Wisconsin College Savings Program Board

Tax Information for Wisconsin Account Owners

• 2023 Tax Deductible Amounts: $3,860 per beneficiary for single filers or married filing joint, OR $1,930 per beneficiary for married filing separate and certain divorced parents of a beneficiary.
• 2024 Tax Deductible Amounts: $4,000 per beneficiary for single filers or married filing joint, OR $2,000 per beneficiary for married filing separate and certain divorced parents of a beneficiary.

• Carry Forward: Contributions in excess of the maximum annual deduction may be carried-forward and applied in subsequent tax years. The subtraction for married filing separately or divorced parents is half the current year’s maximum annual deduction amount. Numbers are subject to an inflation adjustment and rounding each year.

• Rollovers: Rollovers from other states' 529 plans are accepted. The principal portion (or contributions portion) may qualify for reducing your Wisconsin taxable income, including carry-forward for subsequent years; the portion attributed to growth is not eligible for a tax deduction on your Wisconsin income taxes. Amounts that received a previous Wisconsin reductions are not eligible.

• 365-Day Rule: The 365-Day Rule effects the tax treatment on contributions when a withdrawal is made within a 365-day period. Two examples: (1) Pat opens an account with $2,000 in December 2022 and subtracts on their 2022 tax return. In August 2023, $1,000 is withdrawn for qualified college expenses. Since the $1,000 had not been in the account for 365 days, $1,000 is then added back as taxable income on their 2022 tax return. (2) Same situations as above, but the account was open with $1,000 in 2021, before the 2022 addition of $2,000. In this case, the withdrawal would be considered as taken from the older money outside of the 365-day window and is not reported as income on 2022 taxes. This method often follows 'first-in, first-out' accounting principles.

• Schedule CS Tax Form: Contributions and distributions (for qualified expenses and non-qualified uses) are reported on the State of Wisconsin DOR Schedule CS, and attached to Form 1, the state income tax return. The schedule and instructions are at the Wisconsin Department of Revenue website.

• Low-cost investment options: Choose from portfolios that range from conservative to more aggressive allocations to align with your time frame and investment objectives. Both passive (indexed) and actively managed portfolios are available, along with stable value choices. Institutional class investment fees make college savings more affordable.

• Flexible contribution amounts: Open an account for as little as $25, plus consider recurring contributions in an amount that fits your budget. You control the amounts and frequency of automatic deductions or lump-sum payments. You can contribute via payroll direct deposit, via ACH from your bank account, or by check.
  

• Most expenses and schools are eligible: Funds can be used at any accredited public or private university, college, technical college, community college, or professional school nationwide and many abroad, as well as toward the cost of apprenticeships registered and certified with the Secretary of Labor under the National Apprenticeship Act. Additionally, funds can be used for K-12 tuition (up to $10,000 per year, per student) and to pay back student loans ($10,000 lifetime limit). Qualified higher education expenses include tuition, certain room and board expenses, fees, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution. Computers and related technology such as internet access fees, software or printers are also qualified when used primarily by the beneficiary when enrolled at an eligible educational institution.

• No age, income, or time limits: Any adult can contribute to an account--there are no income level restrictions, or age limitations for owners or beneficiaries (minimum age of 18 for account owners). Accounts may also be used for graduate school, continuing education, or classes later in life.

• Federal and state tax advantages: Earnings in your account grow both federal and state tax-free when used for qualified higher education expenses.

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