Iowa allows eligible taxpayers who are participants in a qualified Iowa education savings plan to deduct contributions made during the tax year. For tax year 2025, a participant may deduct up to $5,800 per beneficiary for contributions made to a College Savings Iowa 529 Plan or an Iowa Advisor 529 Plan. Contributions to 529 plans sponsored by other states do not qualify for the Iowa deduction.
Eligibility and Limitations
Eligible Participants: The deduction is available only to a taxpayer who is a participant in a qualified Iowa 529 education savings plan and who makes eligible contributions during the tax year.
Maximum Deduction: For tax year 2025, a participant may deduct up to $5,800 per beneficiary for contributions made to a qualified Iowa 529 education savings plan. The deduction limit applies separately to each designated beneficiary.
Applicable Plans: Only contributions to the following Iowa-sponsored education savings plans qualify for the deduction:
- College Savings Iowa 529 Plan
- Iowa Advisor 529 Plan
Contributions to 529 plans sponsored by other states are not eligible for the Iowa deduction.
Claiming the Deduction: Report the deductible contribution amount on IA 1040 Schedule 1, Line 14, and complete the Iowa income tax return according to the Schedule 1 and IA 1040 instructions.
Examples
If a participant contributes to more than one qualified Iowa 529 account for the same beneficiary, the total deduction for that beneficiary cannot exceed the annual deduction limit. If spouses are participants in separate Iowa 529 accounts, each spouse may claim a deduction for eligible contributions they made, subject to the applicable per-beneficiary limitation described in the Iowa instructions.
Important Notes
- The deduction applies only to contributions made during the tax year.
- The deduction is available only for contributions to qualifying Iowa-sponsored 529 education savings plans.
- Taxpayers should retain records of contributions claimed as a deduction.
- The annual deduction amount is subject to adjustment by the Iowa Department of Revenue for future tax years.
Source:
Form IA 1040
IA 1040 Schedule 1 – Expanded Instructions
Disclaimer: Always verify details with the official Iowa Department of Revenue forms and instructions for the current tax year. Tax rules may change, and individual circumstances may require professional advice from a CPA or tax attorney.