Nov. 07, 2024
Employers Eligible for Tax Credit Through PA 529 and PA ABLE Programs
It is often said that government does not create wealth, people do.
That point is often made when considering what government’s role is or should be. It is my belief that Harrisburg has its core services, such as public safety, care of our most vulnerable populations and education. But government should not be actively looking for ways to generate income. Instead, it should be looking for ways to help its citizenry generate income.
This was the idea behind a bipartisan measure passed earlier this year to make available tax credits to Pennsylvania’s employers and their employees to bolster savings programs for secondary education or assistance for individuals with disabilities.
The PA 529 College and Career Savings Program helps families save for future educational expenses like tuition, fees, books, equipment, room and board, and more at qualifying technical, collegiate and apprenticeship programs.
Commonwealth families who establish a PA 529 account lock in current tuition rates for availability in future years. Then, as the account grows, contributions made to PA 529 are free from both federal and state income taxes. State taxpayers can deduct up to $18,000 in contributions per beneficiary per year from their Pennsylvania taxable income for the purposes of determining their state income taxes.
But new for 2025, as written in House Bill 1745 of 2024, and enacted through Act 56 of 2024, Pennsylvania employers who make contributions to their employees’ PA 529 accounts can get a 25% tax credit on up to $500 in matching contributions per employee per year. Therefore, businesses can not only make a meaningful investment to help their employees but will experience their own tax advantage for doing so.
The same also applies to Pennsylvania’s ABLE (Achieving a Better Life Experience) Program. Designed similarly to PA 529, the plan is a tax-free way for people with disabilities to save and invest for disability-related expenses.
Account holders can accept tax deductible gift contributions from friends and relatives, and now employers. Not only are those savings free from state and federal taxes, but withdrawals from PA ABLE accounts for disability expenses are also exempt from federal and state income taxes.
And by allowing employers to earn a tax credit for making a contribution to their employees’ PA ABLE and PA 529 accounts, businesses will not only be helping their employees but are receiving a tax benefit themselves. I consider this a new and innovative tool that helps businesses attract talented staff and helps Pennsylvania’s workforce save for education- and disability-related expenses.
Both the PA 529 and PA ABLE programs are administered by the Pennsylvania Treasury. Learn more at PA529.com and PAABLE.gov.
Here are some additional news topics and reminders I would like to share.
Honoring Our Veterans - This Monday, Nov. 11, we celebrate Veterans Day by remembering the sacrifices these men and women made on behalf of our citizens and people around the world.
Veterans Day, originally known as Armistice Day, first marked the one-year anniversary of the end of World War I, on the 11th hour of the 11th day of the 11th month, and sought to honor the veterans of the World War – the only world war to have occurred at that time. Armistice Day was declared a national holiday in 1938 to acknowledge world peace, and then was renamed Veterans Day in 1954 to celebrate the contributions of veterans of all wars. For more about the history of Veterans Day, visit https://department.va.gov/veterans-day/history-of-veterans-day/.
For more information about programs and benefits to support our veterans in Pennsylvania, visit https://www.dmva.pa.gov.
Veterans across the Commonwealth are encouraged to learn more about the Pennsylvania Treasury Department’s great savings programs mentioned in this column, the PA 529 College and Career Savings Program and the PA ABLE Savings Program for Pennsylvanians with disabilities, during the first-ever Veteran Saves Week, Nov. 12-15. The week is dedicated to helping increase financial wellness and confidence for veterans, their families, caregivers and the military community at large.
Starting in January 2026, the federal ABLE Age Adjustment Act will expand ABLE account eligibility to millions more Americans, including 1 million veterans, by increasing the age of disability onset from 26 to 46.
Learn more about Treasury’s programs at www.patreasury.gov/consumer.
America250PA Launches First Round of Semiquincentennial Grants - America250PA is now accepting applications for the first round of semiquincentennial grants to help celebrate the 250th anniversary of the signing of the Declaration of Independence and the birth of the United States of America.
The grants are available to any Pennsylvania municipal entity, county or registered nonprofit organization to be used toward programming, projects or events that focus on education, preservation, innovation and celebration of the semiquincentennial. The grants require an equal match from the recipient.
The deadline to apply for the first round of grants is Sunday, Dec. 15. A second round will be held in the spring.
For additional information about how to apply, including a schedule of virtual office hours to answer questions about the program, visit https://www.america250pa.org/Semiquin_Grants.
Funding to Boost Housing Initiatives - The Pennsylvania Housing Finance Agency (PHFA) is seeking applications from organizations for projects to improve the availability and affordability of housing across the Commonwealth. Funding is being provided through the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund.
PHARE receives its funding from the impact fee levied on natural gas drilling companies and a portion of the Realty Transfer Tax. Funding is available for housing initiatives in all of Pennsylvania’s 67 counties. PHFA is charged with administering the allocation of PHARE dollars.
PHARE applications are completed and submitted entirely online, eliminating the need for paper submissions and simplifying the process for applicants. The request for proposal is located on PHFA’s website at https://www.phfa.org/legislation/act105.aspx. The online application is accessible on the PHARE website at https://phare.phfa.org/Login/Login.aspx. The deadline to apply is 2 p.m. on Friday, Nov. 15.
Representative Jill Cooper
55th Legislative District
Pennsylvania House of Representatives
Media Contact: Jordan Frei
724.875.8450
jfrei@pahousegop.com
RepJillCooper.com / Facebook.com/RepJillCooper