CO SB084

Adds qualified education loan payments as an eligible distribution from 529 plans for Colorado state income tax deduction purposes, effective for tax years beginning January 1, 2023.

Allows up to $10,000 in principal or interest payments on qualified education loans to be withdrawn from 529 plans without triggering recapture of the state income tax deduction.

Aligns Colorado state law with the federal government's 2019 expansion of Section 529 of the Internal Revenue Code to include education loan repayment as an eligible expense.

Amends Colorado Revised Statutes 39-22-104 to specify loan payments as an eligible distribution reason alongside existing qualified higher education expenses.

Takes effect 90 days after final adjournment of the general assembly, unless subject to referendum petition filed by November 2022.