Disclaimer: There is no federal income tax deduction for 529 contributions. State treatment varies and changes almost every year. The figures below are compiled from 2025-26 / 2026 state guidance (taxpayers.net, savingforcollege.com, Morningstar) and are rounded summaries. Always confirm the current limit and in-state-plan requirement with your state Department of Revenue before contributing. This is general information, not tax advice.
Direct answer: There is no federal 529 deduction, but more than 30 states plus DC offer a state income tax deduction or credit. The nine states with no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) give nothing, and a few income-tax states — California, Hawaii, Kentucky, North Carolina — also offer no 529 break. Unlimited-deduction states include New Mexico, South Carolina and West Virginia; high caps include Illinois ($10,000 / $20,000 joint), Pennsylvania ($17,000 / $34,000, and it allows any state's plan), and New York ($5,000 / $10,000).
2026 State 529 Tax Benefit Comparison (selected)
| State | Max deduction / credit (single / joint) | Type | In-state plan required? |
|---|---|---|---|
| Arizona | $2,000 / $4,000 | Deduction | No (parity) |
| Arkansas | $5,000 / $10,000 | Deduction | No (parity) |
| Colorado | Unlimited (up to taxable income) | Deduction | Yes |
| Connecticut | $5,000 / $10,000 | Deduction | Yes |
| Georgia | $4,000 / $8,000 | Deduction | Yes |
| Illinois | $10,000 / $20,000 | Deduction | Yes |
| Indiana | 20% credit, max $1,500 | Credit | Yes |
| Iowa | $5,500 / $11,000 per beneficiary | Deduction | Yes |
| Kansas | $3,000 / $6,000 | Deduction | No (parity) |
| Minnesota | $1,500 / $3,000 ded OR 50% credit | Either | No (parity) |
| Missouri | $8,000 / $16,000 | Deduction | No (parity) |
| Montana | $3,000 / $6,000 | Deduction | No (parity) |
| New Mexico | Unlimited | Deduction | Yes |
| New York | $5,000 / $10,000 | Deduction | Yes |
| Ohio | $4,000 per beneficiary | Deduction | Yes |
| Oklahoma | $10,000 / $20,000 | Deduction | Yes |
| Oregon | Credit ~$170 / $340 (income-based) | Credit | Yes |
| Pennsylvania | $19,000 / $34,000 | Deduction | No (parity) |
| South Carolina | Unlimited | Deduction | Yes |
| Utah | ~4.55% credit, max ~$110 / $220 | Credit | Yes |
| Vermont | 10% credit, max $250 / $500 | Credit | Yes |
| Virginia | $4,000 per account | Deduction | Yes |
| West Virginia | Unlimited | Deduction | Yes |
No income-tax states (no benefit): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Income-tax states with no 529 break: California, Hawaii, Kentucky, North Carolina. Several other states (e.g., Delaware, Maine, New Jersey) are listed differently across sources — verify with your state. Source: taxpayers.net 529 state guide (2025-26), savingforcollege.com, Morningstar (data as of Apr 30, 2026).
Key concepts
- Parity states let you deduct contributions to any state's 529 (Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana, Ohio, Pennsylvania). That lets you pick a low-fee plan (e.g., Utah, Nevada) and keep the break.
- Credit vs deduction. Indiana, Minnesota, Oregon, Utah and Vermont give a tax credit (dollar-for-dollar) instead of a deduction; for lower contributions a credit can be worth more.
- Unlimited states (New Mexico, South Carolina, West Virginia, Colorado) let you deduct the full contribution from state taxable income.
Compare the trade-off
Weigh a 529 against a taxable brokerage account with the College Cost Comparison and estimate your aid-adjusted net price with the Financial Aid Net Cost Calculator.