College Savings Act Brings New Opportunity for Employers
State income tax credit now available for Colorado employer contributions to CollegeInvest 529 College Savings Accounts
The Working Families College Savings Act, passed by the Colorado Legislature in 2018 and officially in effect Jan. 1, provides an innovative resource for local employers to boost their employees' CollegeInvest 529 savings accounts.
The new plan offers a Colorado tax credit for employers that make contributions to CollegeInvest savings plans owned by their employees. The accounts can be used by any beneficiary including children, grandchildren, nieces, nephews, even for the employee's own higher-ed goals. The available tax credit is 20 percent of the amount contributed to a CollegeInvest 529 account, up to $2,500 per employee. Within that scope, employers will have the flexibility to design specific benefit strategies that best suit their business needs and the need of their employees.
"The Working Families College Savings Act is a game-changer for Colorado," said Angela Baier, CEO of CollegeInvest. "The high cost of postsecondary education impacts the families [that] are struggling to meet those costs and the overall economic health of our state. This is a comprehensive solution that will actually put more money directly in the savings accounts of working families [that] are already saving as much as they can."
The bipartisan bill was sponsored in 2018 by Rep. Kevin Van Winkle, Highlands Ranch and Alec Garnett, Denver; Sen. Bob Gardner, Colorado Springs and was signed into law by former Gov. John Hickenlooper. Its passage makes Colorado the fourth state in the country to create a tax incentive for incorporating college savings as an employee benefit.
Early interest among Colorado employers is high and many already signed on the program.
"Employers in Colorado are looking for meaningful, yet affordable benefits for their valued employees, and we've sen strong interest from Colorado businesses of all sizes, Baier said. "Many have already committed to the program and have started contributing to their employees' CollegeInvest savings plans from day one."
Innovest Portfolio Solutions is one of the first Colorado companies to enroll in the program.
"We have a culture of stewardship which is reinforced by having a family-friendly work environment," said CEO Richard Todd. "We also believe that education is very important, so to celebrate our employees' growing families, we think it's a wonderful opportunity to open a CollegeInvest 529 college savings account when an employee welcomes a child."
Another Colorado employer, PCL Construction, also signed on to begin offering the benefit to their employees immediately.
"PCL Construction is proud to partner with CollegeInvest and help our employees plan for their children's future," said Shannon Latham, National HRPD director. "By offering this family-centric incentive, we are fostering the outstanding company culture for which PCL is known."
CollegeInvest is Colorado's nonprofit, completely self-sustaining state agency charged with helping Coloradans save for post-secondary education and reduce student loan debt, especially low and middle-income families. Based on the principle that saving for higher education is more effective than borrowing, CollegeInvest is Colorado's trusted resource in breaking down the financial barriers to attaining a postsecondary education, whether a degree from a community college or four-year university or vocational training.