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529 Plan State Tax Deductions – Tax Deductions for Contributing to a 529 Plan

Does Your State Offer a Section 529 Plan Deduction for College Savings?

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While there is no Federal income tax deduction for contributions to a Section 529 College Plan, many states offer a 529 plan deduction to their residents.

Most times, this benefit is reserved for residents who save money in their home state’s plan. Currently Arizona, Kansas, Maine, and Pennsylvania offer deductions for putting money into another state’s plan.

For 2009, the maximum 529 plan deduction amounts (click on individual states for more info) are as follows:

Alabama - $5,000 per contributor

Arkansas - $5,000 per contributor

Arizona - $750 per contributor

Colorado - Full amount of contribution

Connecticut - $5,000 per contributor

Wash. D.C. - $4,000 per contributor

Georgia - $2,000 per child

Idaho - $4,000 per contributor

Illinois - $10,000 per contributor

Indiana - 20% tax credit up to $1,000

Iowa - $2,685 per beneficiary

Kansas - $3,000 per contributor, per child

Louisiana - $2,400 per contributor

Maine - $250 per child

Maryland - $2,500 per beneficiary

Michigan - $5,000 per contributor

Mississippi - $10,000 per contributor

Missouri - $8,000 per contributor

Montana - $3,000 per contributor

Nebraska - $5,000 per tax return

New Mexico - Full amount of contribution

New York - $5,000 per contributor

N. Carolina - $2,500 per contributor

Ohio - $2,000 per child, per donor

Oklahoma - $10,000 per contributor

Oregon - $2,000 per contributor

Pennsylvania - $13,000 per child, per contributor

Rhode Island - $500 per contributor

S. Carolina - Full amount of contribution

Utah - 5% tax credit on max of $1,740 tuition per beneficiary

Vermont - 10% credit ($250 max.) per child, per contributor

Virginia - $4,000 per account, per year (unlimited over age 70)

W. Virginia - Full amount of contribution

Wisconsin - $3,000 per dependent, grandchild, or self

Notes:

-“Per contributor” implies that a couple filing jointly would get twice the amount listed.

- AL, FL, NV, SD, TX, WA, and WY have no state income tax and thus offer no deductions.

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