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HB 1150

529 college savings distributions.

2025 Regular Session Introduced by Ed DeLaney and 3 co-sponsors

HB 1150 modifies Indiana 529 college savings plan distribution rules, likely expanding penalty-free withdrawals or qualifying expenses to increase education savings accessibility.

First reading: referred to Committee on Ways and Means
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Bill Summary · HB 1150

Legislative bill overview

HB 1150 appears to modify the tax treatment or distribution rules for 529 college savings plans in Indiana. Based on the bill's title and recent action history (currently in the Ways and Means Committee), it likely addresses how withdrawals from these state-sponsored education savings accounts are taxed or what expenses qualify for penalty-free distributions.

Why is this important

529 plans are a primary vehicle for families saving for higher education costs, offering tax advantages. Changes to distribution rules directly affect whether middle-class families can access their savings for various education-related expenses without tax penalties, influencing college affordability and savings incentives across Indiana.

Potential points of contention

  • Scope of qualified expenses: Disagreement may exist over which education expenses should qualify for penalty-free withdrawals (e.g., K-12 tuition, apprenticeships, student loan repayment, room and board)
  • State revenue impact: Expanding distributions or reducing tax penalties could decrease state tax collections, creating fiscal concerns
  • Equity considerations: Changes may disproportionately benefit higher-income families who more frequently use 529 plans, raising fairness questions about tax policy design

Compiled from official sources — confirm details with the bill’s official record.

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