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Contributions to 529 plans are considered gifts under the federal gift tax regulations and hence any contributions in excess of the annual exclusion. The annual exclusion in 2024 is $18,000 if filing single (or $90,000 over five years) or $36,000 if filing married jointly (or $180,000 over a five-year period) count against the one-time gift ...
When you contribute money to a 529 plan, it’s considered a gift by the IRS. If the contribution is below a certain limit each year, you won’t have to notify the IRS of it.
The IRS does consider these contributions gifts, so any amount over the annual exclusion limit–$18,000 in 2024–is subject to federal tax. ... What Are the Downsides of a 529? Funds in the 529 ...
State. Tax Treatment of 529 Plan Contributions. California. No deduction or credit. Illinois. Maximum deduction of $10,000 ($20,000 for married joint filers) per year
The one caveat, though, would be that you could potentially owe gift taxes if you exceed $17,000 into a single child’s 529 plan in a single year, or $12.92 million over the course of their lifetime.
A 529 plan comes in two major types: (1) a college savings plan, which allows you to invest money in potentially high-return assets such as stocks, and (2) a prepaid tuition plan, which allows you ...