What Is the Maximum 529 Contribution Without Gift Tax?

A 529 plan is a tax-advantaged savings account for future education costs, including expenses for colleges, universities, and trade schools. Contributions to these plans are considered gifts under federal tax law and are subject to specific limits. However, the tax code provides allowances that permit generous contributions without triggering the gift tax.

The Annual Gift Tax Exclusion for 529 Plans

Federal law provides an annual gift tax exclusion, which is the amount an individual can give to another person each year without paying gift tax or filing a return. For 2024, this amount is $18,000, and for 2025, it increases to $19,000. This rule applies directly to 529 plan contributions, allowing a donor to deposit up to this annual limit into a beneficiary’s account each year with no federal gift tax implications.

The exclusion applies on a per-beneficiary basis, meaning a person can contribute the maximum annual amount to separate 529 plans for multiple individuals in the same year. The limit is also per-donor, which allows a married couple to combine their individual exclusions to contribute double the annual amount to a single beneficiary.

For example, using the 2025 limit of $19,000, a married couple could contribute up to $38,000 to one child’s 529 plan in a single year. As long as the contribution from each spouse to that beneficiary does not exceed the annual exclusion, no gift tax return is required.

Using the Special 5-Year Contribution Rule

A provision in the tax code allows for a larger, one-time contribution to a 529 plan. This rule, often called “superfunding,” permits a contributor to make a lump-sum payment of five years’ worth of the annual gift tax exclusion at once. The contribution is treated for tax purposes as if it were made evenly over a five-year period to take advantage of long-term, tax-deferred growth.

To calculate the maximum superfunded amount, you multiply the current year’s annual exclusion by five. Using the 2025 exclusion of $19,000, an individual can contribute up to $95,000 to a beneficiary’s 529 plan in a single year. A married couple can combine their limits and contribute up to $190,000 at one time.

When making this election, the contributor cannot make additional gifts to that same beneficiary during the five-year period without using their lifetime gift tax exemption. For instance, if an individual contributes $95,000 in 2025, they have used their $19,000 annual exclusion for that beneficiary for 2025 through 2029.

If the contributor passes away within the five-year window, a portion of the contribution is brought back into their taxable estate. The amount recaptured is the prorated portion for the years remaining in the five-year period. For example, if a donor makes a $95,000 contribution and dies in year three, the contributions for years four and five ($38,000) would be included in their taxable estate.

How to Report a Superfunded Contribution

When a contributor uses the five-year rule, they must notify the IRS by filing Form 709, the United States Gift Tax Return, for the year the contribution is made. This form is required even if no gift tax is due.

On Form 709, the contributor must report the entire lump-sum amount and check a specific box to indicate they are treating the gift as made over a five-year period. This action allocates one-fifth of the gift to the current tax year, applying that year’s annual exclusion.

The remaining four-fifths are treated as gifts in the subsequent four years. This process ensures the IRS understands why a gift exceeding the annual exclusion does not immediately trigger tax or use the lifetime exemption.