How parents of college students can save 20% on tuition yet this year

If you are the parent of a college student, and you have a tuition bill coming after the first of the year, then you need to read this post very very carefully. I want to show you how to get a 20% tuition discount. There are some rules, stipulations, and exceptions, but this will work for thousands of thousands of people.

Many states offer a tax credit for contributions made into the state 529 college savings plan. For instance, Indiana offers a 20% credit for contributions made up to $5,000. That would mean if you put in $5,000, then you would receive a $1,000 tax credit. Below is a list of states, and the tax advantages of each 529 plan.

State

529 Deduction

Alabama

$5,000 per parent ($10,000 joint)

Alaska

No state income tax

Arizona

$750 single or head of household/$1,500 joint (any state plan)

Arkansas

$5,000 per parent ($10,000 joint)

California

--

Colorado

Full amount of contribution

Connecticut

$5,000 per parent ($10,000 joint), 5 year carryforward on excess contributions

Delaware

--

Florida

No state income tax

Georgia

$2,000 per beneficiary

Hawaii

--

Idaho

$4,000 single/$8,000 joint

Illinois

$10,000 single/$20,000 joint per beneficiary (25% tax credit for employers for matching contributions up to $500 per employee)

Indiana

20% tax credit on contributions up to $5,000 ($1,000 maximum credit)

Iowa

$2,811 single/$5,622 joint per account

Kansas

$3,000 single/$6,000 joint per beneficiary (any state plan), above the line exclusion from income

Kentucky

--

Louisiana

$2,400 single/$4,800 joint per beneficiary, above the line exclusion from income, unlimited carryforward of unused deduction into subsequent years

Maine

$250 per beneficiary starting 2007 (any state plan), above the line exclusion from income, phaseout at $100,000 single/$200,000 joint

Maryland

$2,500 per account per beneficiary, 10 year carryforward

Massachusetts

--

Michigan

$5,000 single/$10,000 joint, above the line exclusion from income

Minnesota

--

Mississippi

$10,000 single/$20,000 joint, above the line exclusion from income

Missouri

$8,000 single/$16,000 joint, above the line exclusion from income

Montana

$3,000 single/$6,000 joint, above the line exclusion from income

Nebraska

$5,000 per tax return ($2,500 if filing separate), above the line exclusion from income

Nevada

No state income tax

New Hampshire

--

New Jersey

--

New Mexico

Full amount of contribution, above the line exclusion from income

New York

$5,000 single/$10,000 joint, above the line exclusion from income

North Carolina

$2,500 single/$5,000 joint, above the line exclusion from income

North Dakota

$5,000 single/$10,000 joint

Ohio

$2,000 per beneficiary per contributor or married couple, above the line exclusion from income, unlimited carryforward of excess contributions

Oklahoma

$10,000 single/$20,000 joint per beneficiary, above the line exclusion from income, five-year carryforward of excess contributions

Oregon

$2,090 single/$4,180 joint (i.e., $2,090 per contributor) per year, above the line exclusion from income, four-year carryforward of excess contributions

Pennsylvania

$13,000 per contributor per beneficiary (any state plan)

Rhode Island

$500 single/$1,000 joint, above the line exclusion from income, unlimited carryforward of excess contributions

South Carolina

Full amount of contribution, above the line exclusion from income

South Dakota

No state income tax

Tennessee

--

Texas

No state income tax

Utah

5% tax credit on contributions of up to $1,740 single/$3,480 joint per beneficiary (credit of $87 single/$174 joint)

Vermont

10% tax credit on up to $2,500 in contributions per beneficiary (up to $250 tax credit per taxpayer per beneficiary)

Virginia

$4,000 per account per year (no limit age 70 and older), above the line exclusion from income, unlimited carryforward of excess contributions

Washington, DC

$4,000 single/$8,000 joint, above the line exclusion from income

Washington

No state income tax

West Virginia

Full amount of contribution up to extent of income, above the line exclusion from income, five-year carryforward of excess contributions

Wisconsin

$3,000 per dependent beneficiary, self or grandchild, above the line exclusion from income

Wyoming

No state income tax