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A List of 529 Plan Tax Breaks By State

Jun 10, 2012

A 529 Plan is a great way to save for your child's college costs. You get to save for college in an organized tax free account. Not to mention you have your choice of which state to invest your money because you do not have to use the 529 plan of the state you reside in. Another great incentive to saving in a 529 plan is that your state may offer tax breaks and incentives for saving.

If the state you reside in has an income tax and you contribute to its 529 plan you may be eligible for generous tax breaks. But some plans give you the tax break even if you contribute to an out of state 529 plan. Be sure to check your states regulations for tax breaks specifics before starting any investment plan.

I have compiled a list of state 529 tax breaks:


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

These generous tax breaks make the incentive for saving even greater.

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