Advocates urge Massachusetts to expand 529 deduction, citing gains in participation
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Summary
The Association of Independent Colleges and Universities in Massachusetts backed bills to raise the state 529 deduction, citing past increases in new accounts and contributions and urging alignment with larger deductions offered in other states.
The Joint Committee on Revenue heard testimony urging lawmakers to expand Massachusetts’ tax deduction for 529 college savings plans. Brad Freeman, vice president for government relations at the Association of Independent Colleges and Universities in Massachusetts (ACAM), told the committee ACAM "strongly supports" Senate Bill 2066 and House Bill 3151, which would increase the state deduction for contributions to 529 plans.
Freeman cited data from the law’s earlier implementation, saying that after the deduction was created in the 2015–16 session Massachusetts families opened more than 21,000 new 529 accounts, a 57% increase in new accounts year over year, and that overall contributions rose by roughly 25%. He said the original deduction included a five-year sunset, which was removed in the FY22 budget to make the deduction permanent, and urged the committee to align the state’s deduction levels with other states that offer larger limits.
ACAM framed the policy as targeted assistance for middle-income families who do not qualify for other aid. Freeman said the earlier policy change had a measurable effect on account openings and contributions and asked the committee to act favorably on S.2066 and H.3151. Committee members did not ask substantive questions after the testimony and the panel left the record open for written submissions.
