Growth and distributions
- 529 account earnings growth is deferred from federal and state income taxes.
- Account distributions used for qualified education expenses are free from federal taxes and may also be free from state taxes.1
Features & benefits
State tax benefits
Some states allow for a deduction against state income taxes on contributions.2
New Mexico
Home of Scholar's Edge 529.
Tax Neutral
These states do not offer tax deductions or credit for 529 contributions, or have no state income tax.
Tax Parity
These states offer tax deductions or credit for contributions to any 529 plan, regardless of state.
In-state Tax Benefit
These states offer tax deductions or credit for contributions to the in-state 529 plan only.
Hover over each state to view the tax benefits per state.
| State | Maximum annual state income tax benefit: Individual/Joint | Per beneficiary | Carry forward | State tax rate (%) | State tax savings ($) |
|---|---|---|---|---|---|
| Alabama | 5,000/10,000 in state plan | No | 5.00% | $500 | |
| Arizona | 2,000/4,000 | No | 4.50% | $180 | |
| Arkansas | 5,000/10,000 in-state; 3,000/6,000 out of state | No | 4 years | 6.60% | $660 |
| Colorado | Full contribution amount, to extent of taxable income | No | 4.63% | $463 | |
| Connecticut | 5,000/10,000 in state plan | No | 5 years | 6.99% | $699 |
| District of Columbia | 4,000/8,000 in state plan | No | 5 years | 8.95% | $716 |
| Georgia | 4,000/8,000 in state plan | Yes | 5.75% | $460 | |
| Idaho | 6,000/12,000 in state plan | No | 6.93% | $693 | |
| Illinois | 10,000/20,000 in state plan | No | 4.95% | $495 | |
| Indiana | 20% tax credit on contributions up to $5,000 in state plan | No | 3.23% | $1,000 | |
| Iowa | 3,785/7,570 in state plan | Yes | 3.90% | $646 | |
| Kansas | 3,000/6,000 | Yes | 5.70% | $342 | |
| Louisiana | 2,400/4,800 in state plan | Yes | Unlimited | 6.00% | $288 |
| Maine3 | 1,000 per beneficiary in state plan | Yes | 5.70% | $68 | |
| Maryland | 2,500/5,000 in state plan | Yes | 10 years | 5.75% | $288 |
| Massachusetts | 1,000/2,000 in state plan | No | 5.05% | $101 | |
| Michigan | 5,000/10,000 in state plan | No | 4.25% | $425 | |
| Minnesota | 50% tax credit on contributions up to $500 or state deduction based on contributions of 1,500/3,000 available | No | 9.85% | $296 | |
| Mississippi | 10,000/20,000 in state plan | No | 5.00% | $500 | |
| Missouri | 8,000/16,000 | No | 5.40% | $540 | |
| Montana | 3,000/6,000 | No | 6.90% | $414 | |
| Nebraska | 10,000/10,000 - 5,000 if married filing separately | No | 6.84% | $684 | |
| New Jersey | Up to 10,000 deduction to in-state plan if income is 200,000 or less | No | 5.53% | $553 | |
| New Mexico | Full contribution amount in state plan | No | 5.90% | $590 | |
| New York | 5,000/10,000 in state plan | No | 8.82% | $882 | |
| North Dakota | 5,000/10,000 in state plan | No | 2.90% | $290 | |
| Ohio | 4,000 in state plan | Yes | Unlimited | 4.797% | $192 |
| Oklahoma | 10,000/20,000 in state plan | Yes | 5 years | 5.00% | $500 |
| Oregon4 | 150/300 in state plan | No | 4 years | 9.90% | $300 |
| Pennsylvania | 16,000/32,000 | Yes | 3.07% | $307 | |
| Rhode Island | 500/1,000 in state plan | No | Unlimited | 5.99% | $60 |
| South Carolina | Full contribution amount in state plan | No | 7.00% | $700 | |
| Utah | 4.8% tax credit on contributions up to 2,290/4,580 in state plan | Yes | 4.95% | $213 | |
| Vermont | 10% tax credit on contributions up to 2,500/5,000 in state plan | Yes | 8.75% | $500 | |
| Virginia | 4,000 in state plan; fully deductible if 70 or older | Yes | Unlimited | 5.75% | $575 |
| West Virginia | Full contribution amount in state plan | No | 5 years | 6.50% | $650 |
| Wisconsin | 3,860, or 1,930 if married filing separately/divorced in state plan | Yes | Unlimited | 5.30% | $205 |
1 Please note, account distributions not used for qualified education expenses will be subject to federal income taxes on the earnings and a 10% federal tax penalty, as well as state and local income taxes.
2 Some states restrict favorable tax treatments to residents who invest in their state's own plan. Before investing through Scholar's Edge, find out if your home state offers any state tax or other benefits that are available only for investments in that state's 529 plan.
3 Taxpayers filing single or married separate returns with federal adjusted gross income of more than $100,000, and taxpayers filing married joint or head of household returns with federal adjusted gross income of more than $200,000 do not qualify for the deduction. In Maine, the state tax rate varies depending upon filing status and taxable income.
4 Tax savings may depend on your specific situation.
Assumes joint tax filers in the maximum state tax bracket for 2023 and maximum annual deduction allowed by state for up to $10,000 in 529 plan contributions.