I can’t believe it’s almost the end of 2018. Where did the year go? It seems like I was just setting my goals for the year, and *woosh!*another year is almost at its close. Before the year ends, though, make sure you get your kids’ college savings in order. You don’t want to let the tax year go by without taking advantage of savings opportunities – and with the holidays coming up, it’s the perfect time to give (or receive) the gift of college!
If you stay tuned to the end of this article, you’ll have a chance to enter the CHET Gift of College gift card giveaway sponsored by CHET, Connecticut’s 529 plan. You can use the $50 gift card to give the gift of college to others, or for your own kids. I’m so excited for the opportunity to bring this to you!
Update – The giveaway is now closed! THank you so much to those that entered before the deadline. The winner has been contacted! Look for more giveaways in the future.
Now, lets talk about how you should look at your kids’ college savings as the year comes to a close.
This article was sponsored by Connecticut’s 529 plan CHET – the Connecticut Higher Education Trust. You can learn more about some of CHET’s awesome features in my prior article about it!
The End Of The Tax Year Approaches
Another year has flown by. Your kids are now one year older, and college is one year closer. Before the year wraps up, you want to check to make sure you’re getting all the tax advantages you are eligible for (or can afford) before December 31st.
I mentioned last month how one of the reasons I was doing a “no/low spend November” challenge was to hit my college savings goals for my boys this year. Part of the reason I want to make sure I hit it by December 31st is so I can take advantage of as much of the 2018 tax deduction as I can.
A 529 plan is a powerful tax savings machine for your children’s college education. Contributions grow tax-free, and you can take out your principal and earnings tax-free, for qualified higher education expenses. But when you throw in state tax advantages, as are available in some states (like mine), the tax savings really add up.
Every state has different rules when it comes to state tax savings on 529 plans. Some states don’t let you deduct contributions at all. Others give you a deduction, but only up to a certain amount. Those amounts are different in every state, and the states have different rules about whether you can deduct contributions to any 529 plan, or just to the ones run by their state.
State By State Deductions And Credits
Interested to know exactly what that looks like? Let’s make a table to see what the situation is across the country. Source can be found here.
| State | Deduction Amount | Do you need to use your states 529? |
| Alabama | $5,000 for a single taxpayer, $10,000 for married filing jointly. NOTE: Not available for Enable Savings Plan Alabama | Yes |
| Alaska | Not applicable | N/A |
| Arizona | $2,000 for a single taxpayer, $4,000 for married filing jointly. NOTE: Not available for the AZ ABLE plan | Yes |
| Arkansas | $5,000 for a single taxpayer, $10,000 for married filing jointly. For rollover contributions, you can deduct $7,500 for a single taxpayer, $15,000 for married filing jointly | For other states, $3,000 for a single taxpayer, $6,000 for married filing jointly |
| California | Not applicable | N/A |
| Colorado | Unlimited | Yes |
| Connecticut | $5,000 for a single taxpayer, $10,000 for married filing jointly. | Yes |
| Delaware | Not applicable | N/A |
| District of Columbia | $4,000 for a single taxpayer, $8,000 for married filing jointly. NOTE: Not available for the ABLE plan | Yes |
| Florida | Not applicable | N/A |
| Georgia | $2,000 for a single taxpayer, $4,000 for married filing jointly. NOTE: Not available for the GA STABLE plan | Yes |
| Hawaii | Not applicable | N/A |
| Idaho | $6,000 for a single taxpayer, $12,000 for married filing jointly. | Yes |
| Illinois | $10,000 for a single taxpayer, $20,000 for married filing jointly. NOTE: Not available for the ABLE plan | Yes |
| Indiana | A 20% tax credit on up to $5,000 per year in contributions (up to $1,000 credit). NOTE: Not available for the ABLE plan | Yes |
| Iowa | $3,319 for a single taxpayer, $6,638 for married filing jointly. NOTE: Not available for the ABLE plan, but you can deduct up to $3,239 for rollovers to the ABLE plan from a non-IA plan | Yes |
| Kansas | $3,000 for a single taxpayer, $6,000 for married filing jointly. NOTE: Not available for the KS ABLE plan | No |
| Kentucky | Not applicable | N/A |
| Louisiana | $2,400 for a single taxpayer, $4,800 for married filing jointly. NOTE: Contributions to START K12 accounts aren’t deductible | Yes |
| Maine | Not applicable | N/A |
| Maryland | $2,500 for a single taxpayer, $5,000 for married filing jointly. NOTE: The MD Prepaid College Trust allows $2,500 per year, while the ABLE account allows $2,500 per beneficiary per year | Yes |
| Massachusetts | $1,000 for a single taxpayer, $2,000 for married filing jointly. NOTE: Not available for Attainable Savings MA | Yes |
| Michigan | $5,000 for a single taxpayer, $10,000 for married filing jointly. | Yes |
| Minnesota | Either $1,500 for a single taxpayer, $3,000 for married filing jointly OR a tax credit of 50% of the contribution, up to a credit of $500, for those with an AGI under $75k (phase out starts then) NOTE: Not available for the ABLE plan | Yes |
| Mississippi | $10,000 for a single taxpayer, $20,000 for married filing jointly. | Yes |
| Missouri | $8,000 for a single taxpayer, $16,000 for married filing jointly. | Yes |
| Montana | $3,000 for a single taxpayer, $6,000 for married filing jointly. NOTE: Not available for MO ABLE | No |
| Nebraska | $10,000, $5,000 for married filing separately. | Yes |
| Nevada | Not applicable | N/A |
| New Hampshire | Not applicable | N/A |
| New Jersey | Not applicable | N/A |
| New Mexico | Unlimited. NOTE: Not available for the ABLE plan | Yes |
| New York | $5,000 for a single taxpayer, $10,000 for married filing jointly. NOTE: Not available for ABLE plans | Yes |
| North Carolina | Not applicable | N/A |
| North Dakota | $5,000 for a single taxpayer, $10,000 for married filing jointly. | Yes |
| Ohio | $4,000 per beneficiary per year | Yes |
| Oklahoma | $10,000 for a single taxpayer, $20,000 for married filing jointly. NOTE: Not available for OK STABLE plans | Yes |
| Oregon | $2,375 for a single taxpayer, $4,750 for married filing jointly. NOTE: ABLE plans are deductible for $2,330 for single, $4,660 for joint filers | Yes |
| Pennsylvania | Can deduct up to $15,000 per beneficiary. NOTE: not available for ABLE plans | No |
| Rhode Island | $500 for a single taxpayer, $1,000 for married filing jointly. NOTE: Not available for ABLE plans | Yes |
| South Carolina | Unlimited. NOTE: SC ABLE plan deductions are limited to $14,000 | |
| South Dakota | Not Applicable | N/A |
| Tennessee | Not applicable | N/A |
| Texas | Not applicable | N/A |
| Utah | Contributions of up to $1,960 per beneficiary for single; $3,920 per beneficiary for married filing jointly are eligible for a 5% credit | Yes |
| Vermont | Contributions of up to $2,500 per beneficiary for single; $5,000 per beneficiary for married filing jointly are eligible for a 10% VT tax credit. NOTE: Not available for the ABLE plan | Yes |
| Virginia | Up to $4,000 per account per year. NOTE: ABLE plans are $2,000 per account | Yes |
| Washington | Not applicable | N/A |
| West Virginia | Unlimited. NOTE: Not available for ABLE plans | N/A |
| Wisconsin | Up to $3,200 per beneficiary per year. | Yes |
| Wyoming | Not applicable | N/A |
Now, To The Giveaway!
Update – The giveaway is now closed!
For ONE lucky winner, I’ve got two $25 CHET Gift of College gift cards – that’s $50! – perfect for any child on your list.
How to enter? It’s easy! There are two ways to enter – commenting below with your college dreams for the intended
Just click the box below to get started entering the contest!
a Rafflecopter giveawayRedeeming the CHET Gift of College gift card is easy, visit: www.aboutchet.com/redeem and follow these steps:
- Register and create a profile with Gift of College.
- Connect your CHET 529 account with your Gift of College account.
- Enter your gift card information through your account profile.
Note: It may take up to seven days for the funds to appear in the account.
I’ll be contacting the winner next weekend – good luck!
P.S. Even if you’re not a winner, these would make a great gift idea for the special kids in your life.
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Thanks for the chance to win!
I don’t have a twitter account so guess I can’t enter 🙁
You should be able to enter with a comment. Is that not showing up as an option?
Hi! We are in NC and I noticed you have N/A listed in your chart for NC. Can I ask why that is? Thanks!
Hi Leslie-it’s because NC doesn’t offer a state tax deduction for 529 contributions. It was eliminated in 2014
Great contest! My kids are young, so at $25 a piece it should be worth many times more by the time they go to college.
Thanks Liz for the reminder of how great a gift like this can be perfect for the holidays. Nice giveaway too
Thanks for the contest!
Thanks for this giveaway! Max and Charles, this is for you – may you have the choice to followfyour wildest dreams 🙂
This kind of gift card is great!! I’ve never heard of anything like this… And thanks for the reminder about 529 savings for the year!
Isn’t it a wonderful idea?
What a great idea for a giveaway! My parents always prioritized going a college education for me and my siblings (because they were not able to go back in their day) so I am hoping to help my daughter ( currently 1st grade) reach her dreams by helping her as much as I can with her education.
What a wonderful idea, thanks for the opportunity to increase my kids college savings.
What a fun giveaway! My son is turning 12 on Wednesday so it’s always a great time to save for college! We talk a lot with him already about college and the cost, I would love for him to come out of school with significantly less student debt than my husband and I! Thanks!
This is a great idea. I have a son, who is an engineer waiting to happen. He is always inventing things and dreaming up new ideas. My brother took him on a tour of his university, and after seeing the robotics lab, my son wants to go to BYU too. This blog is such a breath of fresh air! I feel like so many in the FIRE community are young singles or couples without kids, which is fine. But having a big family totally changes the conversation about money, savings, and retirement. Thanks for your perspective!
I have a friend in Connecticut with twin boys around age 5. I’m sure if I win the cards, she would be surprised and delighted.
I know if I ever won a humongous lottery, college scholarships for my friend’s kids would be on my list. Since I don’t buy lottery tickets, I suppose this is a good alternative. 🙂
Thank you for sharing!!
Good luck to all who enter, I know the prize will go to good use by anyone who wins!!
Fellow Nutmegger here. We opened a CHET for our daughter at the beginning of this year (she was born last October). I just hope college doesn’t cost $800,000 when she gets to that age! Thanks for this nice resource, and great giveaway!
Are you part of the Choose FI CT group? There’s a meetup this weekend
I am, actually. I haven’t made it to a meeting yet, but Firefly Hollow is really tempting!
I’ll be there-hope you can make it!
Saving toward the future.
Single mom with two kids…I just hope to make their dreams come true as they get older!