Tax Break for College Tuition Payments
Tax Break for College Tuition Payments
Maximum Annual Deductions
Here are the maximum annual deductions or credits available. If your state isn’t here, it either doesn’t have income taxes or doesn’t offer a tax break for “529” deposits.
State/District |
Annual Cap on Tax Break |
|---|---|
| Colorado | Unlimited deductions up to the amount of your taxable income* |
| Connecticut | $5,000 deduction; $10,000 for married couple filing jointly |
| District of Columbia | $3,000 deduction; $6,000 for married couple filing jointly; a couple with one child must have two accounts to get the full $6,000 |
| Georgia | $2,000 deduction per beneficiary; declines above $50,000 in income or $100,000 for married couple filing jointly |
| Idaho | $4,000 deduction; $8,000 for married couple filing jointly |
| Illinois | $10,000 deduction; $20,000 for married couple filing jointly |
| Indiana | $1,000 tax credit (20% of deposit up to $5,000) starting in 2007 |
| Iowa | $2,500 deduction per beneficiary; $5,000 for married couple filing jointly |
| Kansas | $3,000 deduction for each beneficiary; $6,000 for married couple filing jointly |
| Louisiana | $2,400 deduction per beneficiary per year; $4,800 for married couples filing jointly; state matches deposits on up to 14% of deposit depending on income |
| Maine | $250 deduction per beneficiary starting in 2007 if income is below $100,000 (or $200,000 for married couple filing jointly) |
| Maryland | $2,500 per account holder per beneficiary (or $10,000 if each parent maxes out the deduction in both of the state’s 529 plans) |
| Michigan | $5,000 deduction; $10,000 for married couple filing jointly |
| Mississippi | $10,000 deduction; $20,000 for married couple filing jointly |
| Missouri | $8,000 deduction; $16,000 for married couple filing jointly (both spouses must have income and separate accounts) |
| Montana | $3,000 deduction; $6,000 for married couple filing jointly |
| Nebraska | $1,000 deduction per household |
| New Mexico | Unlimited deductions up to the amount of your taxable income* |
| New York | $5,000 deduction; $10,000 for married couple filing jointly |
| Ohio | $2,000 deduction per beneficiary per household |
| Oklahoma | $10,000 deduction; $20,000 for married couple filing jointly |
| Oregon | $2,000 deduction per household |
| Rhode Island | $500 deduction; $1,000 for married couple filing jointly |
| South Carolina | Unlimited deductions up to the amount of your taxable income* |
| Utah | $1,560 deduction per beneficiary; $3,120 for married couple filing jointly |
| Vermont | $100 tax credit (5% of deposit up to $2,000) per beneficiary; $200 for married couple filing jointly |
| Virginia | $2,000 deduction per year, per account. Multiple accounts are fine, up to certain limits |
| West Virginia | Unlimited deductions* |
| Wisconsin | $3,000 deduction per beneficiary per household |
*These states (and others) limit the total amount you can have deposited in a 529 plan at any one time.
We hope you found this article about “Tax Break for College Tuition Payments” helpful. If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page or our website at www.GROCO.com. Unfortunately, we no longer give advice to other tax professionals gratis.
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Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com. GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.
Alan L. Olsen, CPA, Wikipedia Bio
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