Edvest 529 Tax Deduction: Wisconsin Limits, Carryforward, and Recapture

Wisconsin residents who contribute to an Edvest account can claim the Edvest 529 tax deduction on their state return, subtracting up to $5,280 per beneficiary from Wisconsin taxable income for the 2026 tax year. Married couples filing separately can each deduct up to $2,640 per beneficiary. Anything you contribute above the annual cap carries forward to future years.¹

Who Qualifies and What Counts

You do not have to own the account to claim the deduction. Any Wisconsin taxpayer who puts money into an Edvest 529 can subtract the contribution on their own return, including grandparents, aunts, uncles, and family friends.² You can also open an account where you name yourself as both owner and beneficiary and still take the deduction.³

The subtraction only applies to contributions made to a Wisconsin 529 plan. Money sent to another state’s plan does not qualify, even if you file a Wisconsin return.³ Wisconsin has two qualifying plans: Edvest, the direct-sold plan, and Tomorrow’s Scholar, the advisor-sold plan. Contributions to either count.

The $5,280 cap is per contributor, per beneficiary. If you fund accounts for three grandchildren, you get a separate $5,280 limit for each one. A married couple filing jointly shares a single $5,280 limit per beneficiary rather than doubling it. But if a parent and a grandparent each put money into separate accounts for the same child, each of them can deduct up to $5,280 on their own return.³

Carrying Excess Contributions Forward

Contribute more than the annual cap and the excess does not disappear. It carries forward to future tax years and can be deducted then, subject to each year’s limit, until fully used.² Front-loading a lump sum is a workable strategy for that reason. You get the full deduction eventually; it just spreads across multiple returns.

Wisconsin applies unused carryover on a first-in, first-out basis, so the oldest excess is used up first. The carryover survives even after the beneficiary starts college and begins spending the funds. One catch: only excess contributions from 2014 forward are eligible for carryover. Anything above the cap before that year cannot be carried.³

Deadline and How to Claim It

Wisconsin gives you until the April 15 tax filing deadline to make a contribution that counts for the prior year. A deposit made in March 2027 can go on your 2026 return.³ That flexibility lets you see how your return is shaping up before deciding how much to add.

Claim the deduction on Wisconsin Schedule CS, College Savings Accounts, filed with Form 1 or Form 1NPR.⁴ List each beneficiary, contribution amounts, and any carryover from prior years. The total from line 10 of Schedule CS transfers to line 10 of Schedule SB, the subtractions-from-income schedule attached to Form 1.⁵ Most tax software walks through this automatically once you enter the contribution details.

Keep your Edvest account number, beneficiary names, contribution dates and amounts, and records of any carryover from prior years. The Department of Revenue can request verification.

When Wisconsin Takes the Deduction Back

The subtraction is not permanent. Three situations trigger an add-back, meaning previously deducted amounts get added back to your Wisconsin taxable income.

Withdrawals Within 365 Days

If you pull money out of an Edvest account within 365 days of contributing it, the amount you previously deducted gets added back, even if you spent it on a qualified expense.² Wisconsin uses first-in, first-out accounting to figure out which dollars left the account. If you contributed $1,000 in August 2025 and $2,000 in December 2025, then withdrew $1,000 in September 2026, that withdrawal is treated as coming from the August deposit, which has been in the account more than 365 days, so no add-back applies. The practical rule: contribute early and avoid withdrawing money you just deposited.

Non-Qualified Withdrawals

Withdrawals not used for qualified education expenses have to be reported on Schedule CS. Beyond the federal income tax and 10% penalty on the earnings portion, previously deducted contributions used for non-qualified purposes are added back to Wisconsin income.²

Rollovers to Another State’s Plan

Roll your Edvest balance into a 529 plan in another state and the amount you previously deducted comes back into Wisconsin taxable income.⁶ This applies to rollovers made on or after June 1, 2014. Changing the beneficiary within the same Wisconsin plan does not trigger the add-back.

What Qualifies as an Education Expense

Withdrawals used for qualified expenses are free from federal income tax; using funds for anything else triggers federal tax on the earnings plus a 10% penalty on that portion, on top of the Wisconsin add-back.

At an eligible postsecondary school, qualified expenses include tuition and mandatory fees, required books and supplies, and computers or internet access used primarily by the student. Room and board qualifies only for students enrolled at least half-time, and the amount cannot exceed the school’s official cost-of-attendance allowance.⁷ Services for students with special needs connected to enrollment also count.

Beyond college, 529 funds can go toward up to $10,000 in lifetime student loan repayments per beneficiary, including the beneficiary’s siblings. Fees and equipment for registered apprenticeship programs certified by the U.S. Department of Labor qualify as well. For K-12, up to $20,000 per student per year can be withdrawn for tuition and related costs at a private, public, or religious school in 2026.²

Leftover Funds and the Roth IRA Rollover

Since 2024, under the SECURE 2.0 Act, beneficiaries can move leftover 529 money into a Roth IRA. The rules are strict:

The 529 account must have been open at least 15 years.
The contributions (and their earnings) being rolled must have been in the account at least 5 years.
The lifetime cap per beneficiary is $35,000.
Each year’s rollover cannot exceed the Roth IRA contribution limit, which is $7,000 for 2026, or $8,000 if the beneficiary is 50 or older.
The beneficiary must have earned income at least equal to the rollover amount.
The Roth IRA has to belong to the named 529 beneficiary.

Roth IRA income limits are waived for these transfers, which helps higher-earning beneficiaries who would otherwise be phased out of direct Roth contributions. The rollover has to move directly from the 529 to the Roth IRA. Reaching $35,000 at $7,000 a year takes at least five years, so this is a long-term option, not a quick way to empty an over-funded account.⁸

Gift Tax Notes for Large Contributors

Contributions to a 529 plan count as gifts for federal purposes. The 2026 annual gift tax exclusion is $19,000 per recipient, and married couples can combine exclusions for $38,000 per recipient.⁹ Stay at or below those numbers and you have no gift tax to worry about.

529 plans also allow superfunding: up to five years of the annual exclusion in a single year, $95,000 for an individual or $190,000 for a married couple in 2026, with the gift spread evenly across five years on your federal return. You cannot make additional gifts to that same beneficiary during the five-year window without using part of your lifetime exemption, and if you die during the window the unallocated portion is added back to your taxable estate. For most Wisconsin families the state deduction cap sits far below these thresholds, so gift tax mostly matters for grandparents or others making very large lump-sum contributions.

1
Edvest 529. Wisconsin 529 Triple Tax Benefits Guide
2
Wisconsin Department of Financial Institutions. Wisconsin 529 College Savings Program
3
Department Of Revenue. College Savings Accounts
4
Wisconsin Department of Revenue. 2025 Schedule CS Wisconsin College Savings Accounts
5
Wisconsin Department of Revenue. 2025 Schedule SB, Form 1 – Subtractions From Income
6
Tomorrow’s Scholar 529 Plan. Tax Advantages
7
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
8
Wisconsin Department of Revenue. 2025 Schedule CS Instructions – College Savings Accounts
9
Internal Revenue Service. Frequently Asked Questions on Gift Taxes