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SD 1705

An Act relative to increasing 529 deductions

194th Legislature (2025-2026) Introduced by Jake Oliveira

Massachusetts bill increasing 529 college savings plan tax deductions to incentivize education savings while reducing state tax revenue.

House concurred
0
WeVote Research Nonpartisan
Bill Summary · SD 1705

Legislative bill overview

SD 1705 proposes to increase the state income tax deduction available to Massachusetts residents who contribute to 529 college savings plans. The bill aims to make saving for higher education more financially attractive by allowing taxpayers to deduct larger contributions from their state taxable income.

Why is this important

529 plans are tax-advantaged savings vehicles designed to help families afford college tuition and related expenses. Increasing the deduction makes these plans more valuable to middle and upper-income families, potentially encouraging earlier and larger education savings while reducing out-of-pocket college costs. However, this also represents foregone state tax revenue that could affect the state budget.

Potential points of contention

  • Regressive impact: Higher-income families are more likely to benefit from increased tax deductions, potentially widening equity gaps since lower-income families may lack surplus income to save in 529 plans
  • State revenue loss: Increased deductions reduce state tax collections, which could pressure other budget priorities like K-12 education funding, infrastructure, or social services
  • Scope of increase unclear: The bill's text doesn't specify the exact deduction amount increase, making it difficult to assess fiscal impact without seeing the specific proposal details

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

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