Substitute Senate Bill No. 1462 proposes a new 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 only to employers who are not owned by the employee or their family members. The bill also allows S corporations and partnerships to pass the credit to their shareholders or partners. In addition to establishing this tax credit, the bill makes several amendments to the CHET program, including updating definitions and provisions to align with federal law, such as replacing "Depositor" with "Account owner" and clarifying terms like "CHET account" and "Designated beneficiary."

Moreover, the bill eliminates the CHET Baby Scholars Fund and the ability for taxpayers to contribute to it from their state income tax refunds, redirecting those contributions to the newly established Connecticut Baby Bond Trust. It also mandates that contributions to CHET accounts and distributions for qualified expenses will not be considered assets for state-administered public assistance eligibility. The Treasurer is empowered to manage trust investments prudently and is required to submit an annual financial report on the trust's operations. Overall, the bill aims to enhance the CHET program's operational efficiency and accessibility while providing financial incentives for employers to support their employees' 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