For 2015, Iowa taxpayers can deduct up to $3,163 in contributions per beneficiary account when determining their adjusted gross income for state income tax purposes.* This means that a married couple contributing to separate accounts for their two children can deduct up to $12,652 - or 4 x $3,163 - in 2015. That's an increase of $260 over last year's deduction.
*If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. The annual limit is adjusted annually for inflation.