The proposed bill, sSB1462, establishes a tax credit for employers who contribute to their employees' Connecticut Higher Education Trust (CHET) accounts, effective July 1, 2025. Employers can claim a credit equal to 25% of their contributions, capped at $500 per employee per year. The bill specifies that this credit is not available to S corporations or partnerships, but allows single-member limited liability companies to claim it if they are subject to relevant state taxes. Additionally, the bill updates definitions related to CHET accounts, replacing "Depositor" with "Account owner," and aligning terms such as "Designated beneficiary" and "Eligible educational institution" with the Internal Revenue Code.

Moreover, 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 also mandates that contributions and distributions from CHET accounts will not be considered assets for state assistance eligibility, thereby protecting account owners' financial interests. The Treasurer is granted expanded authority to manage the trust, including hiring investment advisors and ensuring that investments are made in the best interest of account owners and beneficiaries. Overall, the bill aims to enhance the CHET program's operational framework 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