The House gave initial approval to legislation (HB 770) sponsored by Margaret Dickson (D-Cumberland) on Wednesday that would allow contributions to North Carolina’s “529” college savings plan to be tax deductible annually up to $10,000. The plan, similar to those in other states, allows investors to set aside money that can grow tax-deferred. The money can be withdrawn free from federal tax if it’s used to pay for college. Other states also provide additional state income tax benefits, but North Carolina currently does not. The bill would allow taxpayers to deduct up to $10,000 from their taxable income if it is contributed to one of these 529 accounts, named for the section of the tax code that allows them. Final passage of the bill is expected on Monday night, and then it will move over to the Senate for consideration.
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