529 Plan Tax Savings Calculator
Estimate the state income tax savings from your 529 college savings plan contributions and see how federal tax-free growth adds to your balance. Built with 2026 deduction caps, credit states, and gift-tax limits.
529 Plan Tax Savings Calculator
Your State's 529 Benefit
Most income-tax states give a deduction. Indiana, Utah, Vermont, Minnesota, and Oregon give a credit instead. Nine states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) have no income tax.
Annual 529 Contribution
Deduction Details
Many states double the cap for Married Filing Jointly. Some states (Colorado, New Mexico, West Virginia) have no cap at all. A few states cap per beneficiary, so multiple children can multiply the cap.
Credit Details
A credit reduces tax owed dollar-for-dollar up to the cap. Indiana, for example, gives a 20% credit on contributions.
Tax-Free Growth Projection
The amount above your state's cap still goes into the account and grows federally tax-free. Some states let unused contributions carry forward, but carryforward rules vary by state.
Your state marginal rate is 0%, so a deduction produces no tax savings this year even though the deduction technically applies.
Federal Tax Treatment
There is no federal income tax deduction for 529 contributions. In exchange, earnings grow free of federal income tax, and qualified withdrawals for tuition and education expenses come out federal-income-tax-free. Starting in 2026, qualified withdrawals include up to $20,000 per year per beneficiary for K-12 tuition.
Projected Balance at Withdrawal
Years of untaxed compounding often add up to more than the one-year state deduction.
Plan the Whole Tax Picture
State 529 savings are one piece. Tax47 builds a full federal return from your real W-2, 1099, and Schedule C data, and applies every credit and deduction you qualify for automatically.
How 529 plan tax savings work: federal vs. state
A 529 plan gives you two separate layers of tax benefit, and they work differently. Knowing which is which keeps your expectations grounded.
The federal layer is the same for everyone. You get no federal income tax deduction for the money you put in. In return, the account grows free of federal income tax, and money you take out for qualified education expenses (tuition, fees, books, and now up to $20,000 per year per beneficiary for K-12 starting in 2026) comes out federal-income-tax-free.
The state layer is where the differences show up. Most states with an income tax let you deduct or subtract 529 contributions from your state taxable income, usually up to an annual cap. A smaller group gives a credit instead. Nine states have no income tax, so there is no state break to claim. The calculator above lets you pick which case applies and shows the dollar result. If you are weighing other tax-advantaged accounts, the IRA deduction calculator and the HSA tax savings calculator work the same way for retirement and medical savings.
529 state tax deductions and credits by state in 2026
Deduction states reduce your taxable income by the contribution amount, up to a cap. Your savings equal that deductible amount times your state marginal rate, so a higher rate means a bigger break. Caps differ for single and joint filers, and many states roughly double the cap for Married Filing Jointly. A few states (Colorado, New Mexico, West Virginia) place no cap on the deduction at all.
Credit states work differently. Indiana, Utah, Vermont, Minnesota, and Oregon give a credit that cuts the tax you owe dollar-for-dollar, up to a state maximum, rather than lowering taxable income. Your marginal rate does not factor in. The nine no-income-tax states (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming) offer no state break, though the federal growth benefit still applies.
There is one more catch: tax-parity states (Arizona, Arkansas, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, and Pennsylvania) let you claim the break for contributions to any state's plan. Everywhere else, you generally have to use your own state's 529 plan to qualify.
Estimating the long-term value of tax-free 529 growth
The one-year state deduction is real money, but it is often the smaller part of the story. The growth projection in the calculator treats your annual contributions as an ordinary annuity and applies the future-value formula: each year's contribution compounds at your expected return until withdrawal.
Because all of that growth escapes federal income tax, the tax-free earnings line can easily outweigh a single year's state savings over a 10 or 18 year horizon. A family contributing $5,000 a year for 15 years at a 6% return builds well over $115,000, with roughly $40,000 of that being untaxed earnings. If you also invest outside a 529, the capital gains tax calculator shows what that same growth would cost in a taxable brokerage account.
529 contribution limits, gift-tax rules, and superfunding for 2026
There is no fixed annual contribution limit on a 529 plan, but contributions count as gifts. In 2026 you can give up to $19,000 per donor per beneficiary ($38,000 for a married couple splitting gifts) without touching your lifetime gift-tax exemption or filing a return.
Superfunding lets you front-load up to five years of gifts at once: up to $95,000 per beneficiary ($190,000 for a married couple) in 2026. You make the five-year election on IRS Form 709, which spreads the gift evenly for gift-tax purposes and gets more money compounding sooner. With the 2026 expansion of qualified withdrawals to K-12 tuition, the plan stretches further than before. For other credits that lower your education and savings costs, see the Saver's Credit calculator and the student loan interest deduction calculator.
Frequently Asked Questions
Common questions about 529 plan tax savings calculator
Are 529 plan contributions tax deductible on my federal return?
No. There is no federal income tax deduction for 529 contributions. The federal benefit shows up after you contribute: earnings grow free of federal income tax, and qualified withdrawals for tuition and education expenses come out federal-income-tax-free. State tax breaks are a separate matter and vary a lot.
How much will I save in state taxes by contributing to a 529 plan?
In a deduction state, your savings equal the deductible amount times your state marginal income tax rate. A $5,000 deduction at a 5% rate, for example, saves $250. In a credit state, the savings equal your contribution times the credit rate, capped at the state maximum. In the nine states with no income tax, state savings are $0.
Which states offer a 529 tax deduction, and which offer a tax credit instead?
Most states with an income tax give a deduction or subtraction from taxable income for 529 contributions, usually with an annual cap. A smaller group gives a tax credit instead, including Indiana, Utah, Vermont, Minnesota (credit or deduction), and Oregon. A credit cuts the tax you owe dollar-for-dollar up to a cap, while a deduction lowers taxable income.
What are tax-parity states, and can I deduct contributions to another state's 529 plan?
Tax-parity states let you claim the state tax break for contributions to any state's 529 plan, not just the in-state plan. These include Arizona, Arkansas, Kansas, Maine, Minnesota, Missouri, Montana, Ohio, and Pennsylvania. In non-parity states, you generally have to use your own state's plan to qualify for the deduction or credit.
Do 529 plan withdrawals get taxed?
Qualified withdrawals used for eligible education expenses are free of federal income tax, and usually free of state income tax in your home state. Starting in 2026, qualified withdrawals include up to $20,000 per year per beneficiary for K-12 tuition. Non-qualified withdrawals are taxed on the earnings portion and generally face a 10% federal penalty.
Is there an annual limit on how much I can contribute to a 529 plan in 2026?
There is no hard annual contribution limit, but contributions are treated as gifts. In 2026 you can give up to $19,000 per donor per beneficiary ($38,000 for married couples splitting gifts) without using your lifetime gift-tax exemption or filing a gift-tax return. Plans also have lifetime aggregate balance limits set by each state.
What is 529 superfunding and how does the 5-year gift-tax election work?
Superfunding lets you front-load up to five years of gifts in one year: up to $95,000 per beneficiary ($190,000 for married couples) in 2026. You elect to spread the gift evenly over five years for gift-tax purposes by filing IRS Form 709. That gets more money compounding tax-free sooner while staying within the annual exclusion.
What happens if my contribution is more than my state's deduction cap?
The amount above your state's annual cap simply does not generate a state tax break that year. It still goes into the account and grows federally tax-free, and qualified withdrawals stay tax-free. Some states let unused contributions carry forward to future years, but carryforward rules vary, so check your state's plan.