How the 529 calculators work
Every calculator on this site runs in your browser on one engine and two data files: the federal rules of 2026, each with the official text it comes from, and one record per state for the 50 states and the District of Columbia. Each state record lists the pages it was read on and the date (October 19, 2026 for this edition). This page gives the formulas, the tests and what is left out.
1. The state saving on a contribution
There is no federal deduction for 529 contributions. The saving, where it exists, is on the state return. For a deduction, the engine computes the state tax on your taxable income with the state's own brackets, then the tax on the same income minus the deductible part of the contribution, and gives the difference. A deduction that crosses a bracket boundary is therefore valued at both rates, not at the top one. A county or city tax that follows the state base (Maryland counties, New York City) can be added as a rate in the advanced options.
For a credit, the engine applies the state's rate to the part of the contribution that counts, caps it at the state's maximum, applies income tiers and phase-outs where the state has them, and limits a non-refundable credit to the state tax due. Where a state lets you choose between a credit and a deduction, the engine takes the larger. The deductible part is capped per taxpayer, per return or per child exactly as the state text says; a cap per child is multiplied by the number of children you enter. Another state's plan counts only where the state gives parity (or partial parity, as in Arkansas). An income limit closes the benefit above it; where the state text measures it on federal AGI, the engine uses the taxable income you type, so check the limit against your own AGI.
| Kind of state rule | States |
|---|---|
| Deduction | 33 |
| Credit | 4 |
| Credit or deduction | 1 |
| Income tax, no 529 benefit | 4 |
| No income tax on wages | 9 |
2. State records
Each record holds: the kind of benefit, the caps and what they are counted per, the credit rate and maximum, income tiers or limits, the carryforward, the parity rule, the state plans and their balance limit, whether the state treats K-12 withdrawals, 529-to-Roth rollovers and student loan payments as qualified on its own return, and how it adds back deductions. Every field comes from the state revenue department (return instructions, schedules, statutes) or the disclosure of the plan the state sponsors. When the text does not settle a point, the record says "not stated" and the page says so. Points we could not confirm are kept out of the calculation and listed on the state's page.
Brackets are those of tax year 2026 where the state has published them; otherwise the latest published table, which the state page names. Rates cut by law after the read date are not applied until the state publishes them.
3. Federal rules of 2026
Public Law 119-21 of July 4, 2025 (congress.gov) raised the yearly K-12 limit from $10,000 to $20,000 per beneficiary for tax years beginning after December 31, 2025, widened K-12 expenses for distributions after the date of enactment, added postsecondary credentialing expenses, made 529-to-ABLE rollovers permanent and created Trump accounts. Section 529 itself is read on govinfo.gov: $10,000 of student loans per borrower over a lifetime, and the 529-to-Roth IRA rollover limited to $35,000 per beneficiary, for accounts open 15 years, excluding money of the last 5 years, within the yearly IRA limit ($7,500 in 2026, IR-2025-111). IRS Publication 970 (IRS Publication 970 (2025), Tax Benefits for Education, chapter 7) gives the qualified expenses, the Coverdell and American opportunity credit rules. The 2026 gift tax exclusion ($19,000) and the ABLE limit ($20,000) come from Rev. Proc. 2025-32.
4. Growth and the taxable account
The 529 balance grows at the yearly return you choose, compounded monthly, with monthly contributions. The comparison account receives the same money. Each month its dividends (the yield you choose) are taxed at the 2026 federal long-term gains rate for your income (0, 15 or 20 %), plus the 3.8 % net investment income tax above $200,000 single or $250,000 joint (Topic 559), plus your state marginal rate; the remaining gain is taxed the same way when the account is sold for college. Your income is held constant over the years.
| Rate | Single, from | Single, to | Joint, from |
|---|---|---|---|
| 10 % | $0 | $12,400 | $0 |
| 12 % | $12,400 | $50,400 | $24,800 |
| 22 % | $50,400 | $105,700 | $100,800 |
| 24 % | $105,700 | $201,775 | $211,400 |
| 32 % | $201,775 | $256,225 | $403,550 |
| 35 % | $256,225 | $640,600 | $512,450 |
| 37 % | $640,600 | and up | $768,700 |
5. Withdrawals
A non-qualified withdrawal is taxed on its earnings part only (box 2 of Form 1099-Q divided by box 1), at your federal marginal rate, plus the 10 % additional tax, waived up to a tax-free scholarship (IRS 529 questions and answers), plus the state rate and, where the state adds back earlier deductions, the add-back at your state marginal rate.
6. Tests
Automated tests run before each build: bracket arithmetic, the cap of each kind of state rule, the Minnesota phase-out, the Delaware income cliff, a saving never larger than the contribution or the state tax, the 2026 federal limits, and every calculator on its default values. A state record without a source or with brackets out of order stops the build.
7. What is not modeled
- Recapture rules that depend on your own history beyond the amount you type.
- Financial aid formulas.
- Plan fees and investment options: compare them in each plan's disclosure.
- Investment returns and cost rises are assumptions you set, not forecasts.
Corrections: contact page. These are estimates, not personal financial or tax advice.