My son is in 8th grade now. I want to start putting money in a 529.

I live in NC and he will almost certainly go to Uni here.

In looking at options, contribution to the NC 529 plan don't have any tax deductions but Fidelity offers a UNIQUE plan that's "based" in NH where there is no state income tax. I am confused- so if I contribute to this Fidelity plan, does it mean I would get deduction on my NC state income tax?


A number of states have a tax deduction on contributions to their own state's 529 plan.

From what I can tell North Carolina got rid of their 529 contribution deduction in 2013.

So NO, there is no deduction if you contribution to any 529 plan.

That said, you can now choose any number of state 529 plans. You can select one better than your state's plan for performance and fees. Also realize that others can contribute to your child's 529 so choosing one where say the grandparents can reap a state income tax deduction for their contribution may be worth investigating.

https://www.savingforcollege.com/ has nice tools for drilling down on various state 529 plans.


I live in NC and he will almost certainly go to Uni here.

The state they plan to go to University is only important if you are looking at a plan that allows you to buy semesters of school by paying in advance. In these types of plans the returns you are getting depend on in-state/out-of-state and public-vs-private.

In a plan that works more like an Roth IRA where you put money in post-tax and as long as you use the money for allowed educational expenses the returns are not taxed, the main reason you pick your state is if you can get a state income tax deduction. If your state doesn't offer a deduction, then you should look at all the 529 plans and pick the one that works the best for you.

Since North Carolina doesn't offer a tax deduction, you should look at other plans. Picking a plan from another state won't gain you a state tax deduction, but in your case it won't cost you one either.

You can find many sites on line that will help you decide which plan to pick.

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