Compare 529 Plans by Features

State tax recapture provisions

If the Designated Beneficiary stays the same, the transfer will be treated as an income tax-free Qualified Rollover Distribution as long as the transfer does not occur within 12 months from the date of a previous rollover to another 529 qualified tuition program for the Designated Beneficiary.

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The principal portion of nonqualified withdrawals from this plan are included in Arizona taxable income to the extent of prior Arizona tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability, withdrawals made on account of the beneficiary's receipt of a scholarship, or rollovers.

Arkansas state tax deductions will be subject to recapture in subsequent years if Non-Qualified Withdrawals are made or the Arkansas taxpayer rolls the Account over to a tax deferred tuition savings program established by another state.

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The portion of the withdrawal attributable to contributions previously deducted for Colorado income tax purposes is subject to recapture and must be added to the taxable income of the taxpayer who took the deductions, in the year in which the withdrawal is made. The recapture provision applies to a rollover to a non-Colorado Section 529 Plan or ABLE account.

The principal portion of rollovers and nonqualified withdrawals from this plan are included in Colorado taxable income to the extent of prior Colorado tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability or withdrawals made on account of the beneficiary's receipt of a scholarship.

The principal portion of rollovers and nonqualified withdrawals from this plan are included in Colorado taxable income to the extent of prior Colorado tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability or withdrawals made on account of the beneficiary's receipt of a scholarship.

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The principal portion of nonqualified withdrawals from this plan, and rollovers within two years of account opening, are included in District of Columbia taxable income to the extent of prior District of Columbia tax deductions. Nonqualified withdrawals for this purpose do not include withdrawals made as the result of the beneficiary's death or disability and withdrawals made on account of the beneficiary's receipt of a scholarship.

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Any portion of a rollover to another state's qualified tuition program, a Taxable Withdrawal, or a Non-Qualified Withdrawal that is attributable to contributions previously deducted for Georgia income tax purposes will be taxed to the Account Owner in the year of the withdrawal or rollover.

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The entire amount of non-qualified distributions must be included in Idaho taxable income. Outbound rollovers by Idaho taxpayers must be included in Idaho taxable income to the extent of amounts deducted on the Idaho return for the current year and for the prior year, effective January 1, 2008.

Effective January 1, 2007, rollovers from this plan to an out-of-state program are included in Illinois taxable income to the extent of prior Illinois deductions. Effective January 1, 2009, nonqualified distributions from this plan are included in Illinois taxable income to the extent of prior Illinois deductions.

The account owner (not the contributor) must repay all or part of the state income tax credit claimed by contributors in prior taxable years in a taxable year of the Recapture Distribution. A Recapture Distribution is a: non-qualified distribution (other than if the distribution is because of the death or disability of the beneficiary, or if the beneficiary received a scholarship that paid for all or part of the qualified expenses of the beneficiary (to the extent that the withdrawal or distribution does not exceed the amount of the scholarship), or a refunded distribution); distribution used to pay K-12 tuition for a school outside of Indiana; effective January 1, 2020, distribution used to make education loan repayments; rollover distribution; or termination of an account within twelve months after the account was opened.

An account owner must pay with the Indiana tax return a tax equal to the lesser of 20 percent of a nonqualified withdrawal from this plan, or the excess of (a) the total amount of all Indiana state income tax credits claimed by any contributor to the account for all taxable years beginning on or after January 1, 2007 over (b) the total amount of any repayments made for all taxable years beginning on or after January 1, 2008. Nonqualified withdrawals for this purpose include rollovers, distributions for K-12 tuition for a school outside of Indiana, education loan repayments (beginning 1/1/2020). Nonqualified withdrawals do not include withdrawals made as the result of the beneficiary's death or disability or withdrawals made on account of the beneficiary's receipt of a scholarship. Recapture will apply to any account terminated within 12 months from account opening date.

You can perform a federally tax-free rollover from College Savings Iowa to a non-Iowa 529 plan for the same Beneficiary once every 12 months. However, for Iowa income tax purposes, a rollover to a non-Iowa 529 plan will be treated as a nonqualified withdrawal and taxed as income to the extent previously deducted as a contribution to College Savings Iowa.

The principal portion of nonqualified withdrawals from this plan are included in Kansas taxable income to the extent of prior Kansas tax deductions. Rollovers are not subject to recapture.

The principal portion of nonqualified withdrawals from this plan are included in Kansas taxable income to the extent of prior Kansas tax deductions. Rollovers are not subject to recapture.

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The principal portion of nonqualified withdrawals from this plan are included in Louisiana taxable income to the extent of prior Louisiana tax deductions. Rollovers are not subject to recapture.

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The principal portion of nonqualified withdrawals from this plan are included in Maryland taxable income to the extent of prior Maryland tax deductions. Rollovers are not subject to recapture.

The principal portion of nonqualified withdrawals from this plan are included in Massachusetts taxable income to the extent of prior Massachusetts tax deductions.

The principal portion of nonqualified withdrawals from this plan are included in Michigan taxable income to the extent of prior Michigan tax deductions. Qualified rollovers are not subject to recapture.

Qualified Withdrawals and outgoing rollovers that are free from federal income tax are also free from Minnesota income tax, with the exception of withdrawals used for elementary and secondary school tuition, which are subject to Minnesota income tax.

The principal portion of nonqualified withdrawals from this plan are included in Mississippi taxable income to the extent of prior Mississippi tax deductions. A rollover to another 529 plan is not subject to recapture.

Rollovers to another state’s qualified 529 plan are not taxable for Missouri income tax purposes and are not subject to recapture on the Missouri income tax return.

Montana imposes a recapture tax on Non-Qualified Montana Distributions and distributions from an Account that was opened less than three years before the date of the distribution.

Nebraska state tax deductions are subject to recapture if the account owner cancels a Participation Agreement, makes a partial or complete Nebraska Non-Qualified Withdrawal or rolls assets to an out-of-state 529 qualified tuition program or ABLE program.

Nebraska state tax deductions are subject to recapture if the account owner cancels a Participation Agreement, makes a partial or complete Nebraska Non-Qualified Withdrawal or rolls assets to an out-of-state 529 qualified tuition program or ABLE program.

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In certain circumstances, the amounts deducted may be recaptured in subsequent years. For example, amounts previously deducted for New Mexico income tax purposes may be recaptured if they are distributed from the Plan to a Qualified ABLE program, including the ABLE program offered in the State of New Mexico or to another Qualified Tuition Program not offered by the State of New Mexico.

The Program has received a letter from the DTF advising that all Rollover Distributions from an Account to an account in a 529 plan outside of the Program that occur on or after January 1, 2003, will be treated as New York Nonqualified Withdrawals for New York State tax purposes. This tax treatment applies without regard to whether the Rollover Distribution results in income for federal tax purposes. This means that any portion of the Rollover Distribution that is earnings or for which a previous income deduction was taken will be included in your New York State gross income for that tax year and will be subject to recapture of any previously taken New York State income deductions.

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Any rollover withdrawal to another state's 529 Plan is subject to recapture of any State of Ohio tax deductions claimed in prior years.

Non-Qualified Withdrawals and rollovers from an Account to an account in another state's 529 Plan may cause the otherwise applicable deductions for contributions to be limited or recaptured. If such a withdrawal or rollover is made in the same year in which a contribution is made or during the five-year carryforward period, the taxpayer must reduce the tax deduction otherwise available for the contribution or carryforward by the amount of the withdrawal or rollover. Taxpayers who take a rollover to another state's 529 Plan with respect to a contribution, which for an Oklahoma deduction was taken, within one year of the date of the contribution must include the amount of such rollover in their adjusted gross income in the taxable year of the rollover.

The principal portion of nonqualified withdrawals from this plan are included in Oregon taxable income to the extent of prior Oregon tax deductions. Rollovers are not subject to recapture. K-12 distributions will be subject to state tax recapture if a deduction is claimed. Tax deductions received on K-12 withdrawals will be calculated into the amount owed the state for the current tax year. Also, any earnings tied to the K-12 withdrawal will count also as state taxable income.

Nonqualified distributions from any 529 plan are included by Pennsylvania taxpayers in Pennsylvania taxable income to the extent they are not a recovery of nondeductible contributions, following rules set forth in PIT Bulletin 2006-04. Rollovers are not subject to Pennsylvania tax.

Rhode Island requires the “recapture” of certain deductions in computing Rhode Island tax if you take a Non-Qualified Distribution or a Rollover Distribution into another state’s Qualified Tuition Program.

The principal portion of nonqualified withdrawals from this plan are included in South Carolina taxable income to the extent of prior South Carolina tax deductions. Rollovers apparently are not subject to recapture.

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If a Utah taxpayer rolls over funds to another 529 plan, and they have claimed a my529 Utah tax credit or deduction, there is a tax consequence. They must add back the amount of the rollover as income on their Utah state income tax form for the taxable year of the rollover—to the extent it was deducted or used in calculating the tax credit on their current or a previously filed Utah tax return.

Nonqualified withdrawals from this plan, is defined for the purposes of the tax credit, as all withdrawals except used exclusively for costs at an accredited institution, apprenticeship programs or when the beneficiary has died or has become disabled, are subject to recapture, to the extent of Vermont tax credits previously claimed. Outbound rollovers are not subject to recapture.

If an Account is cancelled for a reason other than the student's death, Disability, receipt of a scholarship (including attendance at a U.S. military academy), or Rollover to another Virginia529 account, any amount of the refund previously deducted from the Account Owner's Virginia taxable income as a result of Contributions to the cancelled Invest529 Account must be added back to the Account Owner's Virginia taxable income in the year the refund is received, in addition to any federal tax consequences.

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The principal portion of nonqualified withdrawals from this plan are included in West Virginia taxable income to the extent of prior West Virginia tax deductions. Rollovers apparently are not subject to recapture.

The principal portion of nonqualified withdrawals from this plan are included in West Virginia taxable income to the extent of prior West Virginia tax deductions. Rollovers apparently are not subject to recapture.

The Wisconsin 529 College Savings Program requires the use of a "first in, first out" method of accounting. Withdrawals taken within 365 days after a contribution has been made to the account must be added to Wisconsin income to the extent the contribution was previously deducted from Wisconsin income, the account balance was less than the withdrawal amount prior to the contribution, and the withdrawal has not otherwise been added back to Wisconsin income. Carry-over of contributions in excess of the maximum annual tax deduction threshold also must be added back to Wisconsin income if the carry-over amount was withdrawn from the account within 365 days of being carried over. Note: any carryover amounts will be reduced by any amount of a Non-Qualified Withdrawal that is not otherwise added back to Wisconsin income. Non-Qualified Withdrawals and rollovers to other 529 plans must be added back to Wisconsin taxable income, to the extent they were previously deducted from Wisconsin income.