Delaware 529 tax deduction in 2026
Delaware's 529 deduction is small and switches off completely one dollar past its income line.
Delaware tax saved on this contribution
$132
6.6 % of what you put in comes back on your 2026 return.
| Subtracted from state income | $2,000 |
| Your state marginal rate | 6.60 % |
| Cap that applies this year | $2,000 |
| Back per $1,000 contributed | $66 |
Delaware: Subtraction from federal AGI for contributions to DE529 accounts up to $1,000 per individual or $2,000 for spouses filing jointly, only if federal AGI is at most $100,000 / $200,000; not allowed for rollovers, beneficiary changes, or amounts intended for K-12 tuition. Read on 2026-10-19. No federal deduction exists for 529 contributions.
| Taxable income | Marginal rate | Tax saved |
|---|---|---|
| $50,000 | 5.55 % | $111 |
| $100,000 | 6.60 % | $132 |
| $200,000 | 6.60 % | $132 |
| $400,000 | 6.60 % | $0 |
Worked out by Radif Partners · How we calculate · Delaware rule read on October 19, 2026, brackets of tax year 2026 · not tax advice
Delaware lets a filer subtract up to $1,000 of contributions to the DE529 Education Savings Plan, or $2,000 for spouses filing jointly, but only while federal adjusted gross income (AGI) stays at or below $100,000 single or $200,000 joint. There is no phase-out: above the line the deduction is zero. A couple $1,000 under the joint limit who contribute $2,000 save $132; the same couple $1,000 over it saves $0. With the top rate of 6.6 % starting at $60,000, most eligible households deduct at that rate. Rollovers, beneficiary changes and money intended for K-12 tuition do not qualify. Only DE529 counts. On the way out the Delaware Code lists no add-back for 529 distributions or past DE529 deductions, and the state is silent on the 2025 federal changes, Roth rollovers and student loans. DE529 accepts contributions until an account reaches $500,000.
| Benefit for contributions | Deduction |
|---|---|
| Cap | $1,000 single, $2,000 joint per return |
| Income limit | $100,000 single, $200,000 joint (federal adjusted gross income) |
| Another state’s plan counts | No, in-state plan only |
| State plans (official names, no recommendation) | DE529 Education Savings Plan |
| Account balance limit | $500,000 |
| K-12 withdrawals qualified for state tax | Yes |
| 529 to Roth IRA rollover qualified | Not stated by the state |
| Student loan payments qualified | Not stated by the state |
| Add-back on a rollover to another state’s plan | No |
A hard line at $200,000
Section 1106(b) of Title 30 grants the subtraction only to filers whose federal AGI does not exceed $100,000, or $200,000 for a joint return. The $100,000 line also covers heads of household and married couples filing separately, counted together. Nothing tapers. One dollar of AGI above the limit removes the whole subtraction, so a raise, a bonus or a capital gain late in the year can erase it. Move the income below and watch the result flip between $132 and $0.
Delaware deduction near the AGI line
Delaware tax saved on this contribution
$132
| Subtracted from state income | $2,000 |
| Your state marginal rate | 6.60 % |
| Cap that applies this year | $2,000 |
| Back per $1,000 contributed | $66 |
The calculator tests the limit against the income you enter. Delaware tests federal AGI, which comes before itemized or standard deductions, so enter AGI when you are near the line.
Small cap, high rate
The Delaware cap is small: $1,000 for an individual, $2,000 for spouses. The statute speaks of the amount contributed by the spouses up to $2,000, without saying each spouse must give half. Because Delaware's top bracket starts at $60,000 of taxable income and applies the same schedule to every filing status, a single parent at $64,000 who puts in $1,000 saves $66, the same per-dollar rate a couple near the limit gets.
Contributions that never qualify
The Code excludes three kinds of money from the subtraction: rollovers into DE529, amounts moved by a change of beneficiary, and contributions intended or used for K-12 tuition. A family that opens an account mainly to pay private school next year therefore gets no Delaware deduction for that money. Federally, K-12 costs up to $20,000 a year can still come out tax-free.
What happens on withdrawal
Delaware starts from federal AGI, and the list of additions in 30 Del. C. 1106(a) contains nothing for 529 distributions or earlier DE529 deductions. No recapture provision was found, so a rollover to another state's plan or a nonqualified withdrawal brings back no Delaware deduction. Federal income tax and the 10 % penalty on earnings still apply to a nonqualified withdrawal. K-12 withdrawals that are tax-free federally appear untaxed in Delaware for the same reason, an inference from the absence of any add-back rather than a Division of Revenue statement.
The state has said nothing about the 2025 federal law, rollovers to a Roth IRA or student loan payments. Delaware's definition of qualified expenses in Title 14 points to section 529(e), and rollovers are not treated as nonqualified there.
Growth matters more than the deduction
With a ceiling of $2,000, the deduction is a small part of the story. A family adding $170 a month from age six reaches about $35,351 by eighteen at a 6 % assumed return, all of it free of tax if spent on college.
DE529 from age six
In the 529 at age 18
$35,351
| You put in | $24,480 |
| Growth, tax-free for school costs | $10,871 |
| Taxable account after tax | $32,883 |
| Delaware tax saved, 12 years | $792 |