New Jersey 529 tax deduction

529 deduction: YesTax parity: No — NJBEST only

In-state plan only

Most states that offer a 529 tax break limit it to their own in-state plan, and New Jersey is one of them. To claim the New Jersey deduction, contributions go to NJBEST, the state's own 529 plan — money put into another state's plan earns no New Jersey tax break. Nine "tax-parity" states work the other way and give the break for any state's plan; the list is below.

The deduction

New Jersey taxpayers with gross income of $200,000 or less can deduct up to $10,000 per year for contributions to an NJBEST account — a benefit that began with tax year 2022. Limits change yearly — confirm the current figure with the New Jersey 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.

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 · Connecticut · Massachusetts · Rhode Island · Vermont · Illinois · Indiana · Michigan · Wisconsin · Iowa · 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 New Jersey plan and your CPA. New Jersey limits the deduction to NJBEST as of recent guidance.