Is it necessary to claim a dependent on your return to contribute to a 529 plan (and take the deduction on the state return)? The situation is a divorced filer who had a child living with her in the state of IL.
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.