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
