Does North Dakota offer a 529 plan tax deduction?

Yes. North Dakota allows a state income tax deduction for contributions to the College SAVE 529 plan, up to $5,000 per year for single filers and $10,000 for married couples filing jointly. The deduction applies only to North Dakota's own plan.

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

No. The North Dakota deduction applies only to contributions to the in-state College SAVE plan. Contributions to a 529 sponsored by another state do not qualify for the North Dakota deduction.

Is there a carryforward for contributions above the cap?

No. North Dakota does not allow excess contributions above the annual cap to be carried forward to future years. Amounts over $5,000 single or $10,000 joint simply do not generate a deduction.

How much will the deduction actually save me?

Your savings equal the deductible amount times your North Dakota marginal tax rate. Because North Dakota's top rate is just 2.5%, a full $10,000 joint deduction saves at most about $250 in state tax, plus the tax-free growth benefit.

Does the deduction affect my federal taxes?

No. There is no federal income tax deduction for 529 contributions. The North Dakota deduction reduces only your state taxable income. The larger federal benefit of a 529 is tax-free growth and tax-free qualified withdrawals.

North Dakota 529 Plan Tax Benefit Calculator

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North Dakota rewards saving for college through its College SAVE 529 plan with a state income tax deduction. This calculator shows how much of your contribution is deductible and what that saves you at North Dakota’s low tax rates.

How it works

The deduction is capped, then multiplied by your marginal rate:

deductible = min(contribution, cap)
cap = $5,000 (single / HoH / MFS) or $10,000 (MFJ)
tax saving = deductible × North Dakota marginal rate

North Dakota’s income tax tops out at just 2.5 percent and has a large zero-percent band, so the per-dollar deduction value is modest. The bigger payoff of a 529 is the federal benefit: investments grow tax-free and qualified withdrawals for education are not taxed.

Example

A married couple contributing 10,000 dollars deducts the full amount, because it equals the joint cap. At a 2.5 percent marginal rate that saves 250 dollars in North Dakota tax this year — on top of years of tax-free growth on the balance.

Notes

For guidance only, not tax advice. Only contributions to North Dakota’s College SAVE plan qualify, there is no carryforward of excess, and the savings depend on your marginal rate. The deduction reduces state taxable income only; the federal tax-free growth and withdrawals are the larger long-term benefit. Verify current rules at tax.nd.gov.