Does your client qualify for a state tax benefit for their my529 contributions?
With tax season here, you may want to educate your clients about potential state income tax deductions or credits available for 529 contributions. All 529 plans offer federal tax benefits but what about potential state income taxes? Twenty-eight out of 50 states offer tax incentives for contributions made to their own 529 plans in the account owner’s state of residence.
But what’s the situation in the remaining 22 states? Among them, 13 states do not provide any state tax incentive. The other nine are known as parity states.
What does “parity” mean in the context of 529 plans?
In the 529 industry, “parity” refers to states that allow account owners to claim a state tax benefit for contributions made to any 529 plan, regardless of whether that plan is offered by that particular state or elsewhere.
The parity states are:
- Arizona
- Arkansas
- Kansas
- Maine
- Minnesota
- Missouri
- Montana
- Ohio
- Pennsylvania
Clients may find that the state where they reside or pay taxes offers a 529 plan with additional benefits, such as certain state tax advantages, financial aid eligibility, scholarship opportunities or creditor protection, which may not be available through Utah’s my529. It’s essential to evaluate these potential benefits before deciding to invest in my529.
Please check out our map of state tax benefits.
From the FAN — Spring 2026
