I work in NY, reside in NJ, and contribute the maximum $10,000 deductible amount to a NYS 529 plan. My NYS tax bracket is 6.85%. After entering the 529 contributions in TurboTax my tax due to NYS decreased by only ~$50. That's 10x less than what I'd expect. I'm trying to understand why this is the case. Maybe I'm not doing it right in TurboTax? Is there some limitation with deducting 529 contributions when you live in another state? Would I be better off having a NJ 529?
