The moves focuses on a proposal now before the state senate, which touches on how much investors can contribute to their retirement plan as well as the tax status of college funding “529 plans” and rules governing retirement plan rollovers.
The Associated Industries of Massachusetts (AIM) and other business groups have backed the bill by Senator Robert O’Leary, which a state Revenue Department estimate says can cost as much as $20 million in lost revenue. “This is a tough battle, but it is the right thing to do for Massachusetts taxpayers,” an AIM e-mail proclaimed.
O’Leary’s bill changes state law to allow:
- tax deferral for the additional contributions by investors 50 or older – so-called “catch-up” payments,
- higher 401(k) and 403(b) contribution limits,
- liberalized rules governing rollovers of retirement plans or IRAs, and
- taxpayers to take tax-free distributions from increasingly popular college-savings plans