HI SB281

Establishes a state income tax deduction for contributions made to college savings programs established under section 529 of the Internal Revenue Code.

Allows qualified taxpayers filing single returns or married filing separately to deduct up to $4,000 annually; qualified taxpayers filing jointly, heads of household, or surviving spouses may deduct up to $8,000 annually.

Excess contributions exceeding the annual maximum may be carried forward and deducted in up to four subsequent tax years until exhausted.

Requires contributions to be credited to the account on or before the last day of the taxable year to be deductible; rollovers from other state programs are not eligible for the deduction.

Establishes recapture provisions requiring previously deducted contributions to be added back to income if nonqualified withdrawals are made from the college savings program; effective July 1, 2050 for taxable years beginning after an unspecified date.