529 Plan Tax Deduction Calculator 2025
Calculate your state tax savings from 529 college savings plan contributions by state
Your Information
New York 529 Plan Benefits
Deduction Limit: $10,000
State Tax Rate: 6.8%
Tax Benefit Analysis
Complete Guide to 529 Plan Tax Benefits
Understanding 529 Plan Tax Advantages
529 education savings plans offer multiple tax benefits that make them one of the most effective ways to save for education expenses. While contributions are made with after-tax dollars, many states offer tax deductions or credits for contributions, and all earnings grow tax-free when used for qualified education expenses.
State Tax Benefits Overview
Tax Deductions vs. Tax Credits
Tax Deductions
Most states offer tax deductions, which reduce your taxable income:
- • Reduces taxable income dollar-for-dollar
- • Benefit equals deduction × tax rate
- • Example: $5,000 deduction × 5% rate = $250 savings
- • More valuable in higher tax brackets
Tax Credits
A few states offer tax credits, which directly reduce taxes owed:
- • Direct dollar-for-dollar tax reduction
- • More valuable than deductions
- • Example: $500 credit = $500 tax savings
- • Usually have lower limits than deductions
Disclaimer: This calculator provides estimates based on current state tax laws as of 2025. Tax laws change frequently and vary by state. The calculator does not account for all possible scenarios or state-specific rules. Always consult with a qualified tax professional or financial advisor for advice specific to your situation.