Does Arizona offer a 529 plan tax deduction?

Yes. Arizona lets you subtract 529 plan contributions from your state taxable income, up to $2,000 per year if single and $4,000 per year if married filing jointly. The deduction is available even if you contribute to another state's 529 plan, not just Arizona's.

How much can I deduct for a 529 plan in Arizona?

The Arizona 529 deduction cap is $2,000 for single filers and $4,000 for married couples filing jointly, per year. Contributions above the cap are not deductible that year, but you can spread larger contributions across multiple years to use the cap each year.

How much tax does the Arizona 529 deduction actually save?

Arizona uses a flat 2.5% income tax, so the savings equal 2.5% of your deductible contribution. A married couple contributing the full $4,000 saves about $100 in Arizona income tax; a single filer maxing $2,000 saves about $50.

Can I deduct contributions to an out-of-state 529 plan in Arizona?

Yes. Arizona is one of the states that allows the deduction for contributions to any state's qualified 529 plan, not only the Arizona AZ529 plan. The same $2,000 single / $4,000 joint caps apply regardless of which plan you use.

Does Arizona allow a carryforward of excess 529 contributions?

Arizona does not provide a carryforward of contributions above the annual cap. Amounts over $2,000 single or $4,000 joint in a given year simply receive no deduction. To maximize the benefit, contribute up to the cap each tax year rather than a large lump sum.

Arizona 529 Plan Tax Benefit Calculator

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The Arizona 529 Plan Tax Benefit Calculator estimates the state income tax you save by contributing to a 529 college savings plan. Arizona offers a deduction of up to $2,000 (single) or $4,000 (married filing jointly) per year, and taxes income at a flat 2.5%, so your savings equal 2.5% of the deductible amount. The deduction applies to any state’s 529 plan.

How it works

The deduction is capped, then the flat rate gives the savings:

cap = $2,000 (single) or $4,000 (married filing jointly)
deductible = min(contribution, cap)
tax savings = deductible x 2.5%

Any contribution above the cap is not deductible that year, and Arizona does not carry the excess forward. Because the rate is flat, the savings do not depend on your income bracket.

Example and notes

A married couple contributing $5,000 to a 529 plan:

cap (MFJ):    $4,000
deductible:   min(5,000, 4,000) = $4,000
savings:      4,000 x 2.5% = $100.00

A single filer contributing $1,500: min(1,500, 2,000) = $1,500, savings 1,500 x 2.5% = $37.50.

The deduction works for contributions to any state’s qualified 529 plan.
Excess over the cap is lost for the year — there is no Arizona carryforward.
This shows the state income tax benefit only; 529 earnings also grow tax-free. Runs in your browser.