CO SB257

Prohibits Colorado state income tax deductions for contributions to 529 college savings accounts (qualified state tuition programs) if the contributions are intended for elementary or secondary school expenses.

Defines "qualified higher education expenses" to exclude elementary and secondary school expenses, aligning state law with federal Internal Revenue Code Section 529 as it existed before the Tax Cuts and Jobs Act of 2017.

Requires recapture of any tax deductions taken for 529 contributions when distributions are made from the account for any reason other than qualified higher education expenses.

Mandates that Collegeinvest provide the Colorado Department of Revenue with information about distributions not used for qualified higher education expenses to aid in tax administration.

Effective for tax years commencing on or after January 1, 2001, clarifying that the state tax deduction does not follow the federal expansion allowing 529 withdrawals for K-12 school expenses.