HB 145 – New Tax Deductions for Education and DEpendABLE Accounts – Passes House and Senate

The Senate passed House Bill 145 last week unanimously, 21-0, after the House passed it by a vote of 39-1-1 last year. Only Democratic Representative Madinah Wilson-Anton voted no, and Republican Representative Tim Dukes was absent. This bill will provide tax benefits to Delawareans saving for education or for the benefit of people with disabilities. It would give a personal income tax deduction of up to $1,000 for contributions to a DE529 Education Savings Plan Account, and up to $5,000 for contributions to DEpendABLE accounts.

DE529 accounts help parents, grandparents and others pay for education expenses, reducing the possibility of debt. Money in the accounts is tax free as it grows and withdrawals for qualified education expenses like tuition, fees, and books are federal and Delaware income tax-free.

DEpendABLE, Delaware’s Achieving a Better Life Experience (ABLE) program, allows individuals with disabilities and their families to save for a broad range of expenses on a tax-advantaged basis without jeopardizing their benefits from supplemental security income (SSI), Medicaid and other federal and state programs.

House Bill 145 Sponsors	Yes Votes	No Votes
Griffith, K.Johnson, Longhurst, Heffernan, Dorsey Walker, Bush, Brady, Lambert	House Passes 39-1-1. Baumbach Bennett Bentz Bolden Brady Bush Carson Chukwuocha Cooke Dorsey-Walker Griffith Heffernan K.Johnson K.Williams Kowalko Lambert Longhurst Lynn Matthews Minor-Brown Mitchell Morrison Osienski S.Moore Schwartzkopf Briggs King Collins D.Short Gray Hensley M.Smith Morris Postles Ramone Shupe Smyk Spiegelman Vanderwende Yearick	Wilson-Anton, Dukes (Absent)
Paradee, Sturgeon, Hansen, Gay	Senate Passes 21-0. Brown Ennis Gay Hansen Lockman Mantzavinos Paradee Pinkney Poore S.McBride Sokola Sturgeon Townsend Walsh Bonini Hocker Lawson Lopez Pettyjohn Richardson Wilson	None
Current Status —	Sent to the Governor.

Senator Trey Paradee, the bill’s sponsor in the Senate: “Putting aside money for the future can be an incredibly difficult proposition for most families. Even when our economy is booming, most families still have less than $1,000 on hand and many hold more credit card debt than savings. To help middle-class families build up the nest egg they need to support their child’s future, Rep. Krista Griffith and I sponsored legislation to help their savings accounts go even further.”

“Parents saving for college or putting money away to secure a stable future for their child with disabilities deserve our support. I want to thank Treasurer Colleen Davis and my colleagues in the Delaware Senate for voting unanimously today to send this critical incentive on to Governor Carney for his signature.”

Senator Laura Sturgeon: “I am proud to have cosponsored House Bill 145, which allows an annual tax deduction on up to $1000 for low- and middle- income family members to save for a child’s future college expenses and also allows families who have children with disabilities to save for their child’s future independence.”