"The Experience"



State Tax Breaks for 529 Contributions

Author: petersons, Category: College Scholarships & Financial Aid, Scholarship Contest

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.

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

State 529 Deduction
Alabama Beginning in 2008, up to $5,000 per year
Alaska N/A - No state income tax
Arizona Beginning in 2008, $750 for single filers / $1,500 for joint (any state plan)
Arkansas Up to $5,000 for single filers / $10,000 for joint
California None
Colorado Fully deductible up to contributor’s adjusted gross income
Connecticut Up to $5,000 for single filers / $10,000 for joint
Delaware None
District of Columbia Up to $4,000 per contributor per year
Florida N/A - No state income tax
Georgia Up to $2,000 per beneficiary per tax return
Hawaii None
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 per beneficiary (any state plan)
Kentucky None
Louisiana Up to $2,400 per account for single filers / $4,800 per beneficiary for joint
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
Massachusetts None
Michigan (Savings) Up to $5,000 for single filers/ $10,000 for joint
Michigan (Trust) Full amount of contribution
Minnesota None
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
Nevada N/A - No state income tax
New Hampshire N/A - No state income tax
New Jersey None
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 per year (Beginning in 2008, joint filers up to $4,000)
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
South Dakota N/A - No state income tax
Tennessee N/A - No state income tax
Texas N/A - No state income tax
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 $2,000 per account per year (beginning in 2009, up to $4,000); No limit for contributors age 70 and older
Washington N/A - No state income tax
West Virginia Full amount of contribution
Wisconsin Up to $3,000 per beneficiary per tax return
Wyoming N/A - No state income tax

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