General Assembly Raised Bill No. 1462 proposes the establishment of a tax credit for employer contributions to employees' Connecticut Higher Education Trust (CHET) accounts, effective July 1, 2025. Taxpayers will be able to claim a credit equal to 25% of their contributions, with a maximum of $500 per employee per taxable year. The bill also allows shareholders or partners of S corporations, partnerships, and owners of single-member limited liability companies to claim this credit. In addition to the tax credit, the bill amends existing definitions related to CHET accounts, replacing "Depositor" with "Account owner" and clarifying terms such as "CHET account" and "Designated beneficiary" in accordance with Section 529 of the Internal Revenue Code.

The legislation further enhances the management of CHET by empowering the Treasurer to invest trust funds prudently and retain investment advisors, while ensuring that investments serve the interests of account owners and beneficiaries. It mandates annual financial reporting by the Treasurer to the Governor and the Connecticut Higher Education Trust Advisory Committee, promoting transparency. The bill also protects account owners by stating that contributions and distributions for qualified expenses will not count as assets for state assistance eligibility. Additionally, it allows for tax refund contributions to be designated for either a beneficiary or the CHET Baby Scholars fund, with specific procedures for handling these contributions. The bill repeals Section 3-22u of the general statutes, effective July 1, 2025, and applies to income and taxable years starting January 1, 2025.

Statutes affected:
Raised Bill: 3-22f, 3-22h, 3-22i, 3-22k, 3-22m, 3-22o, 3-22p, 12-743, 3-22u