Substitute Senate Bill No. 1462 proposes a tax credit for employers who contribute to their employees' Connecticut Higher Education Trust (CHET) accounts, effective July 1, 2025, for taxable years starting January 1, 2025. The credit is set at 25% of the employer's contributions, capped at $500 per employee per year, and is available to employers excluding S corporations and partnerships, with provisions for shareholders or partners to claim the credit if applicable. The bill also updates terminology within the CHET program, replacing "Depositor" with "Account owner" and clarifying definitions related to CHET accounts and designated beneficiaries in accordance with federal law.

Additionally, the bill repeals the CHET Baby Scholars Fund and allows taxpayers to contribute their state income tax refunds to the newly established Connecticut Baby Bond Trust instead. It mandates that contributions and distributions from CHET accounts be disregarded when determining eligibility for state-administered means-tested programs. The Treasurer is empowered to manage investments prudently, hire investment advisors, and submit annual financial reports to account owners and designated beneficiaries. Overall, the bill aims to enhance the CHET program's accessibility and attractiveness while aligning it with federal standards and providing financial incentives for employers to support education savings.

Statutes affected:
Raised Bill: 3-22f, 3-22h, 3-22i, 3-22k, 3-22m, 3-22o, 3-22p, 12-743, 3-22u
FIN Joint Favorable Substitute: 3-22f, 3-22h, 3-22i, 3-22k, 3-22m, 3-22o, 3-22p, 12-743, 3-22u
File No. 876: 3-22f, 3-22h, 3-22i, 3-22k, 3-22m, 3-22o, 3-22p, 12-743, 3-22u