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The Best 529 College-Savings Plans

Check out our state-by-state recommendations:

Alabama

Higher Education 529 Fund (direct-sold version)
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Alabama doesn't offer a state income-tax deduction for contributions to its own 529 plan. But Alabama residents are subject to state income tax on the earnings portion of withdrawals they make from out-of-state 529 plans, so the in-state plan has an advantage.

Alaska

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Go with one of Kiplinger's top five 529 plans.
Why? Alaska doesn't have a state personal-income tax. Because there's no tax break for contributions to an in-state 529 plan, you can choose any plan you like. The University of Alaska College Savings Plan is similar to the Maryland College Investment Plan, which we think has the best portfolio of underlying mutual funds. That Alaska plan is worth considering, though, if your beneficiaries want to attend school in-state. The University of Alaska College Savings Plan offers the ACT portfolio option, which guarantees protection from tuition inflation if the proceeds are used to attend the University of Alaska.

Arizona

Go with one of Kiplinger's top five 529 plans.
Why? Arizona doesn't offer a tax break for contributions to a 529 plan now, but it will in 2008. Next year, residents can invest in any state's 529 plan and qualify for a state income-tax deduction in Arizona. You can deduct up to $750 per individual taxpayer (up to $1,500 for joint filers) each year.

Arkansas

GIFT College Investing Plan
Why? If you contribute to the Arkansas 529 plan, you can take a state income-tax deduction of up to $5,000 per individual (up to $10,000 for joint filers) each year. The tax break trumps lower fees in an out-of-state 529.

California

Go with one of Kiplinger's top five 529 plans.
Why? California doesn't offer a state income-tax deduction for contributions to an in-state 529 plan, so pick the plan that's best for you.

Colorado

Direct Portfolio College Savings Plan
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to an in-state 529 plan can fully deduct contributions up to their adjusted gross income from their state income tax. The tax break trumps lower fees in an out-of-state 529.

Connecticut

Connecticut Higher Education Trust
Why? Residents who contribute to the Connecticut 529 plan can deduct up to $5,000 per individual (up to $10,000 for joint filers) from their state income tax. The tax break trumps lower fees in an out-of-state 529.

Delaware

Go with one of Kiplinger's top five 529 plans.
Why? Delaware doesn't offer a state income-tax deduction for contributions to an in-state 529 plan, so pick the plan that's best for you.

District of Columbia

DC 529 College Savings Program (direct-sold version)
Why? The direct-sold District of Columbia plan lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to a DC 529 plan are eligible to deduct up to $3,000 from their district income tax. Those who contribute more than that can deduct the excess in future years. The tax break trumps lower fees in an out-of-state 529.

Florida

Go with one of Kiplinger's top five 529 plans.
Why? Florida doesn't have a state personal-income tax. No tax break for contributions to an in-state 529 plan means you can choose any plan you like.

Georgia

Georgia Higher Education Savings Plan
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to a Georgia 529 plan can deduct up to $2,000 per beneficiary from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Hawaii

Go with one of Kiplinger's top five 529 plans.
Why? Hawaii doesn't offer a state income-tax deduction for contributions to an in-state 529 plan, so pick the plan that's best for you.

Idaho

Idaho College Savings Program
Why? Residents who contribute to the Idaho 529 plan can deduct up to $4,000 per beneficiary per state income-tax return each year. The tax break trumps lower fees in an out-of-state 529.

Illinois

Bright Start College Savings Program (direct-sold version)
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to an Illinois 529 plan can deduct up to $10,000 per contributor (up to $20,000 for joint filers) from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Indiana

CollegeChoice 529 Investment Plan (direct-sold version)
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to an Indiana 529 plan can claim up to $1,000 in state income-tax credits per tax return each year. (A credit is more valuable than a deduction because it reduces your taxes dollar-for-dollar.) The tax break trumps lower fees in an out-of-state 529.

Iowa

College Savings Iowa
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to an Iowa 529 plan can deduct up to $2,595 per beneficiary from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Kansas

Go with one of Kiplinger's top five 529 plans.
Why? Residents can invest in any state's 529 plan and still qualify for a state income-tax deduction in Kansas. You can deduct up to $3,000 (up to $6,000 for joint filers) per beneficiary each year.

Kentucky

Go with one of Kiplinger's top five 529 plans.
Why? Kentucky doesn't offer a state income-tax deduction for contributions to its own 529 plan, so pick the plan that's best for you.

Louisiana

START Saving Program
Why? Residents who contribute to the Louisiana 529 plan can deduct up to $2,400 per beneficiary (up to $4,800 for joint filers) from their state income tax each year. Contribute more than that and deduct the excess in future years. The tax break trumps lower fees in an out-of-state 529.

Maine

Go with one of Kiplinger's top five 529 plans.
Why? Residents can contribute to any state's 529 plan and earn a maximum state income-tax deduction of $250 in Maine. To qualify, you must have federal adjusted gross income of $100,000 or less ($200,000 or less for joint filers). So pick the plan that's best for you, regardless of which state sponsors it.

Maryland

Maryland College Investment Plan
Why? Residents who contribute to the in-state 529 plan can deduct up to $2,500 per beneficiary from their Maryland income tax each year. Those who contribute more than that can deduct the excess in future years. You can even claim a tax deduction for the amount you transfer from another state's 529 plan to a Maryland plan. The tax break trumps lower fees in an out-of-state 529.

Massachusetts

Go with one of Kiplinger's top five 529 plans.
Why? Massachusetts doesn't offer a state income-tax deduction for contributions to an in-state 529 plan, so pick the plan that's best for you.

Michigan

Michigan Education Savings Program
Why? Residents who contribute to the Michigan 529 plan can deduct up to $5,000 (up to $10,000 for joint filers) from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Minnesota

Go with one of Kiplinger's top five 529 plans.
Why? Minnesota doesn't offer a state income-tax deduction for contributions to an in-state 529 plan, so pick the plan that's best for you.

Mississippi

Mississippi Affordable College Savings Program
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to a Mississippi 529 plan can deduct up to $10,000 (up to $20,000 for joint filers) from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Missouri

MOST - Missouri's 529 College Savings Plan (direct-sold version)
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to a Missouri 529 plan can deduct up to $8,000 per tax return from your state income tax each year. The tax break trumps lower fees in an out-of-state 529.

Montana

Pacific Life Funds 529 College Savings Plan (direct-sold version)
Why? This plan sold directly through the state lets you avoid sales charges that come with 529s that are sold through brokers. That means more of your money will go toward building your college kitty. Plus, residents who contribute to a Montana 529 plan can deduct up to $3,000 (up to $6,000 for joint filers) from their state income tax each year. The tax break trumps lower fees in an out-of-state 529.

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