Treasurer Stacy Garrity Applauds New Tax Credit for Employer Contributions to Employees’ PA 529 and PA ABLE Accounts
Harrisburg, PA - Treasurer Stacy Garrity today praised the addition of a tax credit for employers to contribute to their employees’ PA 529 College and Career Savings accounts and PA ABLE accounts.
The tax credit, originally contained in House Bill 1745, co-prime sponsored by Rep. Kristin Marcell (R-Bucks) and Rep. Paul Friel (D-Chester), was included in this year’s Tax Code bill which was signed into law by Gov. Josh Shapiro and is now Act 56 of 2024. This new tax credit encourages employers to contribute to their employees’ PA 529 College and Career Savings Program accounts and PA ABLE accounts. It will provide substantial benefits to families across Pennsylvania and support workforce development.
With the new tax credit, which goes into effect in January 2025, Pennsylvania employers will be eligible for a 25 percent tax credit on matching employer contributions of up to $500 per employee per year.
“This tax credit is outstanding news. It will encourage employers to help employees save with our tremendous PA 529 College and Career Savings Program and the excellent PA ABLE savings program for people with disabilities. That will be a huge help to families across Pennsylvania, and by offering this new benefit, employers will become even more attractive places to work. I thank Rep. Friel and Rep. Marcell for their great work getting this tax credit enacted.”
Pennsylvania State Treasurer Stacy Garrity
“The 529 Act is an example of how we can, and must, work together to make progress for our families. By finding common ground, building bipartisan connections and remembering who we serve – the people of Pennsylvania – I’m proud that we are making saving for college or career training that much more accessible.”
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, this tax credit supports Pennsylvania families and builds a more skilled and educated workforce. We are making it easier for families to save for higher education, ensuring that our students have the opportunities they need to succeed.”
Representative Kristin Marcell (R-178)
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 offer significant state and federal tax advantages, and saving with PA 529 does not impact Pennsylvania state financial aid eligibility
PA ABLE offers seven different savings and investment options, including an interest-bearing checking account. PA ABLE account owners can contribute up to $18,000 per year. Contributions can be deducted from PA state income taxes, and owners pay no federal or state income taxes on account growth when used for qualified expenses.