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Ohio 529 Plan Deduction Doubles to $4,000

Tim Cistone, CPA

February 13, 2018

Beginning on Jan. 1, 2018, the state income tax deduction for contributions made to a CollegeAdvantage 529 plan doubles from $2,000 to $4,000 per beneficiary, per year. This increase heightens the advantages of saving for college costs in Ohio’s 529 Plan.

When the State of Ohio’s biennial budget was passed by the Ohio General Assembly and signed into law by Governor Kasich, it included this expanded tax benefit for CollegeAdvantage current and future account owners residing in Ohio.

Keep in mind that as with the old deduction amount, the $4,000 deduction limit is not a contribution cap. For Ohioans who contribute over $4,000 per account, per year, they can carry forward this deduction to their Ohio adjusted gross income for subsequent tax years until all of their contributions are fully deducted.

To further explain the unlimited carry forward of the state income tax deduction, let’s use two examples. An Ohio taxpayer contributes $4,000 to two 529 accounts for each of her two children, for a total of $8,000. She could deduct a total of $8,000 from her Ohio taxable income for the year. Or, if an Ohio taxpayer contributed $8,000 to a CollegeAdvantage Direct Plan Account for one child in one year, he could deduct $4,000 from his Ohio taxable income during the current year, and also the next year.

If you have questions on this matter...or any other tax matter, please feel free to reach out to us.


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