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    How Much Can You Contribute to a 529 Plan In 2024?

    By Gabriel Jimenez-Ekman

    Gabriel Jimenez-Ekman is a content editor and writer at Scholarships360. He has managed communications and written content for a diverse array of organizations, including a farmer’s market, a concert venue, a student farm, an environmental NGO, and a PR agency. Gabriel graduated from Kenyon College with a degree in sociology.

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    and Kira Ranieri

    Kira is a content writer at Scholarships360. Kira earned a Bachelor of Media and Journalism with a concentration in Advertising and Public Relations from the University of North Carolina at Chapel Hill.

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    Reviewed by Annie Trout

    Annie has spent the past 18+ years educating students about college admissions opportunities and coaching them through building a financial aid package. She has worked in college access and college admissions for the Tennessee Higher Education Commission/Tennessee Student Assistance Corporation, Middle Tennessee State University, and Austin Peay State University.

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    Edited by Maria Geiger

    Maria Geiger is Director of Content at Scholarships360. She is a former online educational technology instructor and adjunct writing instructor. In addition to education reform, Maria’s interests include viewpoint diversity, blended/flipped learning, digital communication, and integrating media/web tools into the curriculum to better facilitate student engagement. Maria earned both a B.A. and an M.A. in English Literature from Monmouth University, an M. Ed. in Education from Monmouth University, and a Virtual Online Teaching Certificate (VOLT) from the University of Pennsylvania.

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    Updated: July 9th, 2024
    How Much Can You Contribute to a 529 Plan In 2024?

    529 Plans are an invaluable tool to help save for college, so it’s important to understand their contribution limits. 529 Plans are unique because they can qualify you for a wide spread of tax benefits. These benefits can come from federal and state tax exemptions. Here are the overall 529 Plan contribution limits, as well as the limits for each of the benefits it can provide.

    Related: What is a 529 Plan?

    Limits on total balance

    The total balance of a 529 Plan cannot exceed the projected total costs of the beneficiary’s higher education. This includes the cost of tuition, books, room, and board. Higher education can include both an undergraduate and a graduate degree. Each state calculates its own projected cost, and they are typically over $230,000. If your balance is getting close to $230,000, you should check your state-specific limit.

    This total limit typically does not inhibit anyone from contributing. Because 529 Plans only provide tax benefits for educational expenses, there is no incentive to exceed the contribution limit. However, if you do approach the limit, don’t worry about exceeding it. It’s no cause for concern if your last contribution puts you over the limit. You’ll be able to keep that extra money in the account, but you won’t be able to contribute any more.

    Don’t miss: How much to save for college

    Yearly contribution limits

    529 Plans do not have an annual contribution limit. You can contribute as much as you’d like to a 529 Plan per year, but there are some caveats. If you contribute an especially large sum in one year, you may lose eligibility for some tax benefits. Here is a rundown of how those benefits work.

    Learn more: How to choose a 529 Plan

    The gift tax exclusion

    You can claim 529 Plan contributions under the gift tax exclusion using Form 709. This exclusion renders contributions exempt from federal taxes. But it should be noted that this exclusion has a $18,000 annual limit for individuals, and $36,000 annual limit for married couples. If you exceed this limit, your excess funds will count against your lifetime estate and gift tax limit. However, this limit is set at $13.61 million, so if you are not in danger of exceeding it, don’t worry. Your gift will still be exempt from federal taxes.

    You can also contribute up to $90,000 in one year without exceeding your yearly limit if you utilize 529 superfunding. This allows you to max out your contributions for the next 5 years all at once. This tool is commonly used in making plans for someone’s estate.

    Read more: How much is the 529 tax deduction worth?

    State income tax benefits

    Each state offers income tax benefits for 529 Plan contributions. Contributions made to a 529 Plan can be deducted from state taxable income up to a certain yearly limit. This amount varies by state; in Illinois, it is $10,000 for individuals and $20,000 for joint contributors, but in Iowa it is only $3,785. These state benefits are independent of federal tax benefits.

    Read more: What are the 529 Plan rules?

    Next Steps

    Next Steps

    • Decide which kind of 529 plan is right for you and your family. 
    • Start making a strategy for how to time your 529 Plan deposits and look into the tax benefits of making your deposits over a long period of time.
    • By making long term deposits, you’ll be able to preserve your lifetime estate and gift tax limit, as well as claim your maximum state income tax.
    • Don’t let the overall limit on your account sum inhibit you! I should be able to cover all your educational expenses. 

    Also read: How to pay for college (A step-by-step guide)

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    Frequently asked questions about 529 contributions

    Does contributing to a 529 reduce taxable income?

    529 contributions are never deductible on your federal taxes, but you might be able to deduct them from your state taxes. You’ll have to check your specific 529 plan servicer to find out if you can make any state income tax deductions. Each state sets different rules, so they will have the most current and relevant information.

    How much can I contribute to my grandchildren's 529 plan?

    As a grandparent, you might be wondering if you are subject to other 529 contribution limits. Luckily, when it comes to 529 plan contributions, grandparents are in the exact same boat as parents.

    You can contribute as much as you’d like, although the account balance cannot exceed the total cost of a four-year education. If you are using the Gift Tax exclusion, keep in mind that you’ll have a $15,000 annual limit, unless you utilize superfunding. Check the information above for clarification on Gift Tax annual limits.

    Is food in college a qualified 529 expense?

    You can use 529 funds for room and board, which includes food, as well as other food expenses, as long as the student is enrolled at least half-time. So, for students who are studying at least half-time, food is a qualified 529 expense.

    Can having a 529 plan impact my financial aid?

    It is possible that having a 529 plan could affect your financial aid, but it still is very unlikely that it will be a heavy enough impact to make saving for college not worth it. There are also some ways to lessen its impact.

    What if I get a scholarship or no longer plan on going to college?

    Prior to 2024, all funds in a 529 plan had to be put towards education expenses in order to be withdrawn. Now, thanks to a new bill recently passed by Congress called “Secure 2.0,” after 15 years funds from a 529 plan can be moved into a Roth IRA account, which is a retirement savings account. So now, even if your 529 plan ends up not being used for education, it can be put towards retirement without penalty or income tax. It’s important to note that these rollovers will have to adhere to the Roth IRA annual contribution limits and the lifetime cap, which is $35,000.

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