Report 529 plan contributions on your state income tax return
If you use a 529 plan and pay state income tax, you may be eligible for an additional benefit. Currently, over 30 states including the District of Columbia offer a full or partial tax credit or deduction on 529 plan contributions. Most states only offer this benefit to residents who use their home state's plan, but residents of Arizona, Arkansas, Kansas, Minnesota, Missouri, Montana and Pennsylvania offer taxpayers a deduction when they contribute to any state's plan.