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 introduces a mechanism for adjusting these limits annually based on the percentage increase in the gross domestic product deflator, ensuring that the limits keep pace with inflation. Additionally, it allows for the carryforward of excess contributions that exceed the annual limit to future taxable years until fully deducted.

The bill removes specific language regarding the combined contributions and purchases that can be deducted by a taxpayer and their spouse, replacing it with a more general reference to the annual contribution limit. It also clarifies that the annual contribution limit for ABLE accounts will have the same meaning as defined in section 5747.70. Overall, the changes aim to streamline the tax deduction process for contributions to educational and disability savings accounts while ensuring that the limits are adjusted for inflation in subsequent years.

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