529 deduction: YesTax parity: No — Iowa plans only
In-state plans only
Most states that offer a 529 tax break only give it for their own in-state plan, and Iowa follows that rule: the deduction applies only to Iowa's own plans — ISave 529 and the advisor-sold IAdvisor 529 Plan. Contributions to another state's 529 get no Iowa deduction. Only nine "tax-parity" states let you deduct contributions to any state's plan, and Iowa is not among them.
The deduction
For 2026, Iowa account owners can deduct up to $6,100 of contributions per beneficiary account (up from $5,800 in 2025 — the figure adjusts annually for inflation). The limit applies per account owner per beneficiary, so married account owners each funding accounts for two children could deduct up to $24,400 between them. Amounts previously deducted are added back to Iowa income if the money later comes out in a nonqualified withdrawal. Confirm the current figure with the Iowa plan.
How it fits with the gift-tax rules
A 529 contribution is also a gift for federal purposes, so it counts toward the $19,000 annual exclusion (2026). The 5-year election ("superfunding") lets you front-load up to $95,000 per donor per child without using any lifetime exemption.
See how much you can front-load with the 529 Superfunding Calculator, and keep family contributions within the exclusion with the Gift Tax Calculator.
529 deductions & credits in other states
Tax-parity states let you deduct contributions to any state's 529 plan; the rest limit the benefit to their own plan.
Tax parity: Arizona · Arkansas · Kansas · Maine · Minnesota · Missouri · Montana · Ohio · Pennsylvania
Own-plan deduction or credit: New York · New Jersey · Connecticut · Massachusetts · Rhode Island · Vermont · Illinois · Indiana · Michigan · Wisconsin · North Dakota · Virginia · Maryland · District of Columbia · West Virginia · Georgia · South Carolina · Colorado · New Mexico · Utah · Idaho · Oregon · Oklahoma · Alabama · Mississippi · Louisiana · Nebraska
General information, not tax advice. 529 deduction rules and limits change yearly and this page may not reflect the latest figure — confirm with the Iowa plan and your CPA. Iowa limits the deduction to its in-state plans as of recent guidance.
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