Change to Ohio 529 plan tax deduction

Starting in 2023, Ohio residents who contribute to any 529 plan (not just the Ohio 529 plan) are allowed up to $4,000 per beneficiary per year to be deductible in computing Ohio taxable income. This change now allows  Ohio based taxpayers to receive a tax deduction for contributions made to a 529 provider in ANY state in the US.  The objective of this act is to provide the same tax benefit to all families saving for college in Ohio. Currently, only families investing in Ohio’s 529 college savings plan receive the $4,000 deduction against their taxable income. The underlying goal is to encourage all Ohio taxpayers to invest in a 529 college savings account to plan for the cost of going to college. This act extends the same tax benefit to all Ohio families paying state income taxes regardless of whether they invest in Ohio’s plan or another state’s plan that may be a better option for their family needs. This act also provides competition for Ohio’s college savings plan to ensure families investing in Ohio’s plan obtain the highest possible return on their investment at the lowest possible cost associated with the plan.