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Connecticut Official Wants 529 Plan Tax Break

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A Nutmeg State leader has proposed a state income tax reduction for residents who invest in the state’s college savings plans.

State Treasurer Denise Nappier says Connecticut is at a disadvantage because most other states offer tax incentives to residents who contribute to their 529 college savings programs.

Nappier’s proposal calls for a state tax deduction on contributions to the Connecticut Higher Education Trust of up to $5,000 for single individuals and $10,000 for couples filing joint returns.

The annual cost of the proposal to the state would be $5 million to $7 million, Nappier estimates.

TIAA-CREF Tuition Financing Inc., New York, which manages CHET, says it expects the legislation to be introduced soon.