HB 21-1311 Summary

• Limits federal itemized deductions for high-income taxpayers and extends/modifies limitations on Section 199A pass-through business deductions through 2026.

• Caps 529 education savings plan contributions at $20,000 (single) or $30,000 (joint) annually starting in 2022, with annual adjustments based on higher education cost changes.

• Increases earned income tax credits from 15% to 20-25% of federal credits and creates new child tax credit for low-income families and those ineligible for federal credits due to immigration status limitations.

• Creates temporary tax credit for business conversion costs to employee stock ownership plans, worker-owned cooperatives, or employee ownership trusts (up to $25,000-$100,000 depending on structure), expiring December 31, 2033.

• Prevents corporate tax avoidance through foreign incorporation by requiring inclusion of foreign-incorporated subsidiaries in combined reports and disqualifying certain captive insurance companies from tax exemption.