If you contribute to a my529 Utah Education Savings Plan, you may qualify for a Utah state income tax credit. The credit is based on your contributions and is subject to annual limits.
If you take money out of a my529 account and do not use it for qualified education expenses, you may need to report the withdrawal on your Utah return. Nonqualified withdrawals can result in additional federal and state tax consequences.
What Is the Utah my529 Plan?
my529 is Utah's official 529 education savings plan. It helps families save for future education costs while offering valuable federal and state tax benefits. Funds can be used for eligible college, university, vocational, and other qualified education expenses.
One of the biggest advantages is that earnings grow tax-deferred, and qualified withdrawals are generally federal income tax-free.
What Expenses Qualify?
Qualified education expenses generally include:
- Tuition and mandatory fees.
- Books, supplies, and equipment required for enrollment or attendance.
- Computers, peripheral equipment, educational software, internet access, and related services used for educational purposes.
- Room and board expenses, subject to IRS limits and requirements.
If you're not sure whether an expense qualifies, consider consulting a tax professional before taking a withdrawal.
What Are the Utah Tax Credit Limits for 2025?
For tax year 2025, Utah taxpayers may claim a state income tax credit based on contributions made to a my529 account for an eligible beneficiary.
| Filing Status | Maximum Contribution Eligible for Credit | Maximum Utah Tax Credit (4.45%) |
|---|---|---|
| Single | $2,560 | $113.92 |
| Married Filing Jointly | $5,120 | $227.84 |
| Trust | $2,560 | $113.92 |
| Grantor Trust (MFJ) | $5,120 | $227.84 |
| Flow-Through Entity | $2,560 | $113.92 |
To qualify for the credit, the beneficiary must have been designated on the account before reaching age 19. Once eligible, the account owner may claim the credit in any year contributions are made.
Maximum Account Balance
The my529 program currently allows contributions until an account reaches the program's maximum account balance limit. Check my529's website for the most current account balance limit before making large contributions.
Gift Tax Benefits
A special 529 plan rule allows large contributions to be treated as though they were spread over five years for federal gift tax purposes.
For 2026:
- Individuals may contribute up to $95,000 in a single year.
- Married couples filing jointly may contribute up to $190,000 in a single year.
To use this election, you'll generally need to file IRS Form 709. Our software does not support the filing of Form 709 returns.
Can I Roll Over Funds From Another 529 Plan?
Yes. Funds may generally be rolled over between qualified 529 plans. Federal rules limit tax-free rollovers for the same beneficiary to once every 12 months.
What Happens If I Don't Use the Money for Education?
If a withdrawal is not used for qualified education expenses:
- The earnings portion is subject to federal income tax.
- The earnings portion is generally subject to a 10% federal penalty.
- Utah residents must pay Utah income tax on the earnings portion.
- Utah residents must add back the nonqualified withdrawal on their Utah income tax return.
Where Do I Enter the Utah my529 Credit?
To enter your Utah my529 credit in the program:
- Go to State.
- Select Credits.
- Begin Apportionable Nonrefundable Credits.
- Choose my529 Credit from the drop-down menu.
- Enter your eligible credit amount.
Can I Deposit My Utah Refund Into a my529 Account?
Yes. Utah allows taxpayers to direct all or part of their state income tax refund into a my529 account.
To make this election:
- Go to State.
- Select Payments.
- Enter the amount of your Utah refund you want deposited into your my529 account.
Additional Information
For more information about Utah's education savings plan, visit the official my529 website.