Connecticut 529 tax deduction in 2026
Connecticut keeps the yearly cap modest but lets a large deposit be deducted piece by piece for years afterward.
Connecticut tax saved on this contribution
$600
6.0 % of what you put in comes back on your 2026 return.
| Subtracted from state income | $10,000 |
| Your state marginal rate | 6.00 % |
| Cap that applies this year | $10,000 |
| Back per $1,000 contributed | $60 |
Connecticut: Subtraction for contributions to all CHET accounts up to $5,000 (single, HOH, MFS) or $10,000 (joint) per year; excess carries forward 5 years within the same annual cap; rollovers in and Direct/Advisor transfers do not count. Read on 2026-10-19. No federal deduction exists for 529 contributions.
| Taxable income | Marginal rate | Tax saved |
|---|---|---|
| $50,000 | 4.50 % | $450 |
| $100,000 | 4.50 % | $450 |
| $200,000 | 5.50 % | $550 |
| $400,000 | 6.00 % | $600 |
Worked out by Radif Partners · How we calculate · Connecticut rule read on October 19, 2026, brackets of tax year 2025 · not tax advice
Connecticut subtracts contributions to CHET accounts from state income up to $5,000 a year for single, head of household and separate filers, and $10,000 on a joint return, counted per return across all accounts. Anything above that carries forward for 5 years, each later year staying within the same annual cap. A couple at $230,000 who put $40,000 into CHET at once deduct $10,000 the first year, saving $600, and the rest over the following years, about $2,400 in all at today's rates. The most a single joint deposit can be fully deducted on is $60,000. Only the CHET Direct and CHET Advisor plans count; rollovers in and transfers between the two do not. The CT-1040 instructions list no addition for CHET deductions when money is later withdrawn or moved, and the plan says rollovers that are not federally taxable are not taxed by Connecticut either.
| Benefit for contributions | Deduction |
|---|---|
| Cap | $5,000 single, $10,000 joint per return |
| Another state’s plan counts | No, in-state plan only |
| Carryforward of the excess | 5 years |
| State plans (official names, no recommendation) | CHET Direct Plan, CHET Advisor Plan |
| Account balance limit | $550,000 |
| K-12 withdrawals qualified for state tax | Yes |
| 529 to Roth IRA rollover qualified | Not stated by the state |
| Student loan payments qualified | Yes |
| Add-back on a rollover to another state’s plan | No |
One deposit, several returns
Line 48 of the CT-1040 instructions caps the CHET subtraction at $5,000, or $10,000 for spouses filing jointly, and lets the excess carry forward for 5 years. The carried amount is not added to the next year's cap; it fills it. In practice a joint return absorbs $10,000 a year, so the deposit year plus 5 carry years cover up to $60,000.
The couple at $230,000 who send $40,000 in one check use 4 returns to deduct it: $600 on each at their 6.0 % bracket. Had they spread the same money over 4 yearly deposits, the state result would be identical. The carryforward simply lets a grandparent's gift or a bonus go in early without losing the deduction.
| Tax year | Subtracted | Connecticut tax saved |
|---|---|---|
| Deposit year | $10,000 | $600 |
| Carry year 1 | $10,000 | $600 |
| Carry year 2 | $10,000 | $600 |
| Carry year 3 | $10,000 | $600 |
Large gifts also meet the federal gift tax rules. A couple can give $38,000 a year to one child without using lifetime exemption, or elect to spread a bigger gift over five years.
Federal room for a lump sum into CHET
Fits in the five-year election
$60,000
| Yearly exclusion, 2026 | $19,000 |
| Room over five years | $190,000 |
| Counted per year | $12,000 |
Smaller incomes, same rule
Connecticut's brackets climb from 2 % to 6.99 %, so the value of a dollar deducted depends on income. A single nurse at $68,000 who sets aside $250 a month saves $165 a year. The calculator uses the basic rate table only. Higher earners in Connecticut also face a phase-out add-back and a benefit recapture that lift the effective marginal rate within certain income bands, so their real saving can be somewhat higher than shown.
Connecticut saving at your income
Connecticut tax saved on this contribution
$165
| Subtracted from state income | $3,000 |
| Your state marginal rate | 5.50 % |
| Cap that applies this year | $5,000 |
| Back per $1,000 contributed | $55 |
CHET only, and what does not count
The subtraction applies to the CHET Direct Plan and the CHET Advisor Plan. Another state's plan earns nothing. Money rolled in from another 529 is not a contribution for this purpose, and moving money between the Direct and Advisor plans does not create a new deduction.
Withdrawals and the missing add-back
Connecticut starts from federal adjusted gross income, and the list of addition modifications in the CT-1040 instructions contains no line for CHET deductions. The CHET Direct Fact Kit adds that qualified withdrawals as defined by section 529, which now include K-12 costs up to $20,000 a year and credential programs, carry no Connecticut tax, and that rollovers to other plans that are not federally taxable are not taxed. The Department of Revenue Services has not said in so many words that there is no recapture; this page infers it from that silence. Nothing official was found on rollovers to a Roth IRA.