Virginia 529 Tax Deduction for Married Filing Jointly

Virginia offers a state income tax deduction for contributions to a Virginia 529 plan. This deduction can reduce your state income tax liability by up to $2,000 per year for married couples filing jointly.

Benefits of a Virginia 529 Plan

In addition to the state income tax deduction, there are several other benefits to investing in a Virginia 529 plan:

• Tax-free growth: Earnings on your investments grow tax-free, both while they are in the plan and when they are withdrawn for qualified education expenses.
• Flexible investment options: Virginia 529 plans offer a variety of investment options, so you can choose the level of risk that is right for you.
• Widely accepted: Virginia 529 plans are accepted at most colleges and universities nationwide.

Eligibility Requirements

To be eligible for the Virginia 529 tax deduction, you must meet the following requirements:

• You must be a Virginia resident.
• You must be the account owner or beneficiary of a Virginia 529 plan.
• You must have made a contribution to the plan during the tax year.

How to Claim the Deduction

To claim the Virginia 529 tax deduction, you must file Form 760, Virginia Individual Income Tax Return. The deduction is taken on line 20 of the form.

Amount of the Deduction

The amount of the Virginia 529 tax deduction is based on your filing status and the amount of your contribution. For married couples filing jointly, the deduction is up to $2,000 per year.

Table 1: Virginia 529 Tax Deduction Amounts

Example

Let's say that you are a married couple filing jointly and you contribute $5,000 to a Virginia 529 plan in 2023. You would be eligible to claim a state income tax deduction of $2,000. This deduction would reduce your state income tax liability by $200.

Additional Considerations**

• The Virginia 529 tax deduction is not available for contributions to other state's 529 plans.
• The deduction is phased out for high-income taxpayers.
• You can only claim the deduction for the year in which you make the contribution.

Conclusion

The Virginia 529 tax deduction is a valuable tax break for Virginia residents who are saving for higher education. By taking advantage of this deduction, you can reduce your state income tax liability and save more money for your child's education.

Frequently Asked Questions

Q: What is the maximum amount of the Virginia 529 tax deduction?
A: The maximum amount of the deduction is $2,000 per year for married couples filing jointly.

Q: Is the Virginia 529 tax deduction available for contributions to other state's 529 plans?
A: No, the deduction is only available for contributions to Virginia 529 plans.

Q: Is the deduction phased out for high-income taxpayers?
A: Yes, the deduction is phased out for taxpayers with adjusted gross incomes over $100,000.

Q: Can I claim the deduction for the year in which I withdraw the money from the plan?
A: No, you can only claim the deduction for the year in which you make the contribution.

Additional Resources

• Virginia 529 Plan Website
• Form 760, Virginia Individual Income Tax Return