Using a 529 plan to pay for K-12? These states offer tax benefits.

Kathryn FlynnBy: Kathryn FlynnBy: Savingforcollege.com | 

529 plans have offered families tax-free earnings growth and tax-free withdrawals for college expenses for over 20 years. And beginning in 2018, families can also withdraw up to $10,000 tax-free from a 529 plan to pay for up to $10,000 per year in K-12 tuition expenses. Some states also offer an additional tax benefit for families who use their 529 plan to pay for elementary or high school.

Which states offer 529 plan tax breaks for K-12 savers?

Although the Tax Cuts and Jobs Act expanded the definition of a qualified higher education expense to include up to $10,000 per year in tuition expenses at private, public and religious elementary and secondary schools, not all states have conformed to the new law. In fact, some states consider K-12 tuition a non-qualified 529 plan expense.

However, residents of 20 states are eligible for a tax deduction or credit for 529 plan contributions used to pay for college or K-12 tuition. The value of a 529 plan tax benefit will vary depending on where you live and much you contribute. In Missouri, for example, married couples are eligible for a state tax deduction for 529 plan contributions up to $16,000. That means a couple with $100,000 in taxable income who contributes $200 each month to a 529 plan can save $108 each year, whether they are paying for college tuition or K-12 tuition expenses.

States that offer a state income tax deduction or credit when 529 plans are used to pay for K-12

State

529 Plan Tax Benefit

Alabama

Contributions, including rollover contributions, to an Alabama 529 plan up to $5,000 ($10,000 if married and each make their own contributions) are deductible

Arkansas

Contributions to 1.) an Arkansas 529 plan up to $5,000 ($10,000 if married) 2.) a non-Arkansas plan up to $3,000 ($6,000) and 3.) rollover contributions $7,500 ($15,000) are deductible

District of Columbia

Contributions to a DC 529 plan of up to $4,000 ($8,000 if married and each make contributions to their own account) are deductible, with 5-year carryforward

Georgia

Contributions to a Georgia 529 plan up to $2,000 ($4,000 if married) are deductible

Idaho

Contributions to an Idaho 529 plan up to $6,000 ($12,000 if married) are deductible

Indiana

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.

Iowa

Contributions to an Iowa 529 plan up to $3,319 ($6,638 if married) are deductible

Kansas

Contributions to any state’s 529 plan up to $3,000 ($6,000 if married) are deductible

Maryland

Contributions to a Maryland 529 plan up to $2,500 ($5,000 if married) are deductible, with 10-year carry forward

Massachusetts

Contributions to a Massachusetts 529 plan up to $1,000 ($2,000 if married) are deductible

Mississippi

Contributions to a Mississippi 529 plan up to $10,000 ($20,000 if married) are deductible

Missouri

Contributions to any state’s 529 plan up to $8,000 ($16,000 if married) are deductible

North Dakota

Contributions to a North Dakota 529 plan up to $5,000 ($10,000 if married) are deductible

Ohio

Contributions to an Ohio 529 plan up to $4,000 (any filing status) are deductible

Oklahoma

Contributions to an Oklahoma 529 plan up to $10,000 ($20,000 if married) are deductible, with 5-year carry forward

Pennsylvania

Contributions to any state’s 529 plan up to the gift tax exclusion amount ($15,000 in 2018) are deductible.

Rhode Island

Contributions to a Rhode Island 529 plan up to $500 ($1,000 if married) are deductible

South Carolina

Contributions to a South Carolina 529 plan are fully deductible

Utah

A 5% tax credit on up to $1,960 ($3,920 if married) per year in contributions to an Utah 529 plan can be claimed against Utah income tax.

Virginia

Contributions to a Virginia 529 plan up to $4,000 (any filing status) are deductible, with an unlimited carry forward

West Virginia

Contributions to a West Virginia 529 plan are fully deductible.

Wisconsin

Contributions to a Wisconsin 529 plan up to $3,200 (any filing status) are deductible, with an unlimited carry forward

Some states do not offer state income tax deductions or tax credits for K-12 tuition, but distributions for K-12 tuition are state-tax free. These include Delaware, Kentucky, New Hampshire, North Carolina and Tennessee. In addition, 529 plans in Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming are eligible for K-12 distributions, but there is no state tax savings because there is no state income tax in these states.

What happens if your state is not on the list?

If your state has not yet conformed to the new tax law, you are still eligible to take federal tax-free withdrawals to pay for elementary or high school tuition. However, you may be subject to state income tax on the earnings portion, and any deductions or credits claimed may be subject to recapture. California also imposes a 2.5% state penalty tax on the earnings portion of non-qualified withdrawals, which includes distributions used to pay for K-12 tuition.

Which 529 plans can be used to pay for K-12 tuition?

Any 529 savings plan can be used to pay for college or up to $10,000 per year in elementary and high school tuition. Louisiana is currently the only state that will offer a separate education savings program specifically designed to save and pay for K-12 tuition. The START K12 program is under development, but in 2018 Louisiana residents can take a one-time distribution of up to $10,000 from their existing START accounts to pay for K-12 tuition. Keep in mind, however, that contributions to a START K12 plan are not eligible for a state tax deduction.


If you originally set up a 529 plan for college and have decided to use some of the funds for pre-college expenses, you may want to adjust your investment strategy for the shorter time horizon. For example, if you selected an age-based portfolio, your investment allocations will automatically shift over time based on the age of the beneficiary. Most families select an option that is heavily weighted toward equities when the beneficiary is young and shifts toward more conservative fixed income options over time. You also have the option to open a separate 529 plan to pay for your child’s K-12 tuition.

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.

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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.



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Kathryn Flynn

Kathryn Flynn

Content Director

Kathryn is Content Director at Savingforcollege.com. 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 Savingforcollege.com, 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.