A 529 plan is a tax-advantaged way for parents to save for their children’s education expenses. The IRS doesn’t impose a contribution limit on 529 plans, unlike for other tax-advantaged accounts such as 401(k)s and Roth IRAs, though some limits do exist.

States often impose their own lifetime caps, though they’re all high and well more than what a family will likely need. Savers may also exceed the IRS gift tax exclusion, creating tax implications, though it won’t be an issue for most people.

Here’s what you need to know about 529 plan contribution limits.

What’s the contribution limit for 529 plans in 2024?

One of the many benefits of 529 plans is there is no federal limit on the amount you can contribute. But while there’s no federal cap, many states have set their own aggregate limits on the total amount you can contribute to a single beneficiary’s 529 plan. These state-imposed caps range from $235,000 to $575,000.

The IRS recommends contacting the plan’s administrator to find out the state program’s contribution limit.

States with the top 5 aggregate contribution limits

State Cap
Arizona $575,000
Wisconsin $567,500
Utah $560,000
New Hampshire $553,098
Alaska, Connecticut, Missouri, North Carolina, Vermont, Virgina, West Virginia $550,000

States with the 5 lowest aggregate contribution limits

State Cap
Georgia, Mississippi $235,000
North Dakota $269,000
Hawaii, New Jersey $305,000
Delaware, South Dakota, Tennessee $350,000
Montana $396,000

While plans are state-sponsored, in most situations you don’t have to be a state resident to invest in a 529 plan. It’s crucial for parents to check the rules of their specific state’s plan to ensure compliance with any limits that may be in place.

Gift tax exclusion

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. In 2024, you can contribute up to $18,000 per beneficiary per year before you’d need to file IRS Form 709.

Since each donor can contribute up to $18,000 per beneficiary, a married couple can contribute up to $36,000 in a single year per child without needing to file Form 709. If you have two children, each parent can add $18,000 to each of their accounts and still comply with IRS rules.

Even if you exceed the limit in a year, you don’t necessarily pay taxes on it. Instead, the excess amount simply counts toward your lifetime estate tax exclusion. You’d have to give $13.61 million (as of 2024) over your lifetime to trigger taxes, so most people won’t come anywhere close to the lifetime cap, though Congress may raise or lower it.

Additionally, the IRS provides an option for “superfunding” a 529 plan, which lets you contribute up to five times the annual exclusion amount in a single year — so long as you don’t make any additional contributions to the same beneficiary over the next five years. This avoids gift tax on $90,000 in 2024 by treating it as if it was contributed over a five-year period.

Other contribution and tax considerations for 529 plans

The 529 plan has become a popular way to save for college expenses — and for good reason. It offers a host of tax-advantaged benefits.

First, contributions to the account grow tax-deferred, and withdrawals are tax-free when used for qualified education expenses such as tuition, fees, room and board, and books at qualified educational institutions. Originally designed for college expenses, 529 plans can now be used for K-12 tuition at private schools and apprenticeship programs.

Funding a 529 plan may have immediate tax benefits in some cases. Over 35 states offer tax deductions on contributions, though usually only up to a certain amount. While contributions are made with after-tax money and don’t qualify for a federal tax deduction, the potential for a tax break at the state level can be beneficial.

Almost anyone can open a 529 plan. Parents, grandparents and other relatives can establish and contribute to the account. Additionally, individuals can open a plan to fund their own educational expenses.

Each state plan has different benefits, and it can pay to look around and find the best plan for your family. You’ll want to look for low cost, solid investment returns and good benefits.

Finally, starting in 2024, families can roll unused 529 plan funds to a Roth IRA in the beneficiary’s name without triggering income taxes or penalties.This new rule, signed into law as part of 2022’s SECURE Act 2.0, offers flexibility to families in case a child decides not to go to college or unused funds remain in the account after graduation.

Key rules apply to the conversion: The 529 plan must be open for at least 15 years before it can be rolled over into a Roth IRA and there’s a $35,000 lifetime limit on rollovers.

Bottom line

A 529 college savings plan offers a flexible and tax-advantaged way for parents to save for their children’s education. While there is no federal contribution limit, you should be aware of state-specific caps and navigate potential gift tax considerations. By staying informed, you can build a solid foundation for your children’s educational future.