HB1035 Summary

• Updates Arkansas Tax-Deferred Tuition Savings Program references from Internal Revenue Code Section 529 as in effect January 1, 2018 to January 1, 2020, throughout multiple code sections governing the program's definitions, administration, and tax treatment.

• Allows rollovers from 529 education savings accounts into ABLE accounts (for individuals with disabilities) before January 1, 2026, subject to annual contribution limits under 26 U.S.C. § 529A(b)(2)(B)(i).

• Maintains contribution deduction limits for Arkansas tuition savings accounts at $5,000 per taxpayer annually, with carryforward provisions for unused amounts over four years; limits deductions for out-of-state 529 programs at $3,000 annually and $7,500 for rollovers into Arkansas accounts.

• Updates federal tax code references in Arkansas income tax law regarding discharge of indebtedness (§ 108 and 1017), employer-provided education expenses (§ 127), retirement and employee benefit plans (§§ 72, 219, 401-404, 406-416, 457), education loan interest deductions (§ 221), depreciation (§§ 167-168), and health savings accounts (§ 223) to reflect provisions effective January 1, 2020 or April 1, 2020.

• Effective for tax years beginning on or after January 1, 2021.