529 college savings plans do not have annual contribution limits, but they are subject to the annual gift tax exclusion of $15,000 per donor (for 2020 and 2021).
You are correct that you and your wife can contribute $30,000 combined to a 529 plan without having to file a federal
gift tax return.
Many states give tax deductions for 529 contributions. Check with your plan and your state for details.
Special rule for 529 plan contributions
Contributions to a 529 college savings plan are gifts to the future student. However, a special rule allows you to make a lump-sum contribution and spread it over five years for gift tax purposes.
For example, you can contribute $75,000 in 2020 to jump-start a 529 college savings account for your child. If you’re married, your spouse can do the same.
- You can spread the gift over 2020-2023 without incurring any gift tax and without reducing your $11.58 million lifetime gift tax exemption or your $11.58 million estate tax exemption.
- Your spouse can spread his or her $75,000 gift over five years as well.
The only caveat: You can’t make any additional gifts to the same recipient during those years without using part of your $11.58 million exemption.
Learn more at The Gift Tax Made Simple
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