Minnesota taxpayers are eligible for a state income tax deduction or credit, depending on their adjusted gross income. 529 plans typically increase the contribution limit over time, so you may be able to contribute more. Funds can often be used for any type of education, so a 529 plan can help to fund private school education for your children as well as college tuition. The amount of your 529 plan state income tax benefit will depend on where you live and how much you contribute to a 529 plan during a given tax year. Other Benefits: Maine residents can receive matching grants. This includes both single contributors and married couples filing jointly. The minimum subsequent contribution is $50. Maine residents who contribute to any state's Section 529 plan used to receive a state income tax deduction of up to $250 per beneficiary per tax return. If, however, you have stocks that have lost money, you could come up with the cash and deduct your losses. Additionally, NexGen rules state that you can also use up to $10,000 a year from your 529 savings account and put it toward the beneficiary's elementary or secondary public, private, or religious school tuition-free of federal income tax. State income tax benefit: Maine offers no state income tax deduction for 529 plan contributions. Out-of-state participants still get the federal tax benefits. NextGen- Maine's 529 College Savings Plan. Depending on which option you choose, you'll be given different investment options at varying costs. However, in 10 states only the 529 plan account owner (or the account owner’s spouse) may claim a state income tax benefit. More than 30 states, plus the District of Columbia, offer a 529 tax deduction or credit, allowing you to write off 529 contributions and lower your state income tax burden. Residency: NextGen College Investing Plan – Select Series is open to all United States residents, not just those in Maine. 529 Savings Calculator for Private K-12 Tuition, Revised Pay As You Earn Repayment Calculator. State-by-state outline of the various state section 529 plan deductions. Visit individual plan websites for current information about fund expenses, minimum contributions and other information. Older workers in many fields are feeling the urge — or the push — to retire. The state may list a specific group of people. One of the big perks of using a 529 plan to save for college is that many states offer a tax deduction for contributions to the plan. Use our Financial Aid Calculator to estimate the expected family contribution (EFC) and your financial need. Some states, such as Iowa and Missouri, only let the account owner take a deduction. All earnings can grow without being subject to federal (and sometimes state) income tax. Residency: NextGen College Investing Plan – Direct Series is open to all United States residents, not just those in Maine. You can learn more about this Maine 529 plan at the official website. 529 plan contributions that qualify for a prior year income tax deduction. Some states require you to contribute to their state's plan, while other states allow you to take the tax deduction for contributions to any state's plan. If your state has a low limit and no carryforward, you may want to spread your contributions over several years to make the most of the tax break. See all direct sold in-state and out-of-state 529 plans available to Maine residents and … Please contact a financial advisor in your state for assistance. The latest articles and tips to help parents stay on track with saving and paying for college, delivered to your inbox every week. § In New Mexico, South Carolina, Virginia and West Virginia 529 plan contributions are fully deductible in computing state income tax. The nuances of each state's rules are complicated, so it's essential to ask your state's plan about the specifics. Medicare Part A and Part B leave some pretty significant gaps in your health-care coverage. Here's a closer look at what isn't covered by Medicare. We are looking to set up a 529 college-savings plan for our children. How 529 plan state income tax benefits work. Join other Financial Advisors receiving FREE personalized market updates and research. Tax Deductions for Contributions to 529 College-Savings Plans Donating stock to a 529 plan isn't allowed, but your cash contributions may qualify for a state tax … Students and their families must be ready to adapt to the changes in the way they attend—and possibly pay for—college. Type: Advisor. All Rights Reserved 444 Brickell Avenue, Suite 820 Miami, FL 33131 Phone: (585) 286-5426, Original Post: 2017-08-09  Update 2019-02-11. The question is, are they ready? It’s not much of a tax benefit – only about $20 in savings if you happen to be in the top tax bracket of 7.95%, but if you’re going to contribute to a college savings plan anyway , it’s worth remembering to get your deduction on the state return. Your feedback matters! Your personalized experience is almost ready. For most taxpayers, there is no requirement to hold funds in a 529 plan for a specified amount of time before claiming a state income tax benefit. Virginia is the rare state where contributions from a nonowner are deductible by the account owner. A few “parity” states extend those tax benefits even if you pick a 529 plan from another state. No - per Page 2 of the 2016 Maine Form 1040ME instructions, for tax years beginning on or after January 1, 2016, the deduction for contributions to 529 plans (formerly found on Schedule 1, Income Modifications) has been repealed: For tax years beginning on or after January 1, 2016, the following Since 2016, contributors are no longer eligible for Maine state tax deductions. Maine 529 Plan Deduction Maine offers a state income tax deduction for the first $250 contributed to a 529 plan each year. 36 M.R.S. You may only contribute cash to a 529 account. States typically offer state income tax benefits to any taxpayer who contributes to a 529 plan, including grandparents or other loved ones who give the gift of college. Some states permit only the account owner to take the deduction. Tax Deductions for Contributions to 529 College-Savings Plans Donating stock to a 529 plan isn't allowed, but your cash contributions may qualify for a state tax … Maine residents who contribute to any state's Section 529 plan used to receive a state income tax deduction of up to $250 per beneficiary per tax return. However, there are still some tax advantages for contributors to be aware of. If you made contributions prior to this date, you can still claim them if you haven't already done so by filing an amended return for that year. A child can be the beneficiary of an unlimited number of plans. While there are no annual contribution limits for 529 plans, most states limit the amount of contributions that qualify for an income tax credit or deduction. Join other Institutional Investors receiving FREE personalized market updates and research. However, there are seven tax parity states that offer a state income tax benefit for contributions to any 529 plan: In the majority of states, the full amount or a portion of a taxpayer’s 529 plan contribution is deductible in computing state income tax. There are no time limits imposed on 529 plan accounts, so families may continue to make contributions throughout the child’s elementary school, middle school, high school, college years and beyond.