By: South Carolina State Treasurer Curtis Loftis, Administrator of Future Scholar College Savings Plan

December 19, 2023

There’s no escaping the hustle and bustle of December. Even if you love gift shopping, Christmas music, and holiday parties, the end of the year is often nothing short of exhausting.

While I know the most wonderful time of the year is probably also your busiest, I’d like to recommend you add a simple activity that could help boost your savings and lower your taxes.

Review your 529 savings.

Start by reviewing the amount of savings in your account. Are you on target to meet your savings goals? Next, review the contributions you have made to your 529 account this year. Have you contributed all your budget allows?

By contributing as much as possible as early as possible, your college savings have the chance to grow over time, and your earnings will have the ability to be compounded for as long as possible. If your budget allows, consider an additional contribution that could not only boost your college savings, but may also help you reap the benefits of state tax incentives.

Be sure to keep the following in mind when considering an end-of-the-year (or anytime) contribution:

  1. Know what you can save on your state income taxes.

Of the 41 states that require state income tax, 37 along with the District of Columbia provide tax incentives to families who save with a 529 plan. These states allow families to receive an income deduction or a tax credit, for contributions to a 529 plan account. For example, my state of South Carolina allows residents to deduct 100% of their 529 contributions to Future Scholar, South Carolina’s 529 plan. Nine of the 37 states that offer tax incentives also provide tax parity, allowing contributors to take a state income tax deduction on contributions made to any state’s plan they choose. It’s important to review your plan to see if you can save on state income tax.

2. Know the deadlines for receiving income tax benefits.

You can contribute to your 529 account at any time. However, each state sets a deadline for making contributions that qualify for tax savings for the current year.Most states have a deadline of December 31, 2023, to claim contributions on your 2023 state income tax returns. A few states allow contributions to be made until April of 2024. Consult your plan to find out your deadline for making contributions you can claim on this year’s returns.

3. Consider front-loading your account.

If you are financially able, you may want to consider frontloading your 529 college savings plan. Front-loading allows a larger amount of money to be given at one time so the funds have the ability to compound for longer than they would if making regular annual contributions.

The IRS has a special gifting provision for front-loading 529 accounts that allows you to exceed the $17,000 annual gift tax limit for an individual (or $34,000 for spouses). When you front-load, you contribute a one-time gift of the amount usually allowed over five years – without the gift tax consequences. That’s five years-worth of maximum contributions at one time ($17,000 x 5 = $85,000).

By front-loading, you can contribute $85,000 per child in year one, sit back, and enjoy the benefits of compounding interest on the larger amount. The contribution is tax deductible and will be treated as if you gave $17,000 per year for five years by the IRS. If you file jointly, you and your spouse are allowed to front-load up to $170,000. It’s important to remember that any gifts you make to the account beyond these amounts over the five years could be subject to federal taxes. A tax professional can help you decide if front-loading is good for your family.

Starting in 2024, the IRS has increased the gifting exclusion amount to $18,000 for an individual ($36,000 for married couples’ filings jointly and $90,000 or $180,000 for married couples filing jointly for the five year gifting limit).

4. Decide to use your tax refund for what’s important.

Are you expecting a tax refund check in 2024? Consider using it to invest in your child’s future education. Earmark it now for a lump sum contribution to boost the college savings in your 529 account. That way you won’t be tempted to spend it on something less meaningful.

5. Appreciate the tax-free benefits of saving for college with a 529 plan.

Enjoy these last days of 2023 and the wonderful benefit of growing your 529 savings tax-free. Before long, the time will come when you’ll be using those funds to pay for qualified education expenses like tuition, computers, meals, and housing. And when you do, I know you’ll be thrilled that the funds you watched grow tax-free will be withdrawn tax-free, too.

About the author: Curtis Loftis is the State Treasurer of South Carolina. He also serves as the administrator of South Carolina’s Future Scholar 529 College Savings Plan. Visit or for more information on ways to save through a 529 plan.