529 Plan Tax Calculator — State Deduction + Federal Tax-Free Growth (2026)

Quick summary

The 529 Plan Tax Calculator handles every tax angle of US college savings: state deduction or credit in the 30+ states that offer one, federal tax-free growth and withdrawals for qualified expenses, 5-year superfunding ($95K single / $190K split with spouse), and the new SECURE 2.0 Roth IRA rollover ($35,000 lifetime).

2026 OBBBA expanded 529 K-12 use to $20,000/year per student (up from $10K) — and now covers tutoring, test fees, vocational training, homeschool curriculum, and special-needs therapies. SECURE 2.0 §126 lets unused 529 funds roll over to the beneficiary's Roth IRA up to $35,000 lifetime, subject to 15-year account aging and 5-year fund holding.

State benefits are wildly variable: Indiana 20% tax credit on the first $7,500 = $1,500 free money. Pennsylvania, New Mexico, Colorado, West Virginia, South Carolina allow unlimited deduction. Most states require an in-state plan.

Annual contribution

State (deduction matrix)

Filing status

Federal marginal rate

State income tax rate

Years until college

years

Expected annual return

Superfund election (5-year frontload)

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How to use

1 Enter your annual contribution to the 529 plan (current and projected). Include both your contributions and grandparents' if you're modeling family total.
2 Select your state — calculator applies the state-specific deduction limit or credit rate. NY $5K/$10K, IL $10K/$20K, IN 20% credit, MN 50% credit, PA unlimited.
3 Enter filing status, federal marginal rate, and state income tax rate. State deductions only save your state marginal rate; credits offset state tax dollar-for-dollar.
4 Set years until college (typical 18) and expected return (6-7% historic for balanced 529 portfolio).
5 Toggle Superfund election if you want to model the 5-year frontload ($95K single / $190K split). Click Calculate to see state benefit, federal growth tax savings, and lifetime tax-free wealth created.

2026 OBBBA Major Changes to 529 Plans

Change	2025	2026 (OBBBA)
K-12 tuition limit	$10,000/yr	$20,000/yr per student
Qualified K-12 expenses	Tuition only	Tuition + tutoring + test fees + vocational + homeschool curriculum + therapies
Higher education	Tuition + R&B + computers + fees	Same (unchanged)
Apprenticeship costs	Qualified	Same (unchanged)
Student loan repayment	$10,000 lifetime per beneficiary	Same (unchanged, SECURE Act)
Roth IRA rollover	$35,000 lifetime (SECURE 2.0)	Same — fully effective in 2026

State 529 Tax Benefits — Top Programs (2026)

State	Benefit	Limit
Indiana	20% tax credit	Max $1,500/yr ($7,500 contribution)
Minnesota	50% tax credit	Max $500 single / $1,500 MFJ
Vermont	10% tax credit	Max $250 single / $500 MFJ
Utah	4.85% tax credit	Max $128 single / $256 MFJ
Pennsylvania	Deduction	$19K single / $38K MFJ (any state plan!)
Illinois	Deduction	$10K single / $20K MFJ (in-state only)
Colorado	Deduction	Unlimited (in-state only)
New Mexico	Deduction	Unlimited (in-state only)
South Carolina	Deduction	Unlimited (in-state only)
West Virginia	Deduction	Unlimited (in-state only)
New York	Deduction	$5K single / $10K MFJ (in-state only)
Mississippi	Deduction	$10K single / $20K MFJ (in-state only)

SECURE 2.0 §126 — 529 to Roth IRA Rollover

Starting 2024, unused 529 funds can roll over to the beneficiary's Roth IRA. Major upgrade for over-saved 529s.

Requirement	Detail
Lifetime cap	$35,000 per beneficiary (lifetime)
Annual limit	Subject to Roth IRA limit ($7,500 in 2026 / $8,600 age 50+)
Account age	529 must be open ≥ 15 years
Fund holding	Each contribution must be in account ≥ 5 years
Beneficiary income	Must have earned income equal to rollover amount
Rollover beneficiary	Must be 529 plan beneficiary (not parent)

5-Year Superfund Strategy

The 5-year superfund election lets you front-load a 529 with up to 5 years of annual exclusion gifts without using your $15M lifetime exclusion: $95,000 per donor / $190,000 if married couple gift-splits. Treated as $19K/year for 5 years for gift tax purposes. File Form 709 in year 1. Especially powerful for grandparents removing assets from their estate while funding education.

529 Plan vs Coverdell ESA vs Custodial UTMA

Account	Annual Limit	Tax Treatment	Use Case
529 Plan	No federal cap; state aggregate $300K-$550K+	Tax-free growth + qualified withdrawals	Best for college; $20K/yr K-12 (2026)
Coverdell ESA	$2,000/yr (income-limited)	Tax-free growth + qualified withdrawals	Niche — 529 has higher limits
Custodial UTMA/UGMA	$19K annual gift exclusion	Kiddie tax (parent rate above $2,700/yr)	Flexible use; reduces FAFSA aid
Roth IRA (kid)	$7,500/yr (must have earned income)	Tax-free retirement + $10K education penalty-free	Best for high earners with working teens

FAQ

Q Is there a federal tax deduction for 529 contributions?

No — there is NO federal income tax deduction for 529 contributions. The federal benefit is tax-free growth and tax-free qualified withdrawals. State deductions/credits ARE available in 30+ states (varies dramatically: PA up to $19K/$38K, IN 20% credit, NY $5K/$10K).

Q How much can I put in a 529 plan in 2026?

No annual limit per the IRS, but contributions count as gifts. Annual gift exclusion is $19,000/donee in 2026. 5-year superfund election lets you front-load $95,000 per donor (or $190,000 split with spouse) without using lifetime exclusion. State aggregate limits range $300K-$550K total per beneficiary.

Q Can 529 funds be used for K-12 in 2026?

YES — and OBBBA raised the limit to $20,000/year per student (was $10K). Now also covers tutoring, test fees, vocational training, homeschool curriculum, special-needs therapies (ADHD, dyslexia learning programs). Major expansion.

Q How does the 529 to Roth IRA rollover work?

SECURE 2.0 §126: roll up to $35,000 lifetime from 529 to the beneficiary's Roth IRA. Requirements: (1) 529 open 15+ years, (2) each contribution held 5+ years, (3) beneficiary has earned income equal to rollover, (4) annual rollover capped at Roth IRA limit ($7,500 in 2026), (5) rollover counts toward the $35K lifetime.

Q Which state has the best 529 tax benefit?

Best by absolute dollars: Pennsylvania (any state plan, $19K single / $38K MFJ deduction). Best by tax credit: Indiana (20% credit on $7,500 = $1,500 max — highest credit rate). Best by deduction limit: Colorado, New Mexico, South Carolina, West Virginia (unlimited deduction; in-state plan only).

Q Should I use a 529 or Coverdell ESA?

529 is almost always better. 529 has no income limit, much higher contribution limits, broader expense coverage, state benefits, $20K K-12 (2026 OBBBA), and Roth rollover option. Coverdell capped at $2K/yr with income phase-out at $95K/$190K — no advantage anymore. Most Coverdells should be rolled into 529s.

Q What happens if my child doesn't go to college?

529 funds remain in the account. Options: (1) change beneficiary to another family member (sibling, niece/nephew, cousin, parent, yourself), (2) hold for grad school later, (3) use $10,000 lifetime for student loan repayment, (4) roll up to $35,000 to beneficiary's Roth IRA (SECURE 2.0), (5) take non-qualified withdrawal — earnings taxable + 10% penalty.

Q Does grandparent 529 affect financial aid?

Pre-2024: grandparent-owned 529 distributions counted as student income, hurting FAFSA aid by 50¢ per $1. NEW FAFSA Simplification Act (effective 2024-25 award year): grandparent 529 distributions NO LONGER count as student income. Grandparent 529s are now equivalent or better than parent 529s for financial aid purposes.