529 College Savings Plans: Benefits and List of 529 Plans By State

A 529 plan is college savings account that offers a tax-advantaged way to invest money for qualified education expenses. Learn what a 529 is and compare plans to find the best 529 for you.
Erica Corbin
Alana Benson
By Alana Benson and  Erica Corbin 
Updated
Edited by Arielle O'Shea

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A 529 college savings account can be a strategic, tax-advantaged way to save for college — and these accounts have only gotten more appealing and flexible in recent years.

What is a 529 college savings plan?

A 529 is a tax-advantaged college savings account that can be used to pay for a beneficiary’s qualified education expenses, such as tuition or textbooks. While it was originally limited to higher education, the funds can now be used for kindergarten through grade 12 as well as certified apprenticeship programs and qualified student loan repayments, up to a limit.

There are two main types of 529 plans:

  • 529 college savings plans are the most common type and generally considered the best and most flexible 529 option. Investments grow tax-free and can be withdrawn tax-free for educational expenses such as tuition, room and board, and required textbooks.

  • 529 prepaid plans let you prepay part or all of an in-state public tuition, locking in the tuition at time of payment.

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529 plan benefits

There are a number of benefits to saving for college in a 529 account, especially when compared with a standard savings account or investment account:

  • 529 asset ownership: The money you save in a 529 plan is considered your own asset, rather than an asset of the beneficiary. This arrangement is preferred when it comes to financial aid formulas.

  • Tax-deductible contributions: As you can see on the list below, many states offer a state tax deduction for contributing to a 529 plan. This means that in some states, you may be able to deduct 529 contributions — often up to a limit — from income, potentially reducing your state tax burden.

  • Simplified investment options: Many 529 plans offer a small selection of age-based investment options, similar to the you might be used to seeing in retirement accounts. This makes investing your college savings fairly straightforward.

  • Tax-advantaged investment growth: The money you earn by investing your contributions grows tax-deferred, which means it isn't subject to capital gains taxes on an annual basis. And when you use distributions to pay for qualified education expenses, they are tax-free. This means you may never pay taxes on the investment earnings in the account. (However, if you need to take a distribution for a non-qualified expense, you may owe income taxes and 10% penalty on the earnings.)

  • Somewhat flexible: You can change the beneficiary on your 529 account, which means if one child decides not to go to college or use the funds for a qualifying expense, you could redirect the funds to another family member. In Dec. 2022, the Secure Act 2.0 added additional flexibility beyond that: Once a 529 account has been open for 15 years, beneficiaries can roll up to $35,000 from the account into their Roth IRA

    SECURE 2.0 Act of 2022. Expanding Coverage and Increasing Retirement Savings. Accessed Mar 19, 2024.
    . This is a lifetime limit, but the rollovers count toward Roth IRA annual contribution limits.

How do I find the best 529 plans?

The best 529 plan for you is going to depend on your investment goals and the state where you live, because these plans can vary widely by state (as can the associated tax benefits for 529 contributions). Start by looking at your state’s plans. Unlike retirement and other investment accounts, 529 savings plans are typically operated by states, which makes searching for the best option fairly easy. If your state offers a tax deduction for contributing, you’ll likely get the most bang for your buck by contributing to its plan.

🤓Nerdy Tip

Looking to save a little money? Consider direct-sold 529 plans, which are sold by the state, rather than through an advisor. Cutting out the middleman, so to speak, often results in lower fees. Just know that you'll be responsible for managing your investment.

You don't have to contribute to your state’s plan, though. You’re free to choose any plan you’d like, so it’s worth comparing your options. Plus, some states offer more than one 529 plan to consider.

529 plans by state

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You can find detailed information about each state's 529 plan below, including the minimum contribution you'll have to make to start an account. We also have a list of 529 contribution limits by state.

State

Plan Name

Tax benefit for in-state contributors?

Minimum contribution

Alabama

Yes

$0

Alaska

No

$25

Arizona

Yes

$25 or less

Arkansas

Yes

$25

California

No

$0

Colorado

Yes

$25

Connecticut

Yes

$0

Delaware

No

$0

District of Columbia

Yes

$25

Florida

No

$0

Georgia

Yes

$25

Hawaii

Yes

$15

Idaho

Yes

$25

Illinois

Yes

$0

Indiana

Yes

$10

Iowa

Yes

$25

Kansas

Yes

$0

Kentucky

No

$25

Louisiana

Yes

$10

Maine

No

$25

Maryland

Yes

$25

Massachusetts

Yes

$0

Michigan

Yes

$25

Minnesota

Yes

$25

Mississippi

Yes

$25

Missouri

Yes

$1

Montana

Yes

$25

Nebraska

Yes

$0

Nevada

No

$15

New Hampshire

No

$0

New Jersey

No

$25

New Mexico

Yes

$1

New York

Yes

$0

North Carolina

No

$25

North Dakota

Yes

$25

Ohio

Yes

$25

Oklahoma

Yes

$100

Oregon

Yes

$25

Pennsylvania

Yes

$10

Rhode Island

Yes

$0

South Carolina

Yes

$0

South Dakota

No

$250

Tennessee

No

$25

Texas

No

$25

Utah

Yes

$0

Vermont

Yes

$25

Virginia

Yes

$10

Washington

No

$25

West Virginia

Yes

$1

Wisconsin

Yes

$25

Wyoming

No plan available.

Table updated as of Aug. 30, 2023.

Prepaid 529 plans by state

This table shows only prepaid plans. Note that the minimum contributions required depend on the cost of a credit or the monthly payment plan. You'll need to check the specific plan for the correct minimum.

Table updated as of Aug. 30, 2023.

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