Arizona 529 Plan And College Savings Options
Arizona's 529 plan is AZ529, and for most Arizona families the Fidelity-managed direct plan with its index portfolios is the right account. The state deduction works with any state's 529 plan, so the real decision is fees and investments, and AZ529's index portfolios are among the cheapest options available. Watch two Arizona-specific rules: the deduction is capped per beneficiary rather than per contributor, and a non-qualified withdrawal adds your past deductions back to Arizona income. If you're new to these accounts, start with how 529 plans work.
Arizona 529 Plans At A Glance
| Plan | Type | Annual Cost | Who It's For | Status |
|---|---|---|---|---|
| AZ529, Arizona's Education Savings Plan (Fidelity) | Direct-sold savings plan | Plan fee of 0.07% on index portfolios, 0.10% on Blend, and 0.15% on actively managed portfolios, plus fund expenses; no account fee | Families who open and manage the account themselves | Open |
| Goldman Sachs 529 Plan | Advisor-sold savings plan | 0.51%–0.97% (Class I), 0.70%–1.43% (Class A, plus up to a 2.50% sales charge), 1.32%–2.18% (Class C) | Families who want a financial advisor to pick investments | Open |
| College Savings Bank legacy accounts | Bank CD option | Moved to AZ529 investment options in 2025 | Former College Savings Bank account holders | Closed |
Arizona 529 Tax Deduction And Tax Rules
Arizona lets taxpayers subtract up to $2,000 per beneficiary in 529 contributions each year, or $4,000 per beneficiary for married couples filing jointly, and the contributions can go to any state's 529 plan (ARS 43-1022). The subtraction goes to the person who made the contribution, so a grandparent who files an Arizona return can claim it, and married couples filing separately can split the $4,000 (Arizona Department of Revenue). The amounts are set in statute and aren't indexed, and our state-by-state 529 tax deduction table shows how they compare.
Contributions must be made by December 31 to count for that tax year (AZ529), and money rolled over from one 529 plan to another doesn't qualify for the subtraction (Arizona Department of Revenue). Growth is tax-deferred and qualified withdrawals are free of Arizona and federal income tax, which our list of qualified 529 plan expenses breaks down.
| Situation | Arizona Tax Treatment |
|---|---|
| Contribution to AZ529 | Deductible up to $2,000 per beneficiary, $4,000 per beneficiary for joint filers |
| Contribution to another state's 529 plan | Deductible under the same limits; Arizona has tax parity |
| Qualified college withdrawal (any accredited school, in or out of state) | Tax-free |
| K-12 tuition and expenses | Qualified up to $20,000 under Arizona's 2026 law (HB 2477), matching the federal limit |
| Student loan repayment | Qualified up to $10,000 lifetime per borrower |
| Registered apprenticeship costs | Qualified under Arizona's statute |
| Non-qualified withdrawal | Withdrawal added back to Arizona income, capped at the amount previously deducted |
| Contribute and withdraw right away (529 churning) | Allowed; no holding period, so the deduction applies even if the money pays a qualified expense soon after |
| Rollover from an Arizona plan to another state's plan | No add-back; a rollover isn't a non-qualified withdrawal under Arizona law |
| Rollover from another state's plan into AZ529 | No Arizona tax on the transfer, but the rolled-over amount isn't deductible |
| 529-to-Roth IRA rollover | Authorized under Arizona's 2026 law; AZ529 describes it as tax-free, and the Revenue Department hasn't issued separate guidance |
Arizona doesn't require money to stay in a 529 for any set period before you withdraw it. The statute allows the subtraction for contributions made during the year and adds income back only for non-qualified withdrawals, capped at the amount deducted in prior years, with no holding language in either section (ARS 43-1021). That means Arizona families paying tuition out of pocket can route up to $2,000 per beneficiary ($4,000 joint) through a 529 first and still claim the subtraction, a move states like Wisconsin and Montana have blocked, as our breakdown of 529 plan churning and withdrawal limits explains.
Arizona's 2026 law, signed June 22, 2026, added Roth IRA transfers to the AZ529 statute with the federal conditions: an account open at least 15 years, money contributed at least five years earlier, and a $35,000 lifetime cap (Laws 2026, Chapter 252). AZ529 describes these transfers as free of tax and penalty (AZ529), and our 529-to-Roth IRA rollover rules cover the annual limit that caps each transfer.
Before that law, Arizona's statute capped K-12 tuition withdrawals at less than $10,000, so the 2026 change brings the state in line with the federal $20,000 limit (Laws 2026, Chapter 252). The statute doesn't mention the new federal category for postsecondary credential programs, so confirm with the Arizona Department of Revenue before using a withdrawal that way. Our breakdown of the 2026 529 plan expansion covers what changed federally.
How Arizona's 529 Plan Ranks
Arizona ranks 28th of the 50 state plans in our best 529 plans rankings, which include Washington, D.C., with a 62.3% net return on investment. Our Net ROI score models $100 a month for 10 years at a 5% annual return, subtracts plan fees, and reinvests the value of the state tax break each year. AZ529's 0.07% fee is among the lowest in the country, but its 2.5% tax break is smaller than most deduction states, which keeps it in the middle.
| State | Fees (Basis Points) | State Tax Break | Net ROI |
|---|---|---|---|
| Indiana (#1 overall) | 12.5 | 20% | 87.8% |
| New Mexico | 10 | 5.9% | 67.0% |
| Utah | 9 | 5% | 65.8% |
| Arizona (#28) | 7 | 2.5% | 62.3% |
| California | 5 | 0% | 58.8% |
| Nevada | 11 | 0% | 57.9% |
Don't read this table as a reason to pick a plan from another state on its score alone. Each state's score assumes a taxpayer in that state using its own plan, and while Arizona residents do get the deduction with any state's 529 plan, they can't take Utah's or New Mexico's tax break, so those plans offer them only their fees. The full rankings table lists all 50 state plans, and on fees alone AZ529's index portfolios are hard to beat.
The gap with the top of the list comes down to the size of the tax break, since Arizona's fees are already low. Indiana's 20% tax credit is what puts it at #1, and Arizona's per-beneficiary cap of $2,000 ($4,000 joint) is fixed in statute with no inflation adjustment, so a larger deduction would move Arizona families up. If that matters to you, share these numbers with your state legislators, and use our 529 plan tax deductions by state table to show how other states reward savers.
Should Arizona Residents Use AZ529?
Yes, for most Arizona families, though Arizona's tax parity means you won't lose the deduction if you choose another state's plan. AZ529's Fidelity Index portfolios carry a 0.07% plan fee plus fund expenses and no account fee (AZ529 Fact Kit Supplement), so there's little reason to leave. Our 529 plan tax deductions by state table shows which other states offer parity.
Families who already hold another state's plan can keep it and still deduct new contributions, or roll it into AZ529, and our explainer on 529 plan rollovers and transfers covers the once-per-year federal limit. A rollover itself doesn't earn a new Arizona subtraction, so check the old state's recapture rules before you move money, as our breakdown of where to open a 529 plan in your own state explains.
Four years at an in-state Arizona public university runs about $112,000 on campus, so the average AZ529 balance of about $23,300 covers less than one year. Our Arizona college costs and financial aid breakdown lists costs by school, and our 529 savings benchmarks by age show what to aim for.
Arizona 529 Plan Details
Both Arizona plans are administered by the Office of the Arizona State Treasurer, with Fidelity running the direct plan and Goldman Sachs Asset Management the advisor plan (AZ529). As of June 30, 2026, Arizona's plans held $3.19 billion across 130,630 open accounts and ranked 32nd among the states in 529 assets (The 529 Network). Our 529 plan and college savings statistics show how that compares nationally.
| Arizona Plan (June 30, 2026) | Open Accounts | Assets | Average Balance |
|---|---|---|---|
| AZ529, Arizona's Education Savings Plan (direct) | 101,043 | $2.36 billion | $23,346 |
| Goldman Sachs 529 Plan (advisor) | 29,587 | $834.3 million | $28,198 |
| All Arizona 529 plans | 130,630 | $3.19 billion | $24,445 |
AZ529, Arizona's Education Savings Plan (Direct-Sold)
This is the plan to open if you're managing the account yourself. The plan fee is 0.07% on the Fidelity Index portfolios, 0.10% on the Fidelity Blend portfolios, and 0.15% on the actively managed Fidelity Funds portfolios, plus underlying fund expenses, with no account fee and no minimum (AZ529 Fact Kit Supplement, September 15, 2026). Families who held College Savings Bank CDs were moved into AZ529 investment options on August 31, 2025 (AZ529), and our 529 plan overview explains how the portfolio types differ.
| Program manager | Fidelity Investments |
| Minimum contribution | None |
| Maximum account balance | $609,000 per beneficiary for the October 1, 2026 through September 30, 2027 account year |
| Plan fee | 0.07% (index portfolios); 0.10% (Blend); 0.15% (actively managed); 0.05%–0.10% (bank deposit option); plus underlying fund expenses |
| Investment options | Age-based portfolios in three series (Fidelity Funds, Fidelity Blend, and Fidelity Index), static portfolios, and individual portfolios including an FDIC-insured bank deposit option and a stable value option |
| Fund families | Fidelity |
| Who can open | Anyone; no residency or income requirement |
| Official source | fidelity.com/529-plans/arizona or az529.gov |
Goldman Sachs 529 Plan
The advisor plan uses the same tax rules but costs more because it pays the financial advisor who sells it. Every share class carries a 0.25% program management fee and a 0.05% state administration fee, and Class A adds a 0.25% distribution fee and up to a 2.50% up-front sales charge (Goldman Sachs Asset Management). Families who want professional help should compare that cost against a fee-only planner, and our list of the best brokers to open a 529 plan shows the self-directed options.
| Program manager | Goldman Sachs Asset Management, with Ascensus handling recordkeeping |
| All-in annual cost | 0.51%–0.97% (Class I); 0.70%–1.43% (Class A); 1.32%–2.18% (Class C) |
| Sales charges | Class A carries up to a 2.50% up-front charge; Class C has a 1.00% annual distribution fee and a 1.00% charge on withdrawals within one year, and converts to Class A after 42 months |
| Account fee | $20 a year, waived for Arizona residents, balances of $25,000 or more, or recurring contributions of at least $50 a month |
| Investment options | 30 portfolios (11 year-of-enrollment, 5 target risk, 14 individual) |
| Official source | Goldman Sachs 529 Plan |
Other Arizona College Savings Programs
Upromise. Upromise lets you earn money for your AZ529 account through rebates and rewards on everyday spending, and the Upromise credit card sends cash back straight into your child's 529 plan (Upromise). You can link an AZ529 account to your Upromise profile, so the rewards stack on top of Arizona's state tax deduction.
AZ ABLE. Arizona residents with disabilities can save in AZ ABLE, a 529A account for Arizona residents that opens with $25 (ABLE National Resource Center). ABLE balances up to $100,000 don't count against SSI's resource limit (Social Security Administration), which our 529 plan overview compares with regular college savings.
Leftover money. Families with money left after college can change the beneficiary to a sibling, pay down up to $10,000 of student loans, or roll to a Roth IRA under the conditions in Arizona's 2026 law. Our list of what to do with leftover 529 money covers each option, and Arizona graduates in teaching or health care should also check Arizona student loan forgiveness programs.
Frequently Asked Questions
What Is The Arizona 529 Plan Called?
Arizona's 529 plan is AZ529, Arizona's Education Savings Plan, sold directly through Fidelity, with an advisor-sold version offered as the Goldman Sachs 529 Plan. Our 529 plans by state hub lists every state's plans.
Is The Arizona 529 Plan Tax Deductible?
Yes. Arizona taxpayers can subtract up to $2,000 per beneficiary, or $4,000 per beneficiary on a joint return, for contributions to AZ529 or any other state's 529 plan (ARS 43-1022). Our state 529 tax deduction table shows how that compares state by state.
Can Grandparents Get The Arizona 529 Deduction?
Yes, if they file an Arizona return and contribute to a 529 account. The subtraction applies to contributions the taxpayer made during the year, not only the account owner's (Arizona Department of Revenue), and our breakdown of how 529 plans work covers who can own and fund an account.
Can I Use An Arizona 529 Plan At An Out-Of-State College?
Yes. Withdrawals for qualified expenses at an out-of-state college are free of Arizona income tax (AZ529). The list of qualified 529 plan expenses is the same no matter where the school is.
Can I Contribute To An Arizona 529 Plan And Withdraw Right Away?
Yes. Arizona has no holding period, so you can deduct a 529 contribution and use it for a qualified expense shortly after (ARS 43-1022). Match the withdrawal to an expense paid in the same calendar year, and see which states restrict this in our 529 plan churning breakdown.
What Happens If I Withdraw Arizona 529 Money For Non-Qualified Expenses?
Arizona adds the withdrawal back to your income, up to the amount you deducted in prior years (ARS 43-1021). The earnings also face federal income tax and the 10% federal penalty, which our explainer on the 529 plan penalty shows how to avoid.
Can I Use My Arizona 529 Plan For Private K-12 School?
Yes. Arizona's 2026 law raised the state limit for K-12 withdrawals to $20,000, matching the federal limit that starts in 2026 (Laws 2026, Chapter 252). Our walkthrough on using a 529 plan for private school covers the paperwork.
Related Arizona Resources
How We Sourced This Data
Plan details on this page come from the plans and the state: AZ529's website and FAQ, the AZ529 Fact Kit and its September 15, 2026 supplement, the Goldman Sachs 529 Plan fees and expenses summary (January 2026) and Plan Description with its July 1, 2026 supplement, and The 529 Network 529 plan data as of June 30, 2026. Tax rules come from Arizona Revised Statutes 43-1021, 43-1022, and 15-1871, Laws 2026, Chapter 252 (HB 2477), and the Arizona Department of Revenue's 2025 Form 140 instructions. ABLE details come from the ABLE National Resource Center and the Social Security Administration, and the college cost figure comes from our Arizona financial aid page. Read more about how we fact-check and update content.
Page refreshed annually in September, after AZ529 publishes its updated fee schedule, and reviewed in January for tax season. Last full refresh: September 24, 2026.
Editor: Clint Proctor Reviewed by: Mark Kantrowitz