College is expensive, I dread the expense for the kids but I am making a game effort in the preceding years here. Been tuning up the kid’s 529Ks, so I was curious to see there is a 529 credit in the tax bill.
Max of $500 credited against, I guess, your personal income balance owed, tabulated by calculating 529 contributions against somewhat arbitrary fractional multi-pliers that are stair stepped amongst some income boundaries.
The most generous multiplier there is .50 on the dollar (max of $500) available to those with an AGI of less than $80k.
Important question: Do I get this?
Answer: maybe, I’m not sure I’ve had an AGI over $80 given standard deduction, med insurance premiums, 401k, etc., but it’s been close.
Anyway, I contribute $2500 a year into the kids 529’s. .5 of $2500, is way over that $500, I’d max out there. If I go into the next AGI bracket, $80k – $100k, the multiplier is .25. I’m going to max out there too, it’s over $500. So good, I get the credit.
Is it meaningful? Yeah, kinda. I got to think $500 is more than 10% of my typical state tax obligation. Pretty generous there, to the point that I imagine this goes away if the state runs a deficit in the next couple years.