Q. Do we need to add the other kid as the beneficiary too since the gift tax is per donee.
A. Yes, but not exactly. You don't add the 2nd kid to the existing account. You open a new account for the 2nd kid. Either parent can be the new account owner. But the the 2nd kid needs to the sole beneficiary of the new account. A 529 account with more than one beneficiary is not allowed.
Q. Is my assumption correct -- by doing this we can contribute maximal $17K * 4 to the 529 account in 2023?
A. Yes. But more accurately, $17K *2 to each account.
Q. Can we do it even if we file 1040 jointly?
A. Yes.
Q. Do we need separate 529 accounts (or, change that 529 account to a joint account) to "split" the gift, or we can simply use my wife's?
A. Both parents do not need to be owners of different accounts. One parent can be the owner of both accounts. What's important is that the money comes equally FROM both parents (using money from a joint bank account meets this requirement) and goes equally to each kid/donee. That is, it doesn't matter who the owner of the 529 account is. It matters who the beneficiary is. As stated earlier, the two beneficiaries need to be in separate accounts.
