529 tax parity states in 2026: where any plan counts on your state return
In a parity state the plan’s home address stops mattering for the tax return. Very few states work that way, and a couple more go only part of the way.
Lost by leaving the Arizona plan
$0
Arizona gives the same benefit for any state’s plan.
| Yearly saving, home plan | $50 |
| Yearly saving, other plan | $50 |
| Gap over the years | $0 |
Arizona: Subtraction of contributions to any state's 529 plan up to $2,000 per beneficiary (single/head of household) or $4,000 per beneficiary (married filing jointly; MFS spouses share $4,000 per beneficiary); rollovers are not deductible. Read on 2026-10-19.
Worked out by Radif Partners · How we calculate · federal rules from Public Law 119-21 and IRS Publication 970, state rules from each state · not tax advice
A tax parity state gives its residents the same deduction or credit whether they contribute to the home state's 529 or to a plan run by any other state. At the date we read the rules, the states in our table with full parity are Arizona, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, Pennsylvania. Arkansas gives partial parity: an outside plan still earns a deduction, but under a smaller cap. The other 29 states with a break reward their own plan only, so a contribution elsewhere earns nothing on the state return. Parity changes the arithmetic of choosing a plan. An Arizona couple with two children who put $8,000 into another state's 529 still save $200, exactly what the Arizona plan would have given. In the 13 states with no income tax or no contribution break, the plan's home state is equally irrelevant for the deposit, for the opposite reason: there is no break to keep.
What parity means, and what it does not
Every 529 savings plan is sponsored by a state, yet federal law does not require the saver to live there. The question parity answers is narrower: will your own state's revenue department give you its deduction or credit if the account sits in another state's program? In a parity state the answer is yes, up to the same cap and at the same value. In a home-plan-only state the answer is no, and the contribution becomes an ordinary 529 deposit with federal advantages alone.
Parity is a rule about the deposit. It says nothing about withdrawals, which every state handles under its own definitions of qualified costs, or about what happens if the account later moves. A resident of a parity state still files that state's return and follows that state's add-back rules.
The full-parity list
States in our table that reward contributions to any state's 529: Arizona, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, Pennsylvania. The list is short, and the details vary.
Arizona allows a subtraction of up to $2,000 per beneficiary for a single filer and $4,000 per beneficiary on a joint return, for contributions to any state's plan. Because the cap follows each child, a couple with two children can subtract up to $8,000. At $120,000, that is worth $200 through an outside plan, the very figure the Arizona program itself would return. Arizona's flat rate of 2.50 % keeps the value modest, which is why fees can outweigh it in any direction. Rollovers into an account are not deductible there.
Minnesota extends both of its options, the subtraction and the credit, to contributions to any section 529 account. A single filer at $60,000 who puts $1,000 into an out-of-state plan gets $500 back in 2026, the better of the 50 % credit and a subtraction worth about $68 at that bracket. The credit phases out with income, the subtraction does not, and Minnesota counts contributions net of the same year's withdrawals.
Minnesota break with an outside plan
Minnesota tax saved on this contribution
$500
| Credit on your state return | $500 |
| Your state marginal rate | 6.80 % |
| Cap that applies this year | $1,000 |
| Back per $1,000 contributed | $500 |
Partial parity: a smaller cap for the outside plan
Arkansas sits between the two camps.
Arkansas gives its full deduction, $5,000 per taxpayer, only for contributions to the Arkansas plan. Contributions to another state's 529 are still deductible, but up to $3,000 per taxpayer and only if they were not deducted elsewhere. For a married couple at $105,000 who put $10,000 a year in, the home plan saves $370 and an outside plan $222. Over ten years of deposits, the gap reaches $1,480. Arkansas also lets an excess carry forward for 4 years.
Arkansas: the cost of the smaller cap
Lost by leaving the Arkansas plan
$1,480
| Yearly saving, home plan | $370 |
| Yearly saving, other plan | $222 |
| Gap over the years | $1,480 |
Georgia added a reciprocal rule for 2026 through 2030. Its note says contributions to another state's plan count, within the same overall cap of $8,000 per beneficiary on a joint return, but only up to half of it, and only when that other state gives its own taxpayers a deduction for contributions to Georgia's Path2College plan. Which states meet the condition was not verified at the date we read it, so our table treats Georgia as a home-plan state and the calculator gives nothing for an outside plan there. The Georgia page has the full text.
Home-plan-only states
The large majority of states with a break reward their own program and nothing else: Alabama, Colorado, Connecticut, Delaware, District of Columbia, Georgia, Idaho, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Nebraska, New Jersey, New Mexico, New York, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Vermont, Virginia, West Virginia, Wisconsin. A Maryland single filer at $85,000 who sends $2,500 to a plan run elsewhere gets $0 on the Maryland return. Several of these states sponsor more than one program, a direct plan, an advisor-sold version, sometimes a prepaid tuition contract. Illinois, for one, counts all three of its programs toward a single cap.
For these residents the outside plan has to earn back the lost break through lower costs or a better fit over the years the money stays invested. The out-of-state plan page turns that gap into a yearly percentage you can compare with an expense ratio.
States where the plan's address is irrelevant for the deposit
13 states in our table either have no wage income tax or give nothing for 529 contributions: Alaska, California, Florida, Hawaii, Kentucky, Nevada, New Hampshire, North Carolina, South Dakota, Tennessee, Texas, Washington, Wyoming. Their residents are in a position similar to parity, since no plan earns a deposit break, and they choose on investment options, costs and service alone. Two points still matter. Some of these states exempt qualified withdrawals only under their own definitions, and California, for example, adds its own tax on the earnings of a K-12 withdrawal. And a resident who later moves to a deduction state will find that the new state's rule applies from the year of the move.
Checking parity before you contribute
Parity rules change with legislation, and a state can widen or narrow them for a period, as Georgia did. Before you rely on an outside plan for the deduction, read the current year's state return instructions or the plan's tax page. The state pages on this site quote the text we read and the date, and the deduction table by state shows the parity column next to each cap. Remember that parity only covers the deposit: if you deducted contributions and later roll the account to another plan, the add-back rules of your state still apply.