Virginia House Bill HB240

Virginia 2024 Regular Session

• Introduced: 1/4/24
• Refer: 1/4/24

Caption

Income tax, state; contributions to Virginia College Savings Plan accounts, report.

Impact

If enacted, HB240 would have a notable impact on state taxation policies by introducing nonrefundable tax credits for employers based on their contributions to VCSP accounts. The tax credit is expected to cover up to 35% of the contributions made by qualifying businesses for eligible employees. This move is anticipated to not only lower the tax liabilities for businesses but also enhance financial assistance available to families saving for their children’s education, thereby incentivizing educational savings across Virginia.

Summary

House Bill 240 seeks to amend sections of the Virginia Code related to state income tax and contributions to the Virginia College Savings Plan (VCSP). The primary objective of the bill is to provide tax credits to businesses that make contributions to VCSP accounts for their employees. This incentive aims to encourage businesses to support employees' children's education savings, thereby promoting educational investment in the state. The proposed legislation outlines specific criteria for contributions to qualify for the tax credit, such as requiring full-time employment and setting income thresholds for which employees are eligible.

Contention

Despite its potential benefits, the bill has raised concerns among some lawmakers regarding its fiscal implications for the state budget, as tax credits could potentially reduce state revenue. Opponents may argue that directing state income tax revenue to support specific savings plans could limit funding available for broader educational initiatives. Additionally, there may be apprehensions about the fairness of such tax credits, especially for small businesses that may find it challenging to contribute to such plans compared to larger corporations.