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State Tax Breaks for 529 Plan Contributions

By Peterson's Staff updated on Friday, January 25, 2013

Looking for a way to shave your tax bill? Nearly every state in the union that has a state income tax now offers a tax deduction if you're contributing to a 529 plan.

In-state vs. out-of-state college savings plan

Many states require you to contribute to an in-state 529 college plan, but some states allow you to contribute to any state's 529 savings plan and still receive the tax deduction. Be sure to check the regulations for your state before selecting a plan for your college funds. Here's a look at some of the most current tax breaks in place.

529 plan tax breaks by state

Alabama
Up to $5,000 per year

Arizona
$750 for single filers / $1,500 for joint filers (any state plan)

Arkansas
Up to $5,000 for single filers / $10,000 for joint filers

Colorado
Fully deductible up to contributor's adjusted gross income

Connecticut
Up to $5,000 for single filers / $10,000 for joint filers

District of Columbia
Up to $4,000 per contributor per year

Georgia
Up to $2,000 per beneficiary per tax return

Idaho
Up to $4,000 per contributor per year

Illinois
Up to $10,000 for single filers / $20,000 for joint filers

Indiana 
20% tax credit up to $5,000 in contributions per individual tax return per year (maximum yearly credit is $1,000)

Iowa
Up to $2,685 per beneficiary (adjusted annually for inflation)

Kansas
Up to $3,000 for single filers / $6,000 for joint filers per beneficiary (any state plan)

Louisiana
Up to $2,400 per account for single filers / $4,800 per beneficiary for joint filers

Maine
Up to $250 per beneficiary (any state plan) for contributors with adjusted gross income of $100,000 or less if single filer or $200,000 or less if joint filer

Maryland (Investment Plan)
Up to $2,500 per beneficiary per year with a 10-year carry forward of excess contributions

Maryland (Trust)
Up to $2,500 per account per year with an unlimited carry forward of excess contributions

Michigan (Savings)
Up to $5,000 for single filers / $10,000 for joint filers

Michigan (Trust)
Full amount of contribution

Mississippi Savings (MACS)
Up to $10,000 for single filers / $20,000 for joint filers

Mississippi Pre-Paid Tuition (MPACT)
Full amount of contribution

Missouri
Up to $8,000 for single filers / $16,000 for joint filers (any state plan)

Montana
Up to $3,000 for single filers / $6,000 for joint filers

Nebraska
Up to $2,500 for married filing separately / $5,000 for all others

New Mexico
Full amount of contribution

New York
Up to $5,000 for single filers / $10,000 for joint filers

North Carolina
Up to $2,500 for single filers / $5,000 for joint filers

North Dakota 
Up to $5,000 for single filers / $10,000 for joint filers

Ohio 
Up to $2,000 per beneficiary

Oklahoma 
Up to $10,000 per contributor per year with a 5-year carry forward of excess contributions

Oregon 
Up to $2,000 for single filers / $4,000 for joint filers

Pennsylvania 
Up to $12,000 per beneficiary per taxpayer (any state plan)

Rhode Island
Up to $500 for single filers / $1,000 for joint filers

South Carolina 
Full amount of contribution

Utah 
5% tax credit on contributions up to $1,650 per beneficiary for single filers or $3,300 per beneficiary for joint filers (maximum credit of $82.50 per beneficiary for single filers and $165 per beneficiary for joint filers; maximum is adjusted each year for inflation)

Vermont 
10% tax credit on up to $2,500 in contributions per beneficiary per year (maximum $250 credit per beneficiary per year)

Virginia 
Up to $4,000 per account per year; No limit for contributors age 70 and older

West Virginia 
Full amount of contribution

Wisconsin 
Up to $3,000 per beneficiary per tax return

No tax breaks for 529 plan contributions

The following states do not have tax breaks for contributions to a 529 college plan.

  • California
  • Delaware
  • Hawaii
  • Kentucky
  • Massachusetts
  • Minnesota
  • New Jersey

 

Not applicable due to lack of state income tax
In the following states, there is no state income tax, so a tax break for college savings plan contributions is not applicable.

  • Alaska
  • Florida
  • Nevada
  • New Hampshire
  • South Dakota
  • Tennessee
  • Texas
  • Washington
  • Wyoming

 

 

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Peterson's has more than 40 years of experience in higher education, and the expert staff members here are all ready to leverage their considerable knowledge and experience to help you succeed on your educational journey. We have the information, the know-how, and the tools -- now all we need is you!

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