Overview of the Kansas 529 Learning Quest Income Tax Deduction:
Kansas residents contributing to the Kansas 529 Learning Quest Plan receive a state income tax deduction of $3,000 per beneficiary. If a Kansas resident contributes on behalf of multiple beneficiaries (children), they are entitled to multiple deductions, up to the limit of $3,000 per child.Couples filing jointly may each claim the deduction separately, effectively doubling the amount joint taxpayers can contribute and still receive the deduction. For example, if a married couple has two children, each parent may deduct contributions of up to $3,000 per child, for a possible total deduction of $12,000 (2 children x $3000 maximum deduction x 2 parents).
The Kansas 529 Learning Quest deduction is actually an "above the line" income adjustment, meaning residents can claim it even if they do not itemize their other deductions (opting for the standard deduction).
Value of the Kansas 529 Learning Quest Plan Tax Deduction:
Kansas residents trying to decide whether or not they should use the Kansas 529 Learning Quest Plan versus other savings vehicles need to account for the potential tax savings of the Kansas income tax deduction. Remember, residents do not receive a Kansas income tax deduction for contributing to any other state's Section 529 plan.Considering that the top income tax bracket in Kansas is 6.45%, each $3,000 contribution to the Kansas 529 Learning Quest Plan may save a taxpayer up to $193.50 at tax time. While this is attractive, it still may not offset the benefits of using other non-deductible accounts such as a Coverdell Education Savings Account (ESA) or UTMA Custodial Account.
