07 HB
225/AP
House
Bill 225 (AS PASSED HOUSE AND SENATE)
By:
Representatives Royal of the
171st,
Golick of the
34th,
Roberts of the
154th,
Keen of the
179th,
O`Neal of the
146th,
and others
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Titles 20 and 48 of the Official Code of Georgia Annotated, relating,
respectively, to education and revenue and taxation, so as to change certain
provisions regarding the Georgia Higher Education Savings Plan; to change
certain provisions regarding savings trust accounts; to change certain
provisions regarding the state income tax deduction for contributions to certain
college savings plans; to provide an effective date; to provide applicability;
to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
20 of the Official Code of Georgia Annotated, relating to education, is amended
in subsection (b) of Code Section 20-3-634, relating to savings trust accounts,
by revising paragraph (3) as follows:
"(3)
Provisions for withdrawals, refunds, rollovers, transfers, and any penalties.
An account owner may roll over all or part of any balance in an account to an
account established on behalf of a different beneficiary to the extent allowed
by Section 529 of the Internal Revenue Code. Unqualified withdrawals of
contributions and earnings shall be subject to such penalties or taxation as may
be imposed by the Internal Revenue Code. At its discretion, the board may impose
additional penalties on unqualified withdrawals to be used by the plan to defray
expenses; provided, however, that no such penalty shall apply to any withdrawal
that does not require a penalty or tax surcharge under the Internal Revenue Code
of 1986.
Contributions and earnings shall not be eligible for qualified withdrawal until
one year from the date of establishment of the
account;"
SECTION
2.
Title
48 of the Official Code of Georgia Annotated, relating to revenue and taxation,
is amended in subsection (a) of Code Section 48-7-27, relating to computation of
taxable net income for state income tax purposes, by revising paragraph (11) and
by adding a new paragraph to read as follows:
"(11)(A)
For taxable years beginning on or after January 1, 2002,
and prior to
January 1, 2007, an amount equal to
the amount of contributions by parents or guardians of a designated beneficiary
to a savings trust account established pursuant to Article 11 of Chapter 3 of
Title 20 on behalf of the designated beneficiary who is claimed as a dependent
on the Georgia income tax return of the beneficiary´s parents or guardians,
but not exceeding $2,000.00 per beneficiary.
(B)
If the parents or guardians file joint returns, separate returns, or single
returns, the sum of contributions constituting deductions on their returns under
this paragraph shall not exceed $2,000.00 per beneficiary.
(C)
In order to claim the deduction for a taxable year:
(i)
Such parent or guardian must have claimed and been allowed itemized deductions
pursuant to Section 63(d) of the Internal Revenue Code of 1986 and paragraph (1)
of this subsection;
(ii)
The federal adjusted gross income for such taxable year cannot exceed
$100,000.00 for a joint return or $50,000.00 for a separate or single return
except as provided in subparagraph (D) of this paragraph; and
(iii)
Such parent or guardian must be the account owner of the designated
beneficiary´s account.
(D)
The maximum deduction authorized by this paragraph for each beneficiary shall
decrease by $400.00 for each $1,000.00 of federal adjusted gross income over
$100,000.00 for a joint return or $50,000.00 for a separate or single
return.
(E)
For purposes of this paragraph, contributions or payments for any such taxable
year may be made during or after such taxable year but on or before the deadline
for making contributions to an individual retirement account pursuant to Section
219(f)(3) of the Internal Revenue Code of 1986;
(11.1)(A)
For taxable years beginning on or after January 1, 2007, an amount equal to the
amount of contributions to a savings trust account established pursuant to
Article 11 of Chapter 3 of Title 20 on behalf of the designated beneficiary, but
not exceeding $2,000.00 per beneficiary.
(B)
If the contributor files a joint return, separate return, or single return, the
sum of contributions constituting deductions on the contributor´s returns
under this paragraph shall not exceed $2,000.00 per return.
(C)
For purposes of this paragraph, contributions or payments for any such taxable
year may be made during or after such taxable year but on or before the deadline
for making contributions to an individual retirement account under federal law
for such taxable year;"
SECTION
3.
This
Act shall become effective upon its approval by the Governor or upon its
becoming law without such approval.
SECTION
4.
All
laws and parts of laws in conflict with this Act are repealed.