Connecticut 529 Plan And College Savings Options

Connecticut 529 Plans At A Glance

Connecticut 529 Tax Deduction And Tax Rules

Connecticut lets each taxpayer subtract up to $5,000 a year in CHET contributions from Connecticut adjusted gross income, or $10,000 on a joint return, and any excess carries forward for the next five tax years (Conn. Gen. Stat. § 12-701a). The subtraction is based on your contributions to any CHET account, so a grandparent who files a Connecticut return can claim it for a gift to a grandchild's account (Connecticut Department of Revenue Services). Our state-by-state 529 tax deduction table shows how that compares with neighboring states.

The deduction is taken on Schedule 1 of Form CT-1040, and current-year contributions are used before any carryforward (Connecticut Department of Revenue Services). Growth is tax-deferred and qualified withdrawals are free of federal and Connecticut income tax, including withdrawals for an out-of-state college, which our list of qualified 529 plan expenses breaks down.

Connecticut doesn't require money to stay in CHET for any set period before you withdraw it. The statute allows the subtraction for contributions made during the tax year and says nothing about when the money comes out (Conn. Gen. Stat. § 12-701a), and the January 2026 CHET Direct plan description adds no holding period (CHET). That means Connecticut families paying tuition out of pocket can route up to $5,000 ($10,000 joint) through CHET first and still claim the deduction, a move states like Wisconsin and Montana have blocked, as our breakdown of 529 plan churning and withdrawal limits explains.

Federal law lets a 529 that's been open at least 15 years roll up to $35,000 into the beneficiary's Roth IRA without tax. Connecticut's income tax starts from federal adjusted gross income, and its Schedule 1 has no add-back for CHET withdrawals or rollovers (Connecticut Department of Revenue Services), but the department hasn't issued guidance aimed at Roth rollovers. Read our 529-to-Roth IRA rollover rules before you move leftover money.

Connecticut's lenient treatment of non-qualified withdrawals stands out. The state doesn't add back deductions you took in earlier years, and a beneficiary who receives a non-qualified CHET withdrawal can subtract the part included in federal income (Connecticut Department of Revenue Services). The federal income tax and 10% penalty on earnings still apply, and our breakdown of the 2026 529 plan expansion covers the new federal uses that avoid them.

How Connecticut's 529 Plan Ranks

Connecticut ranks 10th of the 50 state plans in our best 529 plans rankings, which include Washington, D.C., with a 69.1% 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. CHET makes the top 10 because its 0.07% fee is among the lowest of any state plan and its 7% tax break is above the middle of the pack.

Don't read this table as a reason to switch plans. Each state's score assumes a taxpayer in that state using its own plan, so a Connecticut resident who moves to New York's plan gets no New York deduction and gives up the Connecticut one, which leaves them worse off. The ranking shows what a dollar is worth inside CHET compared with what families in other states get, and the full rankings table lists all 50 state plans.

The gap with the top of the list comes down to the tax break, since CHET's fees are already lower than Indiana's. Indiana's 20% tax credit is what puts it at #1, and a larger deduction is the main lever that would move Connecticut families higher. 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 Connecticut Residents Use CHET?

Yes, for nearly every Connecticut taxpayer. The deduction only applies to plans the state sponsors (Conn. Gen. Stat. § 12-701a), and CHET Direct's index portfolios already cost less than most other states' plans, so there's little to gain by leaving. Our 529 plan tax deductions by state table shows how Connecticut's break compares.

Families who already hold another state's plan can roll it into CHET, and our explainer on 529 plan rollovers and transfers covers the once-per-year federal limit. Nonresidents can open CHET too, since any individual can open an account for any beneficiary (Connecticut Office of the Treasurer), but they should first check where to open a 529 plan in their own state.

Four years at an in-state Connecticut public university runs about $114,000 on campus, so the average CHET Direct balance of about $34,400 covers a little more than one year. Our Connecticut college costs and financial aid breakdown lists costs by school, and our 529 savings benchmarks by age show what to aim for.

Connecticut 529 Plan Details

Both CHET plans are sponsored by the Connecticut Office of the State Treasurer and managed by Fidelity Investments, which took over the program in 2021 (Connecticut Office of the Treasurer). As of June 30, 2026, the two plans held $8.18 billion across 234,240 open accounts, and Connecticut ranked 23rd among the states in 529 assets (The 529 Network). Our 529 plan and college savings statistics show how that compares nationally.

Other Connecticut College Savings Programs

Upromise. Upromise lets you earn money for your CHET 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 a CHET account to your Upromise profile, so the rewards stack on top of Connecticut's state tax deduction.

CHET Baby Scholars. Connecticut deposits a one-time $100 into a CHET account opened by a child's first birthday or within a year of adoption, as long as the child is a Connecticut resident, and there's no income limit (CHET Baby Scholars rules). Each child gets the deposit in only one account, and the state can reduce or stop it depending on funding. Our 529 plan overview explains how small early deposits grow.

Employer CHET tax credit. Starting with 2025 tax years, Connecticut employers can claim a credit equal to 25% of what they contribute to employees' CHET accounts, capped at $500 per employee (Connecticut Department of Revenue Services). Owners and their family members don't count as qualifying employees, and our breakdown of 529 plan contribution limits covers how employer money counts toward the $550,000 cap.

ABLE CT. Connecticut residents with disabilities can save in ABLE CT, a 529A account overseen by the State Treasurer, and the qualifying age of disability onset rose from 26 to 46 on January 1, 2026 (Connecticut Office of the Treasurer). ABLE balances up to $100,000 don't count against SSI's $2,000 asset limit, 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. Our list of what to do with leftover 529 money covers each option, and Connecticut graduates should also check Connecticut student loan forgiveness programs.

Frequently Asked Questions

Related Connecticut Resources

How We Sourced This Data

Plan details on this page come from the plan and the state: the CHET Direct website and its January 2, 2026 plan description (Fact Kit), the CHET Advisor 529 Plan offering statement and Fidelity Institutional plan page, The 529 Network 529 plan data as of June 30, 2026, the Connecticut Office of the Treasurer's CHET and ABLE CT pages, and the CHET Baby Scholars program rules. Tax rules come from Connecticut General Statutes § 12-701a, the Connecticut Department of Revenue Services' 2025 Form CT-1040 instructions, and its 2025 legislative overview. The college cost figure comes from our Connecticut financial aid page, which draws on institutional cost pages and NCES IPEDS data. Read more about how we fact-check and update content.

Page refreshed annually in September, after CHET publishes its updated fee schedule, and reviewed in January for tax season. Last full refresh: September 24, 2026.