529 contributions in Alabama
Varies
Are 529 Contributions Tax Deductible in Alabama?
Short answer: Yes on your Alabama return: $5,000 single / $10,000 joint (if both spouses contribute) per taxpayer. Only contributions to the state's own plan count. Nonqualified withdrawals are added back to income plus a 10% penalty; rollovers to out-of-state plans are recaptured.
There's no federal deduction for 529 contributions; growth is tax-free when used for qualified education costs.
Records to keep: Keep receipts, statements, and a note of what each cost was for. Compare itemizing to the 2026 standard deduction ($16,100 single / $32,200 joint) before you claim.
529 contributions in Alabama
Varies
Individuals / Personal Taxes
Yes on your Alabama return: $5,000 single / $10,000 joint (if both spouses contribute) per taxpayer. Only contributions to the state's own plan count. Nonqualified withdrawals are added back to income plus a 10% penalty; rollovers to out-of-state plans are recaptured.
Business justification
Yes on your Alabama return: $5,000 single / $10,000 joint (if both spouses contribute) per taxpayer. Only contributions to the state's own plan count. Nonqualified withdrawals are added back to income plus a 10% penalty; rollovers to out-of-state plans are recaptured. There's no federal deduction for 529 contributions; growth is tax-free when used for qualified education costs.
Category
- Personal Tax Deductions