CO HB1123

Aligns Colorado state income tax law with the federal Tax Cuts and Jobs Act of 2017 by allowing tax-free distributions from 529 accounts for elementary and secondary school tuition expenses.

Adds qualified elementary and secondary tuition expenses as a non-recapturable reason for 529 account withdrawals, preventing tax recapture on deductions when distributions are used for K-12 private, public, or religious school tuition.

Limits elementary and secondary tuition withdrawals to the dollar amount limitation set forth in Internal Revenue Code Section 529(e)(3)(A)(iii).

Amends Colorado Revised Statutes Section 39-22-104 to define "qualified elementary and secondary tuition expenses" as expenses related to enrollment or attendance at elementary or secondary public, private, or religious schools.

Takes effect 90 days after final adjournment of the 2019 legislative session (August 2, 2019), subject to referendum petition.