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Tax 8 min read
Which states give you a 529 tax deduction? (And how much.)
32 states plus DC offer a state income-tax deduction or credit for 529 contributions. Here's the state-by-state breakdown, with the gotchas.
Most parents focus on the federal tax-free growth benefit of a 529, but for many families the state tax break is the more immediate win — money back in your pocket this April.
How state tax benefits work
States generally do one of three things: offer a deduction against your state income (reducing your taxable income), offer a tax credit (reducing your tax owed directly), or — in nine states — offer nothing at the state level.
Some states only give the benefit if you use their state's 529 plan. Others (like Pennsylvania, Arizona, and a few more) let you contribute to any state's 529 and still claim the deduction.