MN Tax Deduction for 529 Plans
Minnesota taxpayers now have the option of claiming either a state tax credit or deduction for contributions to a 529 college savings plan. This change goes into effect for the 2017 tax year.
The first option is a deduction of up to $3,000 for a married couple filing jointly or $1,500 for all other filers for contributions made to a qualified 529 account.
Taxpayers may instead opt for a non-refundable tax credit of half of their contribution amount, up to a maximum of $500, subject to phase-out starting at a federal adjusted gross income of $75,000 (single filer). The credit is reduced by any withdrawals made by that taxpayer during the taxable year.
If you are contributing to a 529 plan, be sure to inform your tax preparer at year-end.