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529 plans have offered families tax-deferred college savings and tax-free withdrawals for college expenses for over 20 years. Families can also withdraw up to $10,000 tax-free from a 529 plan to pay 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 education?
Although the Tax Cuts and Jobs Act (TCJA) 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. Some states consider K-12 tuition a non-qualified 529 plan expense. The earnings portion of a non-qualified 529 plan distribution may be subject to state income taxes and recapture of state income tax breaks attributable to the distribution.
However, residents of over 30 states are eligible for an income tax deduction or credit for 529 plan contributions used to pay for college or K-12 tuition. The value of a 529 plan income tax benefit will vary depending on where you live and how much you contribute. In Missouri, for example, married couples are eligible for a state income 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 expenses.
States that offer a state income tax deduction or credit and allow 529 plans to pay for K-12
The states listed below offer a tax deduction for contributing to a 529 plan and also allow 529 plans to pay for k-12 education:
State |
Annual 529 Plan Tax Benefit |
Alabama |
Contributions to an Alabama 529 plan up to $5,000 ($10,000 if married) are deductible. |
Arizona |
Contributions to any state’s 529 plan up to $2,000 ($4,000 if married) 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 of $7,500 ($15,000) are deductible. |
Connecticut |
Contributions to a Connecticut 529 plan up to $5,000 ($10,000 if married) are deductible. |
Delaware |
Contributions to a Deleware 529 plan up to $1,000 ($2,000 if married) are deductible. |
District of Columbia |
Contributions to a DC 529 plan up to $4,000 ($8,000 if married) are deductible. |
Georgia |
Contributions to a Georgia 529 plan up to $42,000 ($84,000 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 $3,785 ($7,570 if married) are deductible. |
Kansas |
Contributions to any state’s 529 plan up to $3,000 ($6,000 if married) are deductible. |
Louisiana |
Contributions to a Louisiana 529 plan up to $2,400 ($4,800 if married) are deductible. |
Maine |
Contributions to any state’s 529 plan up to $1,000 (any filing status) are deductible. |
Maryland |
Contributions to a Maryland 529 plan up to $2,500 ($5,000 if married) are deductible, with a 10-year carryforward. |
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. |
Montana |
Contributions to any state’s 529 plan up to $3,000 ($6,000 if married) are deductible. |
New Jersey |
Contributions to a New Jersey 529 plan up to $10,000 (any filing status) are deductible. |
New Mexico |
Contributions to a New Mexico 529 plan are fully 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 a 5-year carryforward. |
Pennsylvania |
Contributions to any state’s 529 plan up to the gift tax exclusion amount ($18,000 for individuals and $36,000 for married couples in 2024) 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 $2,290 ($4,580 if married) per year in contributions to a Utah 529 plan can be claimed against Utah income tax. |
Vermont |
A 10% tax credit on up to $2,500 ($5,000 if married) can be claimed against Vermont income tax. |
Virginia |
Contributions to a Virginia 529 plan up to $4,000 (any filing status) are deductible, with an unlimited carryforward |
West Virginia |
Contributions to a West Virginia 529 plan are fully deductible. |
Wisconsin |
Contributions to a Wisconsin 529 plan up to $3,860 (any filing status) are deductible, with an unlimited carryforward |
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. Still, there is no state tax benefit because these states have no state income tax.
What happens if your state is not on the list?
If your state has not yet conformed to the new tax law, you can still 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 income tax 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, but some states offer savings options specifically designed for K-12.
- Louisiana’s START K12 program is a qualified tuition plan that allows Louisiana residents to save for tuition expenses at Louisiana K-12 schools. The START K12 program offers many of the same tax benefits as Louisiana’s START Saving Program. However, contributions to a START K12 plan are not eligible for a state tax deduction.
- The Kentucky Education Savings Plan Trust (KESPT), available nationwide, offers 529 plan investment options to accommodate better families saving for K-12.
Families who initially set up a 529 plan for college and have decided to use some of the funds for pre-college expenses may consider adjusting their investment strategy for a shorter time horizon. For example, investment allocations automatically shift over time with an age-based portfolio based on the beneficiary’s age and when they begin college. Most families select an option heavily weighted toward equities when the beneficiary is young and shift toward more conservative fixed-income options over time. Families also have the option to open a separate 529 plan to pay for a child’s K-12 tuition.
