Colorado § 39-22-539 - Credit for employer contributions to employee 529 qualified state tuition programs - legislative declaration - definitions - repeal.

§ 39-22-539. Credit for employer contributions to employee 529 qualified state tuition programs - legislative declaration - definitions - repeal.

(1) The general assembly hereby finds and declares that the qualified state tuition savings program administered by collegeinvest helps empower families to save for higher education and enables residents to further educational opportunities and pursue professional goals. The purpose of this section is to provide an incentive for employers to help their employees enhance education savings goals by contributing directly to the employees' qualified state tuition program accounts administered by collegeinvest.

(2) As used in this section:

(a) "529 qualified state tuition program account" means a qualified state tuition program account established by collegeinvest created in section 23-3.1-203.

(b) "Employee" means any person in the employment of an employer for a salary or for hourly wages, whether full-time or part-time and whether temporary or permanent.

(c) "Employer" means any person doing business in the state.

(3) For income tax years commencing on or after January 1, 2019, but prior to January 1, 2032, if an employer makes a contribution of money to a 529 qualified state tuition program account owned by an employee during the income tax year, without regard to the named beneficiary of the account, then the employer is allowed a credit against the income taxes imposed by this article 22 in an amount equal to twenty percent of the contribution. The maximum total credit an employer may claim under this section for each employee in a taxable year is five hundred dollars.

(4) If the amount of the credit allowed in this section exceeds the amount of income taxes otherwise due on the employer's income in the income tax year for which the credit is being claimed, the amount of the credit not used as an offset against income taxes in the current income tax year may be carried forward and used as a credit against subsequent years' income tax liability for a period not to exceed three years and must be applied first to the earliest income tax years possible. Any credit remaining after the period may not be refunded or credited to the employer.

(5) No later than January 1, 2019, and quarterly thereafter, collegeinvest shall provide the department with an electronic report containing information for 529 qualified state tuition program account holders, beneficiaries, and donors that the department determines is necessary for the administration of the credit allowed in this section. The report must include, but is not limited to:

(a) The name and social security number of the account holder of each 529 qualified state tuition program account;

(b) The name, date of birth, and social security number of the beneficiary of each 529 qualified state tuition program account; and

(c) Contribution data that contains the:

(I) Amount of each contribution;

(II) Date of each contribution; and

(III) Source of each contribution, including the social security number or federal employee identification number of the contributor.

(6) The department of revenue may seek, accept, and expend gifts, grants, or donations from private or public sources for the department's costs in administering the income tax credit allowed in this section. The department may expend money received through gifts, grants, or donations consistent with any terms and conditions imposed as a condition of receiving such money for administering the income tax credit allowed in this section within existing appropriations; except that, notwithstanding part 13 of article 75 of title 24, the general assembly may appropriate state funds to the department in the future to administer the income tax credit allowed in this section.

(7) This section is repealed, effective December 31, 2036.

Source: L. 2018: Entire section added, (HB 18-1217), ch. 287, p. 1777, § 2, effective August 8. L. 2020: (3) and (7) amended, (HB 20-1109), ch. 182, p. 837, § 2, effective September 14.

Cross references: (1) For the short title ("Working Families College Savings Act") in HB 18-1217, see section 1 of chapter 287, Session Laws of Colorado 2018.

(2) For the legislative declaration in HB 20-1109, see section 1 of chapter 182, Session Laws of Colorado 2020.