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State. Tax Treatment of 529 Plan Contributions. California. No deduction or credit. Illinois. Maximum deduction of $10,000 ($20,000 for married joint filers) per year
Opening a 529 plan is a tax-advantaged way to set aside money for college. The money you contribute can grow tax-deferred and qualified withdrawals are tax-free. While there is no federal tax ...
The state hasn’t yet updated the income limits for 2024, but 2023 limits were $126,250 for married couples filing jointly, $101,000 for single or head of household taxpayers and $101,025 for ...
529 Plan Tax Status: tax-deferred growth tax-free distributions tax-deductible contributions (varies by state) tax-deferred growth tax-free distributions Contributions: $2,000 limit per year per plan $500,000 to $235,000 per beneficiary (varies by state) [8] Distributions: qualified K-12 and post-secondary expenses
A 529 plan allows a participant to set up a tax-advantaged account to allow a beneficiary to use the funds for qualified education expenses. The participant deposits after-tax money in the account.
Contributions in a year are limited to the federal gift tax exclusion [11] for that year — $17,000 in 2023. If the beneficiary works and does not contribute to a 401(a) , 401(k), 403(b) , or 457 plan , the beneficiary can contribute an additional amount above that limit.
The funds in a 529 plan can also be used to pay off student loans although there are some limitations, including a $10,000 lifetime withdrawal limit. You can use money in a 529 plan for non ...
A 529 plan is a tax-advantaged way for parents to save for their children’s education expenses. The IRS doesn’t impose a contribution limit on 529 plans, unlike for other tax-advantaged ...