A new bill introduced by East Providence Representative Helio Melo would double the state income tax deduction allowed for college savings accounts.
The bill would increase the maximum deduction from $500 to $1,000 for individuals, and up to $2,000 for couples filing jointly.
Melo, the former chair of the House Finance Committee, said he's hoping the added incentive will encourage families to set aside more money for college.
“It’s not easy for families with children to save money, but contributing to a college savings account increases their child’s likelihood of attending college," Melo said in a statement announcing the bill. "The more they can save, the better it is for the child, the parent and, ultimately, the state, because we know increasing the education and skill level of our population will attract strong companies that bring with them better jobs.”
The state tax deduction applies only to Rhode Island's 529 savings plan, the CollegeBound Fund. It does not apply to college savings plans operated by other states or banks.
President Barack Obama recently rolled back a plan to reduce deductions for college savings allowed on federal income tax returns.