for education, health and disability-related expenses.

A sponsoring representative summarized the bill to the committee, saying states that allow the deduction regardless of account domicile “get more of what they subsidize,” and that Michigan should not penalize families who select an out-of-state plan. The representative said 529…