How much can you contribute to a 529 plan?

That’s where it can get tricky since the IRS doesn’t specify annual 529 plan contribution limits, and many 529 plans offer high total contribution limits. There is no annual limit, but each state sets the aggregate limit for 529 accounts. The totals vary but could be as high as $550,000.

What is a state 529 limit?

The limits are intended to allow coverage of all college costs that are considered qualified higher education expenses. Once the combined balances of a beneficiary’s in-state 529 plans hit the state’s aggregate limit, no additional contributions can be made to any 529 plan administered by that state.

How much can you deduct from a 529 plan?

In Massachusetts, for example, savers can deduct only $1,000 in 529 contributions ($2,000 for a married couple filing jointly), while in Colorado, the 2023 limit is $20,700 ($31,000 for joint filers). Each state’s 529 plan vendor sets its own aggregate contribution limit.