A bill for an act relating to the treasurer of state's duties, including Iowa educational savings plan trust and Iowa ABLE savings plan trust requirements and disposition of unclaimed property, and including retroactive applicability provisions.(Formerly HSB 626; See HF 2667.)
The bill introduces a significant change by aligning the adjustment of contribution limits to the higher education price index, which may better reflect the actual cost increases associated with educational expenses, rather than the general consumer price index. Furthermore, it permits direct transfers from a 529 account to a Roth IRA, exempting these transfers from state individual income taxation. This retroactive applicability from January 1, 2024, for the tax year beginning on or after that date provides immediate benefits for ongoing savings strategies.
House File 2537 relates to the duties of the treasurer of the state of Iowa, focusing on the modification of requirements for educational savings plans and the management of unclaimed property. This legislation aims to enhance the Iowa Educational Savings Plan Trust and the Iowa ABLE Savings Plan by increasing the maximum amount that can be contributed to these accounts for tax deduction purposes. The proposed increase raises the contribution limit from $3,785 to $5,500 per year for each beneficiary, which allows for better tax planning and savings opportunities for families and individuals saving for education or disability expenses.
Overall, HF2537 presents a combined effort to enhance savings opportunities through educational accounts while simplifying state processes regarding unclaimed property. As legislation progresses, attention will likely focus on the impact of reduced publication requirements and the balance between easing processes and ensuring public awareness.
Another crucial component of HF2537 addresses the disposition of unclaimed property. The bill reduces the mandatory requirements for the treasurer to publish notices regarding unclaimed property, allowing for a more discretionary approach. Stakeholders may have concerns about the reduced transparency in unclaimed property reporting, and whether this could lead to less public awareness about available claims. Additionally, the treasurer's ability to identify apparent owners of unclaimed property using state tax information could raise privacy considerations for some individuals.