The bill amends sections 5747.70 and 5747.78 of the Revised Code to modify the income tax deductions for contributions to 529 plans and ABLE accounts. It establishes a new annual contribution limit for these deductions, which is set at eight thousand dollars for taxpayers filing jointly and four thousand dollars for all other taxpayers starting in 2025. The bill also allows for adjustments to these limits in subsequent years based on the percentage increase in the gross domestic product deflator, ensuring that the limits can keep pace with inflation.

Additionally, the bill removes previous language that specified the combined deduction limits for taxpayers and their spouses, replacing it with a more straightforward approach that ties the deduction limits directly to the annual contribution limits for each beneficiary. It clarifies that any excess contributions can be carried forward to future taxable years until fully deducted. The bill aims to streamline the process for taxpayers contributing to educational savings accounts while ensuring that the limits are updated regularly to reflect economic changes.

Statutes affected:
As Introduced: 5747.70, 5747.78
As Reported By House Committee: 5747.70, 5747.78
As Passed By House: 5747.70, 5747.78