Assemblywoman Bonilla Proposes Tax Relief to Help California Families Pay for College

SACRAMENTO – Assemblywoman Susan A. Bonilla (D-Concord) announced that she will introduce legislation, which provides valuable tax relief for families that invest in a 529-college savings plan.

“Students are constantly being hit with college tuition increases,” said Assemblywoman Bonilla. “This measure will help curb these costs by expanding college savings opportunities for California families who are affected most by rising tuition fees.”

While the earnings from college savings accounts are tax exempted, California offers no other incentive to invest in 529-college savings plans.  AB 17 addresses this concern and encourages parents to put away more money for college by providing a refundable tax credit of 20 percent of the amount contributed to a 529 savings plan, up to $2,500, for a maximum credit of $500 per year. The credit would be limited to taxpayers with an annual income of $100,000 for single filers and $200,000 for joint filers.

“California is one of only seven states with personal income taxes that do not offer any type of tax incentive for saving with a 529 plan – changing this is long overdue,” said Assemblywoman Bonilla.  “Children with college savings accounts are seven-times more likely to attend college. This bill will not only increase the number of families saving for college, but it will increase the amount of money set aside for children and their higher education.”

Assemblywoman Susan A. Bonilla (D-Concord) was elected in November 2010 and represents California’s 14th Assembly District, which includes Contra Costa County and Solano County