How to Claim the 529 Tax Credit in Indiana

Residents in Indiana can reduce their state income taxes by contributing to a "CollegeChoice" Indiana 529 plan. These plans are educational savings plans known as "qualified tuition plans." Account holders contribute to 529 plans, and their investments can grow in tax-deferred accounts. If their beneficiaries use their proceeds for qualified educational expenses, their withdrawals are not subject to federal income taxes. Although most states provide tax deductions to their residents, Indiana provides its residents with a 529 tax credit equal to 20 percent of their actual contributions -- up to $1,000 annually. Only contributions into CollegeChoice plans qualify for the credit.

Download IT-40, Indiana Income Tax Form (see Resources).

Complete your annual IT-40 tax return and complete lines 1 through 8.

Download Schedule IN-529 (see Resources). You can type directly into the form.

Enter your name and Social Security number in the first two boxes.

Enter your 529 account number in column B. You may locate your account number on your trust accounts statements.

Enter your total contributions in Column C for each account that you own. You can claim a tax credit for more than one account, but your total annual credit may not exceed $1,000.

Multiply each line in column C by 20 percent (.20).

Enter your total from Step 7 in column D.

Enter your total from Column D into Line 9.

Enter the total from Line 9 or Line 10 in Line 11, whichever is smaller.

Enter your total from IT-40, Line 8 into Line 12.

Attach your Schedule IN-529 to your IT-40 form.


  • If you are not an Indiana resident, but you earned income in Indiana, you may be able to claim the credit if you have an Indiana 529 plan.


  • As of 2010, residents who rollover 529 plans from other states into Indiana 529 plans are not eligible to claim the tax credit.