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As 2025 starts, let’s review of some of the many benefits of saving for your children's and grandchildren's college and career training in Ohio 529, CollegeAdvantage. The list includes the power of compound interest, a wide variety of investment options, tax-free earnings, and tax-free withdrawals. For Ohioans saving with Ohio 529, there’s also a deduction from their state taxable income for Ohio 529 contributions of up to $4,000 per year, per beneficiary.

State tax deduction is $4,000 for Ohio 529 contributions

For Ohio residents, you will receive an up-to $4,000 deduction of your State of Ohio income taxes for matching contributions to an Ohio 529 account, heightening the tax advantages of saving for college and career training costs in Ohio 529. Other tax benefits include tax-free earnings and tax-free withdrawals on qualified higher education expenses. And these tax savings apply in your Ohio 529 account at whatever school comes after high school for for your children and grandchildren—including four-year colleges and universities, community colleges, tech, trade or vocational schools, apprenticeships, and certificate programs. 

The $4,000 deduction limit is not a contribution cap. For Ohioans who contribute over $4,000 per account, per year, they can carry forward this deduction to their Ohio adjusted gross income for subsequent tax years until all of their contributions are fully deducted.

To illustrate the unlimited carry forward of the Ohio state income tax deduction, let’s use two examples. An Ohio taxpayer contributes $4,000 to two 529 accounts for each of her two children, for a total of $8,000. She could deduct a total of $8,000 from her Ohio taxable income for the year. Or, if an Ohio taxpayer contributed $8,000 to a CollegeAdvantage Direct Plan Account for one child in one year, he could deduct $4,000 from his Ohio taxable income during the current year, and also the next year.

Account limit for contributions increases

The Account Limit for Contributions is limit for total value of all Ohio CollegeAdvantage 529 Program accounts for a single beneficiary. Once this amount is reached, no additional contributions may be made to any account for this beneficiary in any plan within CollegeAdvantage.

As of Jan. 1, 2025, the limit will be $555,000. This limit is calculated based on the sum of the current average cost of tuition and current average cost of room and board needed for seven years at the five U. S. highest-cost eligible educational institutions. This amount is adjusted annually to take into estimated future inflation and estimated account earnings.

Annual gift tax exclusion rises

Contributions to a CollegeAdvantage Direct Plan Account are generally considered completed gifts for federal tax purposes. There are no federal gift tax consequences under a certain dollar amount. In 2025, the annual gift exclusion amount is $19,000 ($38,000 for a married individual who elects to split gifts with his or her spouse or for a gift of community property). Please consult with your tax or financial advisor first.

You may also choose to contribute up to $95,000 of the contributions ($190,000 for married couple) as having been made ratably over a five-year period without any tax consequences. If you decide to do five-year option, please consult with your tax or financial adviser first.

Use our tools and calculators to set your college savings goals, see the benefits of saving in a 529 plan when compared to a taxable savings account; and review how saving early as possible promotes growth in the account.

Since 1989, Ohio 529 has been helping families across the nation save for their children’s higher education. Ohio 529 covers qualified costs for your child’s college or career training. Start, add, or give a gift with as little as $25 at CollegeAdvantage.com.

This article was originally posted in December 2018 and has been updated to reflect new information for 2025.

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529 Short Course: New Parents

5 things every new parent needs to know about saving for education

  1. Why Ohio 529?
    529s are specifically created for higher education savings. Unlike a traditional banking account, a 529 account benefits from tax-free earnings and tax-free withdrawals. For Ohio residents, there is also a state income tax deduction for those contributions.
  2. It’s simple to start.
    You can open your 529 account online in minutes with as little as $25. With ready-made portfolio options, you don’t have to be a financial expert to feel confident in your savings plan choices.
  3. Set it and forget it with automatic deposits.
    The sooner you start saving, the longer your account benefits from the Ohio 529 tax advantages as well as compound interest. Many new parents take their 529 contributions off their to-do list by setting up small automatic deposits from either their banking accounts or paycheck. Also, with our ReadySave 529 app, it’s also easy to track and adjust your account right on your mobile device.
  4. Save for college, career training, and more.
    Ohio 529 can be used at over 30,000 schools of all kinds, nationwide, including universities; community colleges; trade, technical, and vocational schools; certificate programs; and apprenticeships. Your Ohio 529 account can also pay for K-12 tuition at a public, private, or religious school. And, if it’s not needed for educational expenses, you can now roll over your 529 to a Roth IRA.
  5. Others can help.
    It’s easy for family and friends to contribute to your child’s account and receive tax benefits for themselves. You can share your account’s unique Ugift number with others to contribute online without creating their own 529 accounts. Those who live in Ohio will also receive a state income tax deduction for their contributions. Also, you can sign up to have reminder emails sent to you and loved ones for the big milestones in your child’s life.

Hoping to find gold at the end of the rainbow? If you are saving with Ohio 529 CollegeAdvantage, you have the benefit of Ugift with your account, which is savings gold.

Ugift makes it easy for others to give to your Ohio 529 account. With Ugift, you generate a unique code which allows loved ones to contribute to your Ohio 529 savings plan without needing the actual account number. Once they have the Ugift code, your friends and family can visit Ugift529.com to make their online gifts directly to your 529.

When friends and family ask for gift ideas, share that you are saving for your child’s future education with Ohio 529. Then invite them to join in with gift contributions to your Ohio 529 account with Ugift. After all, a gift for your child’s education will truly last a lifetime.

The quickest and easiest way to pass along your child’s Ugift code is with the ReadySave 529 app, which you can access as an Ohio 529 CollegeAdvantage account owner. At the bottom of every page is an Ugift icon. Click on the gift symbol to view your Ugift code which you can send immediately as an invitation via texts, emails, and Facebook/Instagram chats from your phone.

Or log into your account online to view your child’s Ugift code to send to family and friends who would like to give the gift of education.

The Ugift code doesn’t expire. Which means whenever there is an occasion to celebrate­ like baby showers, holidays, birthdays, graduations, and special achievements, your family and friends can give to your Ohio 529 account. And they can choose to contribute as much as they want whenever they want. It can be a one-time gift or recurring gift; all they need is that Ugift code. Your loved ones’ contributions - whether big or small – will add up over the years. Added to the power of compound interest, these gifts will power your 529 savings to cover even more college and career training costs.

An added bonus for gift givers who live in Ohio: They are also eligible to receive a state income tax deduction for their Ohio 529 gift contributions, up to $4,000 per year, per beneficiary.

To learn more about all of the gifting options with Ohio 529 and order cards for special occasions, visit  529 Gift Central.

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