529 plan: what your contribution saves on your state taxes in 2026
Pick your state, type your income and the amount you plan to put in. The answer uses your state’s own rule, read on its site and dated.
2026 rules of the 50 states and DC · How we calculate · Who publishes this
New York tax saved on this contribution
$324
5.4 % of what you put in comes back on your 2025 return.
| Subtracted from state income | $6,000 |
| Your state marginal rate | 5.40 % |
| Cap that applies this year | $10,000 |
| Back per $1,000 contributed | $54 |
New York: Subtraction for contributions made as account owner to New York's 529 College Savings Program, up to $5,000 ($10,000 married filing jointly) per year (IT-201 line 30). Read on 2026-10-19. No federal deduction exists for 529 contributions.
| Taxable income | Marginal rate | Tax saved |
|---|---|---|
| $50,000 | 5.40 % | $324 |
| $100,000 | 5.40 % | $324 |
| $200,000 | 5.90 % | $354 |
| $400,000 | 6.85 % | $411 |
A 529 plan is a state-sponsored investment account for education: the money grows free of federal tax and comes out tax-free when it pays qualified costs, from college tuition to up to $20,000 a year of K-12 costs per child from 2026. There is no federal deduction for putting money in. The deduction or credit, when there is one, is on your state return, and it is where families differ most. 33 of the states with an income tax give a deduction, 5 a credit or a choice, 4 nothing, and 9 have no income tax on wages at all. For a married couple with $120,000 of taxable income putting $6,000 into a plan for one child, the saving runs from $1,200 in Indiana to nothing in 13 states. Your own figure depends on your state's rule, its tax rate at your income, the cap, and whether a plan from another state counts. The calculator gives it in one step.
Fifty-one rules, five kinds
Credit on the tax bill
A share of the contribution comes off the tax itself.
Deduction, any state’s plan
The deduction follows you to another state’s plan.
7 states: Arizona, Kansas, Maine, Missouri, Montana, Ohio, Pennsylvania.
Deduction, home plan only
Only the state’s own plan earns the deduction.
26 states: Alabama, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Nebraska, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Rhode Island, South Carolina, Virginia, West Virginia, Wisconsin.
Income tax, no 529 break
Earnings still grow free of state tax if used for school.
4 states: California, Hawaii, Kentucky, North Carolina.
No income tax on wages
Nothing to deduct; pick a plan on fees alone. In brackets, the balance limit of the state’s own plan.
9 states: Alaska (plan limit $550,000), Florida (plan limit $500,000), Nevada (plan limit $575,000), New Hampshire (plan limit $650,580), South Dakota (plan limit $350,000), Tennessee, Texas (plan limit $500,000), Washington (plan limit $500,000), Wyoming.
Same federal rules everywhere, different state rules
Every 529 account in the country follows the same federal law, section 529 of the Internal Revenue Code. Contributions go in after federal tax, earnings are never taxed while they stay in the account, and withdrawals that pay qualified education costs come out with no federal tax at all. A withdrawal used for something else is taxed on its earnings part, plus a 10 % additional tax. Those rules do not depend on where you live or which state runs the plan.
The state layer sits on top. Most states with an income tax give something back when you contribute, but the shape varies: a deduction from income, worth your state marginal rate; a credit, worth a fixed share of what you put in; a cap per return, per taxpayer or per child; and in many states, nothing at all for a plan run by another state. The same $6,000 gives very different results for the same couple at $120,000:
| State | Rule | Tax saved on $6,000 |
|---|---|---|
| Colorado | Deduction | $264 |
| Illinois | Deduction | $297 |
| Indiana | Credit | $1,200 |
| Virginia | Deduction | $230 |
| Utah | Credit | $228 |
| Arizona | Deduction | $100 |
| Minnesota | Credit or deduction | $284 |
| Massachusetts | Deduction | $100 |
| California | None | $0 |
| Texas | No income tax | $0 |
A credit state pays a share of the contribution itself, so the result does not depend much on income. A deduction state pays your marginal rate on the part under the cap, so a higher earner in a graduated state gets more. In a flat-rate state the rate is the same for everyone: an Illinois couple saves $297 on $6,000 at $120,000 of income and $297 at $480,000.
Try a higher income in your state
Colorado tax saved on this contribution
$528
| Subtracted from state income | $12,000 |
| Your state marginal rate | 4.40 % |
| Cap that applies this year | $39,200 |
| Back per $1,000 contributed | $44 |
Three numbers decide what you get back
Your state marginal rate
A deduction removes dollars from the top of your income, so it is worth the rate those dollars would have been taxed at. When a large deduction crosses a bracket boundary, part of it is worth the lower rate. The calculator computes the tax with and without the deduction on your state's own brackets instead of multiplying by the top rate, which is why its figure is sometimes a few dollars below a quick estimate.
The cap and what it is counted per
Caps range from a few hundred dollars to no cap at all, and the unit matters as much as the amount. A cap per return does not grow with the number of children. A cap per beneficiary does: a family with three children in a per-child state can deduct three times as much. Some states let you carry the excess forward to later years, which helps after a large gift. The contribution limits page puts the federal gift rules and state caps side by side.
Whether another state's plan counts
Of the states with a 529 benefit, 8 give it for any state’s plan; that is called tax parity. Elsewhere, only the home plan counts. An Arizona couple who use another state's plan keep $100 of their saving; an Illinois couple keep nothing. The home plan or another state page turns the lost deduction into the fee difference another plan would have to beat.
What the account itself is worth
The state break is a yearly bonus. The larger effect over time is the absence of tax on growth. $500 a month for fifteen years at a 6 % yearly return, an assumption and not a forecast, grows to $143,456 in a 529. The same money in a taxable brokerage account, with dividends taxed each year and the gain taxed at sale for an Illinois couple at $120,000, leaves $132,073 after tax. The 529 calculator runs this comparison for your state, your child's age and your own return assumption, and adds the state saving year by year.
What changed for 2026
Public Law 119-21, signed on July 4, 2025, changed four things that matter for families with a 529:
- The yearly K-12 limit doubled, from $10,000 to $20,000 per beneficiary, for tax years starting in 2026, and K-12 costs now include curriculum, books, online materials, qualified tutoring, standardized and AP test fees, dual enrollment and educational therapies (K-12 withdrawals).
- Postsecondary credential programs, the kind that lead to an industry-recognized license or certificate, became qualified (credential programs).
- Rollovers from a 529 to an ABLE account for a person with a disability became permanent (529 to ABLE).
- A new kind of account for children, the Trump account, opens to contributions on July 4, 2026 (Trump account).
States decide for themselves whether to follow. California, Colorado, Hawaii, Illinois, Michigan, Minnesota, Nebraska, New York, Oregon, Vermont still treat K-12 withdrawals as non-qualified on their own return, as read on their sites. Each state page says what the state has written about the new rules and when we read it.
Calculators by task
State tax breaks
- 529 tax deduction by state: All 51 rules side by side
- Tax parity states: States that reward any state’s plan
- State add-backs (recapture): When a state takes its 529 deduction back
- Another state’s 529 plan: Lower fees elsewhere against the deduction you give up
Saving and growth
- 529 calculator: Balance at 18, your state break each year, and the gap with a brokerage account
- How much to save: The monthly deposit behind a college target, with your own cost rise and return
- 529 contribution limits: $19,000 gift exclusion, five-year election, plan maximums
- 529 superfunding: Up to $95,000 per giver per child at once, and why the state cap rarely follows
- Grandparent 529: Owning the account or giving to the parents’, the state break, gifts and the estate
Spending the money
- K-12 tuition from a 529: $20,000 a year per child from 2026, and your state's view
- Qualified 529 expenses: The IRS list, item by item, and where housing stops counting
- Credential programs: Licenses, certifications, exam and renewal fees since July 2025
- Student loans from a 529: $10,000 per borrower, for life
- Non-qualified withdrawals: Tax on the earnings, plus 10 %, and the exceptions
- 529 and education credits: Keep $4,000 out of the 529 for the $2,500 credit
- Leftover 529 money: Seven exits for an unused balance, from cheapest to costliest
- 529 to Roth IRA rollover: Up to $35,000 per beneficiary, one IRA limit at a time
- 529 to ABLE rollover: Permanent from 2026, inside the $20,000 yearly ABLE limit
529 or something else
- 529 vs taxable account: After-tax result at five incomes, and the price of not spending the 529 on school
- 529 or Roth IRA for college: A parent’s Roth IRA as a college fund, counted in dollars
- 529 or Coverdell ESA: $2,000 a year against no fixed cap, and the K-12 costs only one pays
- Custodial Roth IRA: A working teenager’s Roth: earned income or $7,500, whichever is less
- Trump account and a 529: $5,000 a year from July 4, 2026, set against a 529 for college
Before you open or move an account
Opening an account in another state
You can usually open another state's savings plan; each plan's disclosure says who may open an account. The question is what you give up at home. In a state without parity, the deduction disappears, and the gap adds up every year you contribute. In a parity state, or a state with no income tax, the choice can rest on fees and investment options alone. The parity states page lists them with their caps.
Moving to another state with a 529
The account does not move with you and does not need to: it stays in the plan where it was opened. What changes is the state return. Your new state's deduction, if any, applies to new contributions only where its own rules allow that plan. Your former state may add back earlier deductions if you roll the money to another state's plan; 17 states do so according to their texts. The recapture page shows the cost before you move the account.
When the money is not used for school
Unused money has more exits than it used to. The account can switch to another family member, pay for graduate school at any age, pay up to $10,000 of student loans per borrower, or move to a Roth IRA for the beneficiary, up to $35,000 over a lifetime, once the account has been open 15 years. A plain withdrawal is taxed on its earnings part with the 10 % additional tax, which a tax-free scholarship waives up to its amount. The leftover money page compares the options.
Gifts from grandparents and others
Anyone can contribute to a child's 529, and each giver can put in up to $19,000 in 2026 without filing a gift tax return. A larger lump sum can be spread over five years on Form 709, up to $95,000 per giver and per child. Whether the giver gets a state deduction depends on the giver's own state, not the child's. The five-year election page computes the room for a couple or for several grandchildren.
A 529 or something else
A 529 wins for money that will pay for education. A taxable account keeps every option open but pays tax every year. A Roth IRA in a parent's name doubles as retirement money. A Coverdell account allows only $2,000 a year and closes at higher incomes. The comparison pages put the same deposit in each: 529 or taxable account, 529 or Roth IRA, 529 or Coverdell.
Questions parents ask
Is there a federal tax deduction for 529 plan contributions in 2026?
No. Contributions to a 529 plan are made with money already taxed by the federal government, and no line of the federal return lets you deduct them. The federal advantage comes later: earnings grow untaxed and come out tax-free when they pay qualified education costs. Any deduction or credit for the contribution itself is on your state return, if your state offers one.
Do I have to use my own state’s 529 plan?
No. Any state's plan is open to you, but your own state may give its deduction or credit only for its own plan. 8 states with a 529 benefit accept any state's plan, and states without an income tax have no break to lose. Elsewhere, choosing another plan means giving up the yearly state saving, which lower fees would have to make up.
How is the 529 state tax saving calculated for a joint return?
For a deduction, the state tax on your income is computed with and without the deductible part of the contribution, on the state's joint brackets and joint cap. For a credit, the state's rate is applied to the contribution, up to the joint maximum and within the state tax you owe. Some states double the cap on a joint return, some only if each spouse contributes, and some keep one cap per return.
Can a 529 plan pay for private school tuition in 2026?
Yes, up to $20,000 a year per child free of federal tax from January 1, 2026, for tuition at a public, private or religious K-12 school and several related costs. Your state may still treat the withdrawal as non-qualified on its own return and add back earlier deductions, so check your state's page before paying tuition from the account.
What happens to the state deduction if I move my 529 to another state’s plan?
Several states add the earlier deductions back to your income when the money leaves their plan for another state's, and tax them at your current rate. Others say nothing about it or only recapture within a short period after opening. The state pages show what each state's text says, and the recapture calculator turns your past deductions into the tax at stake.
Is a 529 calculator result a promise of what the account will be worth?
No. The growth part rests on a yearly return you choose, which is an assumption and not a forecast; markets can fall in the years before college. The state saving part is firmer: it follows your state's written rule for 2026 and the income you type. Both are estimates for planning and not tax or investment advice for your situation.
Where these rules are written
- Public Law 119-21 (July 4, 2025), sections 70117, 70204, 70413 and 70414, text on congress.gov
- 26 U.S.C. 529, qualified tuition programs (govinfo.gov)
- IRS Publication 970 (2025), Tax Benefits for Education, chapter 7
- IRS, 529 plans: questions and answers (updated Jan. 30, 2026)
- Rev. Proc. 2025-32, 2026 brackets, capital gains thresholds, gift exclusion and ABLE limit
Worked out by Radif Partners
Independent publisher of 529 plan calculators built on the tax rules of the 50 states, DC and the Internal Revenue Code
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Results are estimates built from each state’s published rule, your figures and the assumptions you set (return, cost rise). They are not tax, legal or investment advice for your own case; your state revenue department or a tax professional can confirm it. Nobody pays us to point you to a plan.
Tax year 2026, state and federal rules last read on