Hi Ms. Savage. My wife and I want to set up 529 plans for our seven grandchildren, all of whom live in Chicago as we do. I understand the federal tax rules, both income and gift tax. My question is: Are contributions to 529 plans tax deductible in Illinois? Thank you very much.
UP to $10,000 worth of contributions ($20,000 if married and filing jointly) is deductible from your Illinois Income tax each year.
But remember, you can contribute to any state’s plan, and the money can be used for college expenses in any state. So you have a wide choice. Go to www.SavingforCollege.com to learn more and do comparisons.
I would prefer to be with a less expensive plan over the long run. I chose the Vanguard 529 plan for my grandchildren’s accounts.