Arkansas allows a deduction for a contribution to a 529 plan; $5,000 per parent ($10,000 joint). It goes on line 2 of form AR1000ADJ (schedule of adjustments) then to line 22 of the tax form (AR1000F)
There is no
deduction for a 529 plan contribution, on the federal return. The tax benefits
come later when the money is withdrawn. Most states do have a deduction for putting
money into a 529 plan. If your state is one of them, it will come up during the
state interview. For a list see:
http://www.finaid.org/savings/state529deductions.phtml
(scroll down the page) .
As for distributions, an exclusion is allowed on the federal return for qualified expenses. So, only the taxable portion would transfer to the AR return as other income
