COLUMBUS—State Senator Jay Hottinger (R-Newark) announced the passage of legislation today in the Ohio Senate that doubles the maximum income tax deduction to $4,000 per beneficiary for contributions to college savings accounts and disability expense savings accounts with the goal of helping Ohio families save for their futures.
“The Ohio Senate is committed to lowering the financial hurdles for Ohio families who are saving for a loved one’s college education," said Hottinger, who sponsored Senate Bill 5 in the Ohio Senate. "As a parent, I am proud to sponsor this important piece of legislation. Ohioans will soon be able to take advantage of a little extra tax relief as they save for their children's futures."
Senate Bill 5 builds on a law passed in 2016, which established Achieving a Better Life Experience (ABLE) savings accounts so families can save and make funds available for their loved ones' disability-related expenses. Additionally, the bill establishes the Joint Committee on Ohio College Affordability to study and develop innovative strategies to reduce the cost of attending college in the state.
As the cost of higher education continues to rise nearly every year, it has become increasingly difficult for students and families to afford a college degree without accumulating an significant amounts of student loan debt.
Increasing the tax deduction for contributions to an Ohio college savings plan will allow families to save more money over time in order to prepare for higher education costs. Other states, including Michigan, Illinois, Pennsylvania, and West Virginia have increased their allowed tax deductions for contributions to a 529 college savings plan.
Senate Bill 5 now goes to the House of Representatives for further consideration. Similar language contained in the Senate's version of the biennial state budget, which was announced earlier this week.