Can a parent contribute to a 529 plan and claim a tax deduction?

According to a recent study from Fidelity, 84% of parents would welcome a gift of college savings in place of traditional gifts. As an added bonus, the gift giver may qualify for a state income tax deduction or credit based on the 529 plan contributions.

How much can you write off for 529 contributions?

529 state deductions

State 529 Deduction
Arizona $2,000 single or head of household / $4,000 joint (any state plan) beneficiary
Arkansas $5,000 single / $10,000 joint beneficiary
California None
Colorado Full amount of contribution

What states offer tax deduction for 529 plans?

Arizona – Up to$2,000 per year per person can be deducted on any 529 plan

  • Arkansas – Up to$5,000 per year per person for in-state 529 plans,or up to$3,000 per person per year for out-of-state plans; rollover contributions qualify for a deduction
  • Kansas – Up to$3,000 per person per year; rollover contributions not deductible

    • Does your state offer a 529 plan contribution tax deduction?

    While federal tax rules do not allow families to deduct 529 contributions, states have their own policies. Remember that each 529 plan is owned and operated by a state government. Therefore, many states allow families to deduct 529 contributions on their state taxes. State-by-State Tax Deduction Rules for 529 Plans

    Can you get a 529 plan tax deduction?

    While no federal tax break exists for deducting 529 plan contributions, you may be able to claim a deduction or tax credit at the state level. Here’s more on how a 529 plan deduction works and when you may be able to claim one on your taxes.

    Are earnings on 529 taxable?

    This means you could invest and grow your college savings and keep up with inflating college prices. Earnings on 529 accounts are not treated as taxable income. Let’s say, for example, that you save $1,000 in a 529 investment account, which grows by 5% in a year to $1,050. That $50 in growth isn’t taxable.