The West Virginia 529 Plan Deduction for WV Residents

Rules for Claiming the Unlimited Tax Deduction for Funding a WV 529 Plan

Overview of the WV 529 Plan Tax Deduction:

West Virginia residents contributing to a West Virginia 529 Plan can deduct the entire amount of their contribution, up to the extent of their income. Unused deductions may be carried forward for a maximum of five years.

Value of the WV 529 Plan Tax Deduction:

West Virginia residents trying to decide whether to use a WV 529 plan versus another state's Section 529 plan need to account for the potential tax savings of contributing to their in-state plan. Considering that the top West Virginia income tax rate is 6.50%, each $1,000 contributed can save a taxpayer up to $65 at tax time.

West Virginia does not currently offer a tax deduction to residents contributing to out-of-state plans or other types of college savings accounts such as a Coverdell Education Savings Account (ESA) or UTMA Custodial Account.

Claiming the WV 529 Plan Tax Deduction:

Residents can claim the West Virginia 529 plan tax deduction on line 42 of their West Virginia Schedule M.

The West Virginia 529 Plan tax deduction is 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). There is no income phaseout on the WV 529 Plan tax deduction.

Reference and Documentation:

Additional information on the West Virginia 529 plan tax deduction can be found on the West Virginia Department of Revenue website.