529 Plan State Tax Benefits
34 states offer income tax deductions
Federal Tax Benefits
Tax-free growth: No federal taxes on investment gains
Tax-free withdrawals: When used for qualified education expenses
Gift tax advantages: Up to $19,000/beneficiary or $95,000 superfunding
Top State Tax Deductions
| State | Single Deduction | Married Deduction |
|---|---|---|
| New York | $10,000 | $20,000 |
| Pennsylvania | Unlimited | Unlimited |
| Illinois | $10,000 | $20,000 |
| Ohio | $4,000 | $8,000 |
| Virginia | $4,000 | $8,000 |
* Most states require contributing to in-state plan for deduction
Superfunding (5-Year Gift Election)
Contribute up to 5 years of gifts at once without gift tax:
Single Donor
$95,000
per beneficiary
Married Couple
$190,000
per beneficiary (gift-splitting)
States Without Income Tax Deduction
No deduction (no state income tax or no 529 deduction):
Alaska, California, Delaware, Florida, Hawaii, Kentucky, Maine, Nevada, New Hampshire, New Jersey, North Carolina, South Dakota, Tennessee, Texas, Washington, Wyoming
These residents can still benefit from tax-free growth and can choose any state's plan.
Account Limits
Annual Gift Exclusion
$19,000
per donor, per beneficiary
Average Account Limit
$350,000
varies by state
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Tax benefits vary by state. Consult a tax professional.