How much can you contribute to a 529 plan in 2019?

Kathryn Flynn
By: Kathryn Flynn

Annual contribution limit for 529 plans

In 2019, many families are trying to make the most of their tax-advantaged savings accounts. If you're saving for retirement, you're allowed to deposit up to $6,000 to an IRA ($7,000 if you're over age 50) and up to $19,000 to an employer-sponsored 401(k). But what about college funds? That's where it can get tricky. While the IRS doesn't specify a specific dollar amount for annual contribution limits to 529 college savings plans, there are some rules you should be aware of if you're considering making a large deposit this year:

Annual gift tax exclusion

One of the many benefits of saving for a child's future college education with a 529 plan is that contributions are considered gifts for tax purposes. In 2019, gifts totaling up to $15,000 per individual will qualify for the annual exclusion, the same as in 2018 and up from $14,000 in 2017. This means if you and your spouse have three grandchildren (or children) you can gift $90,000 without gift-tax consequences, since each child can receive $15,000 in gifts from you and $15,000 in gifts from your spouse. Remember, this also includes non-529 gifts so be sure to include any cash or property gifts in your total.

If your total gifts to an individual will be more than $15,000 this year, the excess amount will have to be reported on Form 709 when you file your taxes in 2019. There is no joint gift-tax return, so you and your spouse will each have to file separately.

The 5-year election

You may have read that you can contribute as much as $75,000 to a 529 plan without incurring gift taxes. This is absolutely true, as long as your contribution is at least $15,000. The lump sum contribution will be treated as though it were spread out over the next five years, so if you deposit $50,000 it will be applied as $10,000 each year, leaving you with $5,000 in unused annual exclusion.

This is often a great estate-tax planning strategy for parents and grandparents. They're able to shelter a large amount of assets from estate taxes, while retaining control of the funds in the 529 account. However, if you do end up changing your mind down the road and revoking the funds in the account they will be added back to your taxable estate.

Lifetime gift tax exemption amount

Does this mean if you contribute more than $15,000 in one year or $75,000 over five years you'll have to pay gift tax? Not necessarily. As mentioned above, any gifts above the annual exclusion amounts will have to be reported on the federal tax Form 709, and these will be counted against the lifetime exclusion (currently $11.4 million per individual in 2019). Any amounts that exceed the exclusion could trigger gift taxes of up to 40%, but if you're within the limit you won't be subject to taxes.

Find your 529 plan - Select your state below

Did you know that residents are not limited to investing in their own state's plan? Another state may offer a plan that performs better and has lower fees. Select your state below to see your state's plan and other options.

Find a 529 plan in

Select your state below


Find a 529 Plan. Select your state below.

Did you know that residents are not limited to investing in their own state’s plan? Another state may offer a plan that performs better and has lower fees. Select your state below to see your state’s plan and other options.

529 plan limits

Unlike IRAs or 401(k)s, there are no annual contribution limits for 529 plans. However, there are maximum aggregate limits, which vary by plan. Under federal law, 529 plan balances cannot exceed the expected cost of the beneficiary's qualified higher education expenses. Limits vary by state, ranging from $235,000 to $529,000. This amount represents what the state believes to be the full cost of attending an expensive school and graduate school, including textbooks and room and board. If your plan is close to the limit don't worry about future earnings in the account pushing it over. The funds can remain in the account without penalty, but the family will not be able to make any future contributions unless a market drop brings the account balance back down.

State tax benefits

Over 30 states, including the District of Columbia, currently offer a state tax credit or deduction up to a certain amount. For example, contributions to a New York 529 plan of up to $5,000 per year by an individual or $10,000 per year by a married couple filing jointly are deductible in computing state income tax. But that doesn't mean New York parents are limited to contributing $10,000 to their 529 plan. If they choose to take advantage of the annual gift tax exclusion and deposit $15,000 this year, the entire amount will grow federal tax-free, but only they'll only be able to deduct the first $10,000 from their state income tax.

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Kathryn Flynn

Kathryn Flynn

Content Director

Kathryn is Content Director at She has been quoted in financial publications including the Wall Street Journal, the NY Times, Fortune, Money and GOBankingRates, and has been an expert guest on personal finance podcasts. Prior to, Kathryn worked in product marketing at Henderson Global Investors (now Janus Henderson Investors), a global asset manager. She earned her MBA with Finance Concentration from DePaul University's Kellstadt Graduate School of Business, and has prior FINRA Series 7 and 63 licenses. Kathryn has 529 college savings plans for each of her three children, and enjoys creating content to help other families prepare for future higher education costs.

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