How get the most deduction of 529 plan in Virginia

[MxJose]

Hi, my kid is a freshman at UVA, and we are considering opening two 529 accounts between my wife and me to maximize the Tax deduction next year. Is this realistic? My wife and I jointly declare the taxes.

Virginia allows up to $8k tax deduction for couples, so I wondered if we opened the two 529 accounts for my kid, and each one deposited $10k or more, will this help us to get the $8k deduction? 

[Bsch4477]

Yes, account owners who are Virginia taxpayers may deduct contributions up to $4,000 per account per year with an unlimited carryforward to future tax years. So any amount in excess of the $8,000 is carried forward. 

[MxJose]

Thanks

To get the max $8k deduction, do we (my wife and I) need to open a 529 account for our Kid, or just one 529 account with $8k in the balance?

Also,  my wife doesn't work; if she opens a 529 for our kid and deposits $4k, will she have a problem with the IRS? The source of money will be from my banking account.

[Bsch4477]

The deduction is per account so each of you would open an account and each contribute at least $4,000 for the maximum deduction. Doesn’t matter that she is not working. 

[Hal_Al · Accepted solution]

Q. To get the max $8k deduction, do we (my wife and I) need to open a 529 account for our Kid, or just one 529 account with $8k in the balance?

A. Open two separate accounts.

You appear to have found a loop hole in the way Virginia handles this deduction.  Every other state (that I know of) only allows a deduction "per beneficiary". But VA allows a deduction "per account".  The fact that you will have two separate owners seems to make that position stronger. 

This document appears to allow the multiple deductions https://www.tax.virginia.gov/laws-rules-decisions/rulings-tax-commissioner/10-240 .