Happy 529 College Savings Day! Learn about Minnesota's 529 tax benefit!

Today is National 529 College Savings Day, a day to bring awareness to the options available to save for college expenses.

If you contribute to a college savings plan, you may qualify for the Education Savings Account Contribution Credit or Subtraction.

 

Education Savings Account Contribution Credit

You may qualify for the nonrefundable credit if all of the following are true:

• You are a full-year or part-year Minnesota resident.
• You contributed to any state-sponsored section 529 college savings plan.
• You meet the income guidelines for the tax year (see our Education Savings Account Credit page for details).

How much is the credit?

The credit is 50% of contributions made during the year up to a maximum of $500. The credit phases out if your Minnesota Adjusted Gross Income is over $75,000.

 

Education Savings Account Contribution Subtraction

If you contribute to a section 529 college savings plan but do not qualify for the credit, you may qualify for a subtraction from income. There are no income limits to qualify for this subtraction.

How much is the subtraction?

The subtraction equals your contributions made to a section 529 college savings plan during the year minus any distributions. The amount you may claim depends on your filing status.

If your filing status is	Then you may qualify for a subtraction up to
Single, head of household, married filing separate, or qualifying widow(er)	$1,500
Married filing jointly	$3,000

 

How do I claim the credit or subtraction?

Complete Schedule M1529, Education Savings Account Contribution Credit or Subtraction, when filing your Minnesota income tax return. You may claim either the credit or the subtraction, but not both.

For more information about the credit or subtraction:

• See our Education Savings Account Credit page
• See our Education Savings Account Subtraction page