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15 states with the biggest 529 tax breaks
https://www.savingforcollege.com/articles/these-states-offer-the-most-generous-529-tax-savings-1050

Originally Posted: 2017-04-19 Updated: 2017-08-16

by Kathryn Flynn

Thinking of opening a 529 plan? While you can invest in almost any state's program no matter where you live, it's smart to check out your home state's plan(s) first to see if it offers any tax incentives for residents. Over 30 states offer a tax deduction or credit for 529 plan contributions, but most require that you contribute to your home state's plan to be eligible.

This slideshow highlights the 15 states that offer the most generous tax benefits for college savers. Don't see your state? Check out our interactive state map map on savingforcollege.com.

Even if your state doesn't offer a 529 tax break, a 529 plan is still the best way to save for higher education. With average college costs surpassing $20,000 for a public in-state school ($45,000 for private universities), federal tax-free investment growth and tax-free withdrawals for college expenses can help boost your savings and prepare for rising costs.

RELATED: How much is your state’s 529 tax benefit really worth?

happy toddlers

Start Slideshow

Water Slide

15. Missouri

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $108
  • 529 tax benefits for residents:
    • Contributions to Missouri AND non-Missouri 529 plans of up to $8,000 per year by an individual, and up to $16,000 per year by a married couple filing jointly, are deductible in computing Missouri taxable income.
  • Available 529 plans:
    • MOST- Missouri’s 529 College Savings Plan (Direct-sold) Plan Details

    bike riding

    14. Wisconsin

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $113
    • 529 tax benefits for residents:
      • Contributions to a Wisconsin 529 plan of up to $3,100 per beneficiary per year (any filing status) are deductible in computing Wisconsin taxable income, with an unlimited carryforward of excess contributions.
    • Available 529 plans:

    NY Child

    13. New York

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $116
  • 529 tax benefits for residents:
    • Contributions to a New York 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing New York taxable income.
  • Available 529 plans:

face painting

12. West Virginia

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $117
  • 529 tax benefits for residents:
    • Contributions to West Virginia's 529 plans are fully deductible in computing West Virginia taxable income.
  • Available 529 plans:
    • SMART529 Select
    • SMART529 WV Direct College Savings Plan
    • The Hartford SMART529 Find a 529 Pro

reading outside

11. Nebraska

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $123
  • 529 tax benefits for residents:
    • Contributions to a Nebraska 529 plan of up to $5,000 by an individual, and up to $10,000 by a married couple filing jointly, are deductible in computing Nebraska taxable income.
  • Available 529 plans:
  • Nebraska Education Savings Trust Enroll Now
  • TD Ameritrade 529 College Savings Plan
  • Nebraska Education Savings Trust – Advisor College Savings Plan Find a 529 Pro
  • State Farm College Savings Plan Find A 529 Pro

cow with kids

10. Montana

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $124
  • 529 tax benefits for residents:
    • Contributions to Montana AND non-Montana 529 plans of up to $3,000 per year by an individual, and up to $6,000 per year by a married couple filing jointly, are deductible in computing Montana taxable income.
  • Available 529 plans:
    • Achieve Montana
    • Montana Family Education Savings Program

showlace

9. Arkansas

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $124
  • 529 tax benefits for residents:
    • Contributions to an Arkansas 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Arkansas taxable income, with a four-year carryforward of excess contributions.
    • Contributions to a NON-Arkansas plan of up to $3,000 per year by an individual, and up to $6,000 per year by a married couple filing jointly, are deductible.
    • Rollover contributions from another state's plan are deductible in the amount of $7,500 per individual and $15,000 per couple.
    • Employers are allowed a $500 deduction per employee for 529 matches into Arkansas plans.
  • Available 529 plans:

beach children

8. South Carolina

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $126
  • 529 tax benefits for residents:
    • Contributions, including rollover contributions, to a South Carolina 529 plan are fully deductible in computing South Carolina taxable income.
  • Available 529 plans:
    • Future Scholar 529 College Savings Plan (Direct-sold) Enroll Now
    • Future Scholar 529 College Savings Plan (Advisor-sold) Find a 529 Pro

skiing

7. Minnesota

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $127
  • Minnesota taxpayers may claim either a tax deduction or a tax credit for contributions to any state’s 529 plan:
    • A $1,500 tax deduction ($3,000 for a married couple filing jointly) can be claimed against Minnesota income tax.
    • A tax credit equal to 50% of contribution (maximum yearly credit is $500), reduced by any withdrawals, may be claimed against Minnesota income tax. Eligibility is based on income level, with families earning at least $75,000 subject to a phase out schedule.
  • Available 529 plans:

Snow Pile of Children

6. Idaho

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $133
  • 529 tax benefits for residents:
    • Contributions to the Idaho 529 plan of up to $6,000 per year by an individual, and up to $12,000 per year by a married couple filing jointly, are deductible in computing Idaho taxable income.
  • Available 529 plans:
    • Idaho College Savings Program (IDeal) Enroll Now

Art Project

5. District of Columbia

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $153
  • 529 tax benefits for residents:
    • Contributions to the DC College Savings Plan of up to $4,000 per year by an individual, and up to $8,000 per year by a married couple filing jointly, are deductible in computing District of Columbia taxable income, with a five-year carryforward of excess contributions.
  • Available 529 plans:
    • DC College Savings Plan

camp fire

4. Oregon

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $162
  • 529 state tax benefits:
    • Contributions to an Oregon 529 plan of up to $2,330 (for 2017) by an individual, and up to $4,660 by a married couple filing jointly, are deductible in computing Oregon taxable income, with a four-year carryforward of excess contributions. 
  • Available 529 plans:

farmer children

3. Iowa

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $162
  • 529 state tax benefits:
    • Contributions to an Iowa 529 plan of up to $3,239 for 2017 per beneficiary by an individual, and up to $6,478 per beneficiary by married taxpayers filing jointly, are deductible in computing Iowa taxable income.
  • Available 529 plans:

maple syrup

2. Vermont

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $180
  • 529 state tax benefits for residents:
    • Contributions to the Vermont 529 plan of up to $2,500 per beneficiary per year by an individual, and up to $5,000 per beneficiary per year by a married couple filing jointly, are eligible for a 10% Vermont income tax credit (up to $250 per beneficiary per individual taxpayer or $500 per beneficiary for married taxpayers filing jointly).
  • Available 529 plans:
    • Vermont Higher Education Investment Plan

side walk chalk drawing

1. Indiana

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $360
  • 529 state tax benefits for residents:
    • A 20% tax credit on up to $5,000 per year in contributions to an Indiana 529 plan can be claimed against Indiana income tax (maximum yearly credit is $1,000). 
  • Available 529 plans:

Thinking of opening a 529 plan? While you can invest in almost any state's program no matter where you live, it's smart to check out your home state's plan(s) first to see if it offers any tax incentives for residents. Over 30 states offer a tax deduction or credit for 529 plan contributions, but most require that you contribute to your home state's plan to be eligible.

This slideshow highlights the 15 states that offer the most generous tax benefits for college savers. Don't see your state? Check out our interactive state map map on savingforcollege.com.

Even if your state doesn't offer a 529 tax break, a 529 plan is still the best way to save for higher education. With average college costs surpassing $20,000 for a public in-state school ($45,000 for private universities), federal tax-free investment growth and tax-free withdrawals for college expenses can help boost your savings and prepare for rising costs.

RELATED: How much is your state’s 529 tax benefit really worth?

happy toddlers

Start Slideshow

Water Slide

15. Missouri

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $108
  • 529 tax benefits for residents:
    • Contributions to Missouri AND non-Missouri 529 plans of up to $8,000 per year by an individual, and up to $16,000 per year by a married couple filing jointly, are deductible in computing Missouri taxable income.
  • Available 529 plans:
    • MOST- Missouri’s 529 College Savings Plan (Direct-sold) Plan Details

bike riding

14. Wisconsin

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $113
  • 529 tax benefits for residents:
    • Contributions to a Wisconsin 529 plan of up to $3,100 per beneficiary per year (any filing status) are deductible in computing Wisconsin taxable income, with an unlimited carryforward of excess contributions.
  • Available 529 plans:

NY Child

13. New York

  • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $116
  • 529 tax benefits for residents:
    • Contributions to a New York 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing New York taxable income.
  • Available 529 plans:
  • face painting

    12. West Virginia

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $117
    • 529 tax benefits for residents:
      • Contributions to West Virginia's 529 plans are fully deductible in computing West Virginia taxable income.
    • Available 529 plans:
      • SMART529 Select
      • SMART529 WV Direct College Savings Plan
      • The Hartford SMART529 Find a 529 Pro

    reading outside

    11. Nebraska

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $123
    • 529 tax benefits for residents:
      • Contributions to a Nebraska 529 plan of up to $5,000 by an individual, and up to $10,000 by a married couple filing jointly, are deductible in computing Nebraska taxable income.
    • Available 529 plans:
    • Nebraska Education Savings Trust Enroll Now
    • TD Ameritrade 529 College Savings Plan
    • Nebraska Education Savings Trust – Advisor College Savings Plan Find a 529 Pro
    • State Farm College Savings Plan Find A 529 Pro

    cow with kids

    10. Montana

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $124
    • 529 tax benefits for residents:
      • Contributions to Montana AND non-Montana 529 plans of up to $3,000 per year by an individual, and up to $6,000 per year by a married couple filing jointly, are deductible in computing Montana taxable income.
    • Available 529 plans:
      • Achieve Montana
      • Montana Family Education Savings Program

    showlace

    9. Arkansas

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $124
    • 529 tax benefits for residents:
      • Contributions to an Arkansas 529 plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Arkansas taxable income, with a four-year carryforward of excess contributions.
      • Contributions to a NON-Arkansas plan of up to $3,000 per year by an individual, and up to $6,000 per year by a married couple filing jointly, are deductible.
      • Rollover contributions from another state's plan are deductible in the amount of $7,500 per individual and $15,000 per couple.
      • Employers are allowed a $500 deduction per employee for 529 matches into Arkansas plans.
    • Available 529 plans:

    beach children

    8. South Carolina

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $126
    • 529 tax benefits for residents:
      • Contributions, including rollover contributions, to a South Carolina 529 plan are fully deductible in computing South Carolina taxable income.
    • Available 529 plans:
      • Future Scholar 529 College Savings Plan (Direct-sold) Enroll Now
      • Future Scholar 529 College Savings Plan (Advisor-sold) Find a 529 Pro

    skiing

    7. Minnesota

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $127
    • Minnesota taxpayers may claim either a tax deduction or a tax credit for contributions to any state’s 529 plan:
      • A $1,500 tax deduction ($3,000 for a married couple filing jointly) can be claimed against Minnesota income tax.
      • A tax credit equal to 50% of contribution (maximum yearly credit is $500), reduced by any withdrawals, may be claimed against Minnesota income tax. Eligibility is based on income level, with families earning at least $75,000 subject to a phase out schedule.
    • Available 529 plans:

    Snow Pile of Children

    6. Idaho

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $133
    • 529 tax benefits for residents:
      • Contributions to the Idaho 529 plan of up to $6,000 per year by an individual, and up to $12,000 per year by a married couple filing jointly, are deductible in computing Idaho taxable income.
    • Available 529 plans:
      • Idaho College Savings Program (IDeal) Enroll Now

    Art Project

    5. District of Columbia

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $153
    • 529 tax benefits for residents:
      • Contributions to the DC College Savings Plan of up to $4,000 per year by an individual, and up to $8,000 per year by a married couple filing jointly, are deductible in computing District of Columbia taxable income, with a five-year carryforward of excess contributions.
    • Available 529 plans:
      • DC College Savings Plan

    camp fire

    4. Oregon

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $162
    • 529 state tax benefits:
      • Contributions to an Oregon 529 plan of up to $2,330 (for 2017) by an individual, and up to $4,660 by a married couple filing jointly, are deductible in computing Oregon taxable income, with a four-year carryforward of excess contributions. 
    • Available 529 plans:

    farmer children

    3. Iowa

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $162
    • 529 state tax benefits:
      • Contributions to an Iowa 529 plan of up to $3,239 for 2017 per beneficiary by an individual, and up to $6,478 per beneficiary by married taxpayers filing jointly, are deductible in computing Iowa taxable income.
    • Available 529 plans:

    maple syrup

    2. Vermont

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $180
    • 529 state tax benefits for residents:
      • Contributions to the Vermont 529 plan of up to $2,500 per beneficiary per year by an individual, and up to $5,000 per beneficiary per year by a married couple filing jointly, are eligible for a 10% Vermont income tax credit (up to $250 per beneficiary per individual taxpayer or $500 per beneficiary for married taxpayers filing jointly).
    • Available 529 plans:
      • Vermont Higher Education Investment Plan

    side walk chalk drawing

    1. Indiana

    • Estimated annual tax savings for married parents earning $100,000 per year who contribute $100 to each of their two children's 529 plans: $360
    • 529 state tax benefits for residents:
      • A 20% tax credit on up to $5,000 per year in contributions to an Indiana 529 plan can be claimed against Indiana income tax (maximum yearly credit is $1,000). 
    • Available 529 plans:
     

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