PA could extend tax credit to employers who contribute to their employees’ PA ABLE accounts

24 March 2024- Treasurer Stacy Garrity today commended members of the Pennsylvania House for unanimously approving House Bill 1745, sponsored by Rep. Paul Friel (D-26), which will provide a tax credit for employers who contribute to PA 529 College and Career Savings Program accounts owned by their employees. The bill includes an amendment sponsored by Rep. Joe Emrick (R-137) to extend the same benefit to employers who contribute to employees’ PA ABLE Savings Program accounts. PA ABLE is a savings program for Pennsylvanians with disabilities.

“PA 529 and PA ABLE accounts are helping people all across Pennsylvania, and both have seen exceptional growth over the past three years. I applaud the House for advancing this bill to strengthen both programs with tremendous bipartisan support. Creating tax credits will encourage employers to contribute to employees’ PA 529 and PA ABLE accounts, which will be a huge benefit for hardworking families as they save for the future.”
 Pennsylvania State Treasurer Stacy Garrity

“The PA 529 program has helped hundreds of thousands of Pennsylvania families save for their child’s or grandchild’s future education. I’m pleased that the PA 529 tax credit bill passed the House unanimously. We’re coming together to improve college access and make education more affordable by reducing the financial burden on Pennsylvania’s students and their families.”
 Representative Paul Friel (D-26)

“Addressing the skills gap and strengthening our workforce starts with access to education. By encouraging employers to invest in their employees’ futures, HB 1745 not only supports Pennsylvania families but also contributes to building a more skilled and educated workforce.”
 Representative Kristin Marcell (R-178)

HB 1745 would establish a 25 percent tax credit on employer contributions of up to $500 per participating employee per year. It would apply to contributions made to any PA ABLE account and any 529 account owned by a Pennsylvania resident.

Incorporating a tax credit for Pennsylvania employers who provide contributions to PA 529 accounts was recommended by the Tuition Account Program Advisory Board in the program’s most recent annual report. Seven other states – Arkansas, Colorado, Idaho, Illinois, Nebraska, Nevada and Wisconsin – provide a similar credit.

HB 1745 now moves to the Senate for consideration. Treasurer Garrity thanked Rep. Friel, Rep. Marcell, Rep. Emrick, Rep. Peter Schweyer (D-134), and Rep. Jesse Topper (R-78) for their key roles in advancing the legislation in a bipartisan fashion.

The PA 529 College and Career Savings Program helps families steadily and strategically save for future educational expenses like tuition, fees, books, equipment, room and board and more at qualifying technical, collegiate and apprenticeship programs. PA 529 plans also offer significant state and federal tax advantages, and saving with PA 529 does not impact Pennsylvania state financial aid eligibility.