Updated October 4, 2026. Quick answer: Yes. Iowa’s 2025 instructions allow contributions “up to $5,800 per beneficiary on Schedule 1, line 14”. The Department of Revenue says they “may be deducted on the account holder’s Iowa income tax return”.
What Iowa allows for 529 contributions
| Item | What the documents say |
|---|---|
| Treatment | Deduction on Schedule 1, line 14 |
| Limit | $5,800 per beneficiary beginning in tax year 2025; no separate joint figure is printed |
| Plans that qualify | ISave 529 and IAdvisor 529 |
| Not-qualified withdrawals | Contributions previously deducted must be included in Iowa income when distributed, unless used for qualified expenses |
| Source | Iowa Department of Revenue, IA 1040 expanded instructions (2025) and ISave 529 deduction page |
A $10,000 contribution by a married couple
A married couple who put $10,000 into an ISave account for one child can deduct $5,800, the limit per beneficiary; the other $4,200 (computed as $10,000 minus $5,800) earns no deduction this year.
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When the deduction comes back
The Department’s page says deducted contributions “must be included as Iowa income when distributed” unless they are used for qualified education expenses.
What the documents do not say
- Whether excess contributions carry forward to a later year.
- Whether contributions to another state’s plan qualify.
What changes in 2026
No change for tax year 2026 appears in the documents read for this page.
Federal rules
A state break sits beside the federal rules for 529 plans: the statute is 26 U.S.C. 529 and the IRS explains it in Publication 970, Tax Benefits for Education.
Common mistakes
- Deducting more than $5,800 for one beneficiary; the limit is per beneficiary.
Related: how Iowa taxes retirement income, whether Iowa taxes pensions, the five questions behind any 529 state tax break, and the state-by-state table of 529 deductions.
Sources
- IA 1040 Expanded Instructions: What’s New (Instruction Year 2025): https://revenue.iowa.gov/taxes/tax-guidance/individual-income-tax/1040-expanded-instructions/whats-new
- ISave 529 Deduction: https://revenue.iowa.gov/taxes/tax-guidance/tax-credits-deductions-exemption/isave-529-deduction
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.