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Bill

SB 529

Personal income taxes: deduction: California qualified tuition program.

2025-2026 Regular Session Introduced by Marie Alvarado-Gil and 4 co-sponsors

Bill allows California taxpayers to deduct 529 education savings contributions from state income taxes, reducing taxes for education savers while decreasing state education revenue.

May 14 set for first hearing. Failed passage in committee. (Ayes 2. Noes 0. Page 1082.) Reconsideration granted.
#californiaqualifiedtuitionprogram #personalincometaxes #deduction
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WeVote Research Nonpartisan
Bill Summary · SB 529

Legislative bill overview

SB 529 proposes to allow California taxpayers to deduct contributions to California's qualified tuition program (529 plans) from their state income taxes. Currently, California does not offer this deduction, unlike most other states. The bill would create tax incentive parity with other states that already allow such deductions.

Why is this important

529 plans are a primary savings vehicle for education expenses, and the tax deduction would reduce the tax burden on middle and upper-income families saving for college or K-12 tuition. This could make education savings more attractive and competitive compared to other states, potentially affecting California's tax revenue and education financing landscape.

Potential points of contention

  • Revenue impact: California would lose tax revenue from high-income earners using the deduction, potentially shifting the state's education funding burden onto other taxpayers or reducing available funds for public education
  • Regressive benefit: The deduction primarily benefits higher-income families who can afford to save for education; lower-income families may see minimal benefit since they save less or use different education financing methods
  • Equity concerns: The bill may incentivize private K-12 education (through 529 coverage) while reducing resources for California's public education system that serves all students regardless of income

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

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