As college costs have continued to rise, saving money for education is likely top-of-mind for students, their parents, and even grandparents. In the US, 529 plans are flexible, state-administered accounts that provide a tax-advantaged way to save for certain education costs.
Are 529 contributions tax-deductible? It depends on where you live and what plan you have. Here’s what to know.
What are 529 tax benefits?
Those who contribute to and receive distributions from 529 plans may benefit from a number of tax advantages.
Tax benefits to beneficiaries
- 529 plan distributions don’t incur federal income taxes or penalties if they’re used to pay for qualified expenses, which include tuition, books, and other education-related costs.
- Those who receive 529 distributions can use up to $10,000 in tax-free distributions in their lifetime to repay student loans.
- They can generally also use up to $10,000 in federal-tax-free distributions to pay for elementary or secondary tuition at a public, private, or religious school each year. States have their own regulations on whether they consider this a qualified expense, so check your plan.
- The SECURE Act of January 2020 allows 529 beneficiaries to use tax-free distributions to pay for qualified apprenticeship expenses.
- The SECURE 2.0 Act allows for tax- and penalty-free rollovers from 529 accounts to Roth IRAs, under certain conditions. 529 account beneficiaries can roll over up to $35,000 during their lifetime from any 529 account in their name that has been open for at least 15 years to their Roth IRA (subject to the beneficiary’s Roth IRA contribution limits).
Tax benefits to contributors
- 529 plan contributions are removed from their taxable estate.
- In 2025, contributors can give up to $19,000 a year without counting against the lifetime gift tax exemption amount ($13.99 million in 2025). But with the “superfunding” or “accelerated gifting” strategy, a contributor can give up to 5 times that yearly limit in a single year without triggering the gift tax or reducing the lifetime gift exemption amount—as long as they don’t surpass $95,000 in contributions over 5 years.
- While 529 contributions are not tax-deductible federally, many states offer tax benefits on state income tax returns.
Are 529 contributions tax-deductible?
Many states offer a deduction or tax credit for their in-state plans on state income tax returns, though there might be income limits for eligibility. There are even 9 states (Arizona, Arkansas, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, and Pennsylvania) that allow taxpayers to claim state income tax deductions/credits for contributions to 529 plans from any state. (This is known as “tax parity.”)
Some states don’t tax wages and salaries, so they don’t offer 529 credits or deductions on state income tax returns. Those 9 states are: Alaska, Florida, New Hampshire (note: no state ordinary income taxes; income tax applies to dividends and interest, which was repealed Jan. 1, 2025), Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Other states do tax income but don’t offer credits or deductions for 529 contributions. Those 4 states are: California, Hawaii, Kentucky, and North Carolina.
This chart shows how all 50 states and Washington, DC, handle 529 tax benefits for individual and joint tax filers. (4 states offer credits; 1 allows a credit or a deduction; the rest offer deductions only.) Not all states adjust deductions or credits for 529 contributions annually, but we have noted if there is a difference in the amounts for tax years 2024 and 2025 if information was available. See each state’s Department of Treasury for additional information on limits and exclusions.
| State | Maximum deductions for tax years 2024 and 2025 for individual filers/those married filing jointly |
|---|---|
| Alabama | $5,000/$10,000 |
| Alaska | No benefits |
| Arizona | $2,000/$4,000 per beneficiary |
| Arkansas | $5,000/$10,000 |
| California | No benefits |
| Colorado | For 2024: $22,700/$34,000, each per beneficiary
For 2025: $25,400/$38,100, each per beneficiary |
| Connecticut | $5,000/$10,000 |
| Delaware | $1,000/$2,000 |
| Florida | No benefits |
| Georgia | $4,000/$8,000, each per beneficiary |
| Hawaii | No benefits |
| Idaho | $6,000/$12,000 |
| Illinois | $10,000/$20,000 |
| Indiana | Credit (not a deduction)
Up to $300 for individual and joint filers; up to $150 for those married filing separately |
| Iowa | For 2024: $5,500 per taxpayer per beneficiary
For 2025: $5,800 per taxpayer per beneficiary |
| Kansas | $3,000/$6,000, each per beneficiary |
| Kentucky | No benefits |
| Louisiana | $2,400/$4,800, each per beneficiary |
| Maine | $1,000 per beneficiary |
| Maryland | $2,500/$5,000, each per beneficiary |
| Massachusetts | $1,000/$2,000 |
| Michigan | $5,000/$10,000 |
| Minnesota | $1,500/$3,000 (or you can take a credit up to $500) |
| Mississippi | $10,000/$20,000 |
| Missouri | $8,000/$16,000 |
| Montana | $3,000/$6,000 |
| Nebraska | $10,000 for individual and joint filers/$5,000 for those married filing separately |
| Nevada | No benefits |
| New Hampshire | No benefits |
| New Jersey | $10,000 per taxpayer |
| New Mexico | 100% of contributions |
| New York | $5,000/$10,000 |
| North Carolina | No benefits |
| North Dakota | $5,000/$10,000 |
| Ohio | $4,000 per beneficiary |
| Oklahoma | $10,000/$20,000 |
| Oregon | Credit (not a deduction)
Up to $180 for individual filers/up to $360 for joint filers |
| Pennsylvania | For 2024: $18,000/$36,000, each per beneficiary
For 2025: $19,000/$38,000, each per beneficiary |
| Rhode Island | $500/$1,000 |
| South Carolina | 100% of contributions |
| South Dakota | No benefits |
| Tennessee | No benefits |
| Texas | No benefits |
| Utah | Credit (not a deduction)
For 2024: $109.66/$219.31, each per beneficiary For 2025: $113.30/$226.59, each per beneficiary |
| Vermont | Credit (not a deduction)
$250/$500, each per beneficiary |
| Virginia | $4,000 per beneficiary; 100% of contributions for those age 70 and older |
| Washington, DC | $4,000/$8,000 |
| Washington | No benefits |
| West Virginia | 100% of contributions |
| Wisconsin | $5,000 for individual and joint filers/$2,500 for those married filing separately |
| Wyoming | No benefits |
Other 529 tax considerations
Choosing a 529 plan
You don’t have to pick your home state’s plan, but depending on your home state’s laws, you might reap tax benefits if you do. In most states, you must contribute to its plan to claim tax deductions or credits on your state income tax return. You don’t even need to itemize to receive a state tax benefit on offer. Just check whether a plan allows only the account owner (such as a parent or grandparent) to claim a tax benefit or allows any account contributor (for example, a relative or friend) to do so.
Why would you choose a plan from a different state than your own? A few reasons include lower administrative fees, stronger plan performance, preferable investment options, and no minimum or maximum contribution amounts.
If timing flexibility is important to you, check a state’s 529 plan on deadlines to contribute. Most require you to contribute by December 31 of the year you’re claiming a deduction or credit, though some states extend deadlines until Tax Day—usually April 15—of the next year.
Watch for a 1099-Q
Those who receive distributions from 529 plans receive a 1099-Q form for each plan’s distribution. In most cases, this form is informational, but beneficiaries who withdraw more than their adjusted qualified education expenses may need to report that information on their tax return when they file it.
529 contribution deadlines and annual limits
Each state and plan has its own contribution deadlines and annual limits. Visit the state’s 529 page (often linked through a state treasury’s website) to see these regulations.