Can A Grandparent Contribute To A 529 Plan And Claim A Tax Deduction?

Is it possible for a grandparent to make contributions to a 529 plan in Ohio and subsequently claim a tax deduction? Yes, taxpayers in Ohio have the opportunity to deduct their contributions to an Ohio 529 plan, specifically the CollegeAdvantage savings plan, from their taxable income. This deduction, which is available for each beneficiary, allows for a maximum deduction of $4,000 per beneficiary per year. It’s important to note that this deduction isn’t restricted solely to the owner or beneficiary of the savings plan. Any taxpayer who makes contributions to the 529 plan can claim this deduction on their Ohio state income tax return. As of May 10, 2022, this tax benefit remains in effect. So, if you’re a grandparent interested in contributing to a 529 plan for your grandchild’s education in Ohio, you can enjoy potential tax benefits through this deduction.

Are Ohio 529 contributions tax deductible? Yes, Ohio residents can benefit from tax deductions when contributing to Ohio’s 529 Plan, regardless of whether they are the account owner or not. This tax deduction allows Ohio residents to reduce their taxable state income. Each year, individuals can deduct up to $4,000 per beneficiary, and the best part is that this deduction comes with an unlimited carry-forward provision. Remarkably, Ohio is one of just three states in the United States offering this unique advantage through its 529 Direct Plan. This information is current as of January 30, 2023.

“What is the allowable deduction for 529 plan contributions in Ohio? Ohio residents, whether they are the account owner or a gift giver, can deduct their contributions made to Ohio’s 529 Plan from their taxable state income. The deduction limit is $4,000 per year, per beneficiary, and it’s important to note that this limit is not a cap. This means that individuals can continue to deduct contributions beyond $4,000 in subsequent years, allowing for unlimited carry forward of deductions. As of March 17, 2023, this tax benefit remains applicable.”