Hello,
I am an AR resident and contribute to a Non-AR 529 for my children through American Funds by Capital Group. The program is called CollegeAmerica and sponsored by Virginia529. We do not currently contribute to any other 529 plans.
I am trying to find out if our contributions count towards the "Non-Arkansas Tuition Savings Program" which says: Contributions up to $3,000 per Arkansas taxpayer ($6,000 for married couples making a proper election) to a tax-deferred tuition savings program established by another state are deductible per year; provided that the taxpayer has not deducted the contribution on another state's income tax return.
Any help is greatly appreciated.
Yes, this non-Arkansas 529 contribution is deductible. Arkansas is one of only a handful of states that allow tax parity on 529s sponsored by other states. Meaning, you as an Arkansas resident may deduct your 529 contributions made to any state, instead of the general state rule, which is the deduction is valid only in the state that sponsors the 529 plan you contributed to.
The $6,000 limit for married couples is less than the limit of $10,000 for an Arkansas plan.
Here is some more information on 529 plans you may find helpful: 529 Plans and Taxes: Deductions, Tax-Free Withdrawals & More