Here Are the 529 Plan Contribution Limits by State

529 college savings plans are excellent ways to save for the educational expenses of loved ones (or even yourself) in a tax-advantaged way. Although 529 savings plan contributions aren't deductible on your federal income tax return, they can be deducted on state income tax returns in many cases. Plus, 529 savings plan contributions can be invested, similar to the structure of a 401(k), and any investment profits used to pay for qualified education expenses are 100% tax-free.

You can't contribute an unlimited amount of money to a 529 savings plan, but these accounts have some of the highest contribution limits of any tax-advantaged investment account type.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Since 529 plans are operated by each individual state, the contribution limits are set by the states. Here's a rundown of the current state-by-state contribution limits, and what you need to know about things like gift taxes and state tax deductions.

529 plan contribution limits by state

I won't keep you in suspense. Here are the aggregate 529 plan contribution limits for each state, listed alphabetically:

Data source: Savingforcollege.com.

If you were looking for it, the highest limit is in Arizona, with a $575,000 aggregate limit, while the lowest is $235,000, which is the limit in both Georgia and Mississippi.

It's also important to mention that these limits are per beneficiary, not per account. In other words, if you open a 529 savings plan for your child, and your parents open an account for the same child to save for college, the total contributions made must remain under the limit.

Is there an annual contribution limit?

To be perfectly clear, the limits in the previous section refer to aggregate, or lifetime, contribution limits. As a general rule, there is no annual maximum contribution limit to a 529 savings plan.

However, there are two things that are important to know:

• First, while some states let you use all 529 plan contributions as a state income tax deduction, others place limits. As an example, Pennsylvania only allows contributions up to the annual gift tax exclusion to be deducted, which is $19,000 in 2025.
• Second, while on the topic of gift taxes, contributions to a 529 plan are considered "gifts," and if they exceed the annual gift tax exclusion, they can count against your lifetime gift tax exemption. There's a special rule that allows five years' worth of 529 contributions to be made at once ($95,000 in 2025) while avoiding gift tax implications, as long as no other contributions are made in the five-year period.

In other words, there might not be an official annual contribution limit, but for practical purposes, it might not make sense to contribute more than a certain amount.

If your state's limit isn't enough, should you use another plan?

Let's say that you live in Georgia, where the aggregate limit is $235,000, but you anticipate sending your child to an expensive school with a higher four-year expected cost of attendance. Should you contribute to a different state's plan instead?

While you absolutely don't have to contribute to your own state's plan, there are a couple of things to keep in mind before you choose that route.

• First, 529 plan contributions are generally deductible on state tax returns if you live in a state that has an income tax. But in most states, you must use your own state's plan to take advantage.
• Second, not all 529 plans allow out-of-state residents to contribute.
• Third, not all 529 plans are equal. It's important to compare fees and investment options if you're thinking about using another state's plan.

The bottom line is that there is more to the decision of which 529 savings plan to use than the contribution limits. But with the rising costs of attending college, it's definitely a piece of the puzzle.

The $22,924 Social Security bonus most retirees completely overlook

If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

View the "Social Security secrets" »

The Motley Fool has a disclosure policy.