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529 Plan State Tax Calculator

Footnote 1 You may be able to take advantage of a state tax deduction for contributions to your home state 529 plan. Use our 529 State Tax Deduction Calculator to find out what benefits might be available to you. You may not be eligible for such home state deductions or credits by investing in NextGen 529 through Merrill.

Footnote 2 Under a five-year gifting provision, you can make account contributions of $75,000 ($150,000 for married couples electing to split gifts) for each beneficiary in one year, as long as no additional contributions or other gifts are made during the five-year period. Contributions during 2021 between $15,000 and $75,000 ($30,000 and $150,000 for married couples electing to split gifts) made in one year can be prorated over a five-year period without subjecting you to gift tax or reducing your federal unified estate and gift tax credit. If you contribute less than the $75,000 ($150,000 for married couples electing to split gifts) maximum, additional contributions can be made without you being subject to federal gift tax, up to a prorated level of $15,000 ($30,000 for married couples electing to split gifts) per year. Gift taxation may result if a contribution exceeds the available annual gift tax exclusion amount remaining for a given beneficiary in the year of contribution. For contributions between $15,000 and $75,000 ($30,000 and $150,000 for married couples electing to split gifts) made in one year, if the account owner dies before the end of the fiveyear period, a prorated portion of the contribution may be included in their estate for estate tax purposes.

All investing is subject to risk, including the possible loss of the money you invest. Tax issues are just one consideration when choosing a 529 Plan. Before you invest in a 529 college savings plan, request the plan's official program description and read it carefully. The official program description contains more complete information, including investment objectives, risks, charges, expenses and other information. If you are not a taxpayer of the state offering the plan, consider before investing whether you or the designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds and protection against creditors that are only available for investments in such state's qualified tuition program. Section 529 plans are not guaranteed by any state or federal agency. By investing in a 529 plan outside of the state in which you pay taxes, you may lose the tax benefits offered by that state's plan. Withdrawals used for qualified expenses are federally tax free. Tax treatments at the state level may vary.

You may not be eligible for such home state deductions or credits by investing in NextGen 529 through Merrill.

This tool isn't intended to constitute, nor does it constitute, tax advice. You should consult your own tax advisor for more information on the tax implications of investing in a 529 plan based on your own particular circumstances.

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