HI HB2519

Allows annual tax deductions for contributions to Hawaii college savings program accounts under chapter 256, with maximum deductions of $5,000 for individual taxpayers and $10,000 for married couples filing jointly.

Permits taxpayers to carry forward excess contributions that exceed the annual deduction limit to subsequent tax years for up to five years or until the excess is fully deducted.

Prohibits deductions for amounts derived from withdrawals or rollovers from other qualified tuition programs under Internal Revenue Code section 529, and prohibits deductions when a nonqualified withdrawal occurs in the same tax year.

Subjects nonqualified withdrawals to recapture of previously claimed deductions (added back to taxable income) plus an additional 10 percent penalty on the withdrawn amount.

Takes effect on July 1, 2525.