529 College Savings Plan State Tax & Growth Calculator

What This Calculator Does

This calculator projects a 529 college savings account from the child's current age to the age college starts, and sets that projection against the same contributions held in an ordinary taxable brokerage account. It also estimates the state income tax saved each year when the state allows a deduction for 529 contributions. It is for parents, grandparents and other relatives deciding how much to save each month, whether the state deduction is worth using, and how much the tax treatment of a 529 adds over a given number of years.

You enter the child's age, the college start age, a starting balance, a monthly contribution, an expected annual return, a four-year cost target and a state. The results are the projected balance and the share of the target it covers, total contributions, investment growth, the difference from the taxable account, and the annual state tax saving.

How the Math Works

Each month the contribution is added and the balance grows by the annual return divided by twelve. The 529 balance compounds at the full return, because earnings in a qualified tuition program are not taxed while they stay in the account and are not taxed on withdrawal when spent on qualified education expenses (IRS Publication 970). The taxable account compounds at the return minus 1.6 percentage points. That 1.6% is an assumption standing in for yearly tax on dividends and realized gains; the right figure depends on the fund, the household's tax bracket and how often gains are realized. The model does not charge the tax due on unrealized gains when the taxable account is eventually sold, so the gap at withdrawal is usually wider than shown.

The state saving is the smaller of the year's contributions and the state's deduction cap, multiplied by the state rate listed in the menu. The calculator applies each state's cap for married couples filing jointly; single filers in states with a lower single cap should read the table below. No federal saving on contributions is shown; the federal benefit modelled is the untaxed growth.

Worked Example

This is the Age 5 (PA) preset: a married couple in Pennsylvania with a 5-year-old, a $15,000 starting balance, $800 a month in contributions, a 7.0% expected return and a $160,000 target for age 18.

• Contributions: 13 years of $800 a month is $124,800, plus the $15,000 starting balance, for $139,800 in total.
• Projected balance: $241,013 at age 18, 151% of the target. $101,213 of it is investment growth.
• Compared with a taxable account: with the assumed 1.6% annual tax drag, the same contributions reach about $29,607 less, before any tax due when that account is sold.
• State benefit: the $9,600 of annual contributions is under Pennsylvania's $38,000 joint cap, so all of it is deductible at the 3.07% flat rate, saving $294.72 a year.

State Deduction Rules the Calculator Applies

The table lists the cap and rate behind each option in the state menu and the annual saving they produce at two contribution levels. At $500 a month every cap except Virginia's and Ohio's is above the $6,000 contributed, so the saving is simply contributions times the rate. At $1,500 a month the caps start to bind.

A single filer in New York, Pennsylvania, Illinois, Georgia or Colorado who contributes more than the single cap will see a higher saving here than the state allows; the correct figure is the single cap times the rate. Pennsylvania's caps follow the federal annual gift exclusion, which the IRS left at $19,000 for 2026, per contributor and per beneficiary. New York's and Colorado's rates are graduated or depend on the filer, so the listed rates are assumptions. Some states allow the deduction only for contributions to their own plan, while Pennsylvania allows it for any state's plan, so the state's rule is worth checking before choosing an out-of-state plan.

What the Money Can Pay For, and What Happens to Unused Funds

The projection assumes the account is spent on qualified expenses, because that is when the growth stays tax-free. The federal rules in 26 U.S.C. 529 and IRS Publication 970 set what counts and what happens otherwise.

The Roth IRA route is narrower than it is often described. Each year's rollover counts against the beneficiary's annual Roth IRA contribution limit, reduced by anything else they contribute to IRAs that year, so the $35,000 lifetime amount is reached over several years rather than at once. Money contributed in the last five years, and its earnings, is not eligible, and the 15-year clock runs from when the account was opened. For a family whose child receives a scholarship or does not attend college, changing the beneficiary to a sibling, or withdrawing the scholarship amount, which is exempt from the 10% additional tax though its earnings are still taxed, are the other main options.

For larger gifts, 26 U.S.C. 529(c)(2)(B) lets a contributor elect to treat a contribution above the annual gift exclusion as made evenly over five years. At the 2026 exclusion of $19,000, that covers up to $95,000 per contributor per beneficiary in a single year, with one fifth of it counted against the annual exclusion in each of the five years.

How the Starting Age Changes the Result

Time matters more than any other input because both the growth and the tax difference compound. The table runs the default inputs ($5,000 starting balance, $500 a month, 7.5% return, $160,000 target) with different starting ages and college at 18.

Starting at birth rather than at age 10 adds $60,000 of contributions but $172,926 of balance, and the tax difference grows from $5,539 to $40,904. For a teenager the tax-free growth is small, and the state deduction becomes most of the benefit: at age 14 in New York the five years of $390 deductions total $1,950, more than the $1,351 growth advantage. The return assumption also moves the result: at the default inputs, a 5% return gives $172,608 and a 9% return gives $264,215. Actual returns vary from year to year, and a lower return in the years just before college has the largest effect on the money available.

Frequently Asked Questions

Sources

• 26 U.S.C. 529, Qualified tuition programs (as amended by P.L. 119-21 sections 70413 and 70414)
• IRS Publication 970 (2025), Tax Benefits for Education, chapter on qualified tuition programs
• IRS, tax inflation adjustments for tax year 2026 (annual gift exclusion)
• IRS Tax Topic 313, Qualified tuition programs