Washington DC 529 Plan Rules And College Savings Options
The DC College Savings Plan is the only 529 plan the District of Columbia sponsors, and families who pay District income tax should use it for the deduction of up to $4,000 per account owner. The deduction only goes to the account owner, so a parent who wants to claim it has to own the account, and grandparents can only claim it on accounts they own. The District also has strict recapture rules: it taxes Roth IRA rollovers, and pulling money out within two years of opening an account for anything other than college can cost you the deduction. If you're new to these accounts, start with how 529 plans work.
D.C. 529 Plans At A Glance
| Plan | Type | Annual Cost | Who It's For | Status |
|---|---|---|---|---|
| DC College Savings Plan | Direct-sold savings plan | 0.15%–0.80% asset-based fee, plus a $10 annual maintenance fee for D.C. residents ($15 for nonresidents) | D.C. families who open and manage the account themselves | Open |
D.C. 529 Tax Deduction And Tax Rules
An account owner who files a District income tax return can deduct up to $4,000 a year in contributions to DC College Savings Plan accounts, and on a joint return each spouse or registered domestic partner can deduct up to $4,000 for accounts they own (D.C. Code § 47-4509). Contributions over the limit carry forward for five years. Our state-by-state 529 tax deduction table shows how that compares with Maryland and Virginia.
Anyone can contribute to a DC College Savings Plan account (DC College Savings Plan), but only the account owner gets the deduction, so a grandparent's gift to an account a parent owns doesn't earn anyone a District deduction. Earnings are exempt from District income tax and qualified withdrawals are tax-free (D.C. Code § 47-4509), including for an out-of-state college, which our list of qualified 529 plan expenses breaks down.
| Situation | D.C. Tax Treatment |
|---|---|
| Contribution to the DC College Savings Plan | Deductible up to $4,000 per account owner, $8,000 on a joint return if each spouse owns accounts; excess carries forward five years |
| Contribution to another state's 529 plan | No D.C. deduction |
| Qualified college withdrawal (any accredited school, in or out of state) | Tax-free |
| K-12 tuition and expenses | Not addressed; D.C.'s statute defines qualified expenses by the federal higher education definition, and the District hasn't published K-12 guidance |
| Student loan repayment | Qualified under federal rules up to $10,000 lifetime; D.C. hasn't published separate guidance |
| Registered apprenticeship costs | Qualified under federal rules; D.C. hasn't published separate guidance |
| Non-qualified withdrawal | Earnings taxed by D.C., and past deductions are recaptured |
| Contribute and withdraw right away (529 churning) | Allowed for qualified college expenses; any other withdrawal within two years of opening the account triggers recapture |
| Rollover from the DC plan to another state's plan | Deductions recaptured if the account is less than two years old; no recapture after two years |
| Rollover from another state's plan into the DC plan | Tax-free if it's tax-free federally; D.C. hasn't said whether it counts toward the deduction |
| 529-to-Roth IRA rollover | Past deductions recaptured and the earnings portion taxed by D.C. |
D.C. doesn't require money to stay in the plan before it pays a qualified college bill. The statute recaptures deductions on withdrawals within two years of opening an account, but it exempts withdrawals used for qualified higher education expenses (D.C. Code § 47-4509). That means a District account owner paying tuition can route up to $4,000 through the plan and still keep the deduction, a move states like Wisconsin and Montana have blocked, as our breakdown of 529 plan churning and withdrawal limits explains.
The Roth rule catches families off guard. Federal law lets a 529 that's been open at least 15 years roll up to $35,000 into the beneficiary's Roth IRA, but the plan says District law doesn't address these rollovers, so claimed deductions would be recaptured and the earnings portion would be taxed by the District (DC College Savings Plan). Read our 529-to-Roth IRA rollover rules before you move leftover money.
D.C.'s 529 law ties qualified withdrawals to the federal definition of qualified higher education expenses in Section 529(e)(3) (D.C. Code § 47-4501), and the federal K-12, student loan, and apprenticeship uses were added in other parts of Section 529. The District hasn't published guidance on whether those uses are tax-free for District tax purposes, so confirm with the Office of Tax and Revenue before using DC College Savings Plan money for them. Our breakdown of the 2026 529 plan expansion covers what changed federally.
How D.C.'s 529 Plan Ranks
Washington, D.C. ranks 6th of the 50 state plans in our best 529 plans rankings, which include Washington, D.C., with a 72.2% 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. The District's 10.8% tax break is one of the largest in the rankings and carries the score, while its 0.23% fee is higher than most top-10 plans.
The District has no bordering states in the usual sense, so the table compares it with its two neighbors, Maryland and Virginia, whose plans are also in our 529 plans by state hub.
| State | Fees (Basis Points) | State Tax Break | Net ROI |
|---|---|---|---|
| Indiana (#1 overall) | 12.5 | 20% | 87.8% |
| Washington, D.C. (#6) | 23 | 10.8% | 72.2% |
| Maryland | 8 | 6.5% | 68.2% |
| Virginia | 5 | 5.8% | 67.6% |
Don't read this table as a reason to switch plans. Each score assumes a taxpayer in that jurisdiction using its own plan, so a District resident who moves to Virginia's lower-fee plan gives up the District deduction and gets no Virginia deduction, which leaves them worse off. The ranking shows what a dollar is worth inside the DC plan compared with what families elsewhere get, and the full rankings table lists all 50 state plans.
The gap with the top of the list comes down to two levers the District controls. Indiana's 20% tax credit is what puts it at #1, and D.C.'s fee of 0.23% is nearly three times Maryland's, so lower fees would move District families up even without a bigger deduction. If that matters to you, share these numbers with your members of the Council of the District of Columbia, and use our 529 plan tax deductions by state table to show how other states reward savers.
Should D.C. Residents Use The DC College Savings Plan?
Yes, for D.C. taxpayers who will own the account. The deduction only applies to the District's plan and only to the account owner (D.C. Code § 47-4509), so parents should open the account in their own name rather than a grandparent's. Our 529 plan tax deductions by state table shows how D.C.'s break compares.
Families who expect to roll leftover money to a Roth IRA, or who could need the money back within two years, should weigh D.C.'s recapture rules before contributing more than they plan to spend on college. Families who already hold another state's plan can roll it into the DC plan, and our explainer on 529 plan rollovers and transfers covers the once-per-year federal limit. Nonresidents can open the plan too, but they pay a higher $15 maintenance fee and should first check where to open a 529 plan in their own state.
The average DC College Savings Plan account held about $40,200 as of June 30, 2026 (The 529 Network). Our 529 savings benchmarks by age show what to aim for, and District graduates heading into public service should check District of Columbia student loan forgiveness programs.
D.C. 529 Plan Details
The DC College Savings Plan is administered by the District's Chief Financial Officer (D.C. Code § 47-4505) and managed by Ascensus College Savings Recordkeeping Services (DC College Savings Plan). As of June 30, 2026, the plan held $1.86 billion across 46,154 open accounts, and the District ranked 39th among the states and D.C. in 529 assets (The 529 Network). Our 529 plan and college savings statistics show how that compares nationally.
| D.C. Plan (June 30, 2026) | Open Accounts | Assets | Average Balance |
|---|---|---|---|
| DC College Savings Plan | 46,154 | $1.86 billion | $40,233 |
| All D.C. 529 plans | 46,154 | $1.86 billion | $40,233 |
DC College Savings Plan
This is the District's only 529 plan, and it's sold directly with no commissions, loads, or sales charges (DC College Savings Plan). The total annual asset-based fee runs 0.15% to 0.80% depending on the portfolio, plus a $10 annual maintenance fee for District residents. On a $40,233 balance, the plan's average as of June 30, 2026, a 0.15% portfolio costs about $60 a year before the maintenance fee, which our 529 balance by age benchmarks can put in context.
| Program manager | Ascensus College Savings Recordkeeping Services |
| Minimum contribution | $25, or $25 a month by automatic deposit |
| Maximum account balance | $500,000 per beneficiary across all accounts |
| All-in annual cost | 0.15%–0.80% asset-based fee, plus $10 a year for D.C. residents or $15 for nonresidents |
| Investment options | Year of College Enrollment (age-based) portfolios, eight individual portfolios, and a Principal Protected Portfolio |
| Who can open | Any U.S. citizen or resident alien 18 or older with a Social Security number and U.S. address |
| Official source | dccollegesavings.com or 800-987-4859 |
Other D.C. College Savings Programs
Upromise. Upromise lets you earn money for your DC College Savings Plan 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 DC College Savings Plan account to your Upromise profile, so the rewards stack on top of D.C.'s tax deduction.
Leftover money. Families with money left after college can change the beneficiary to a sibling or another relative without District recapture, since transfers within the program are exempt (D.C. Code § 47-4509). Student loan payments and Roth IRA rollovers work federally, but the District taxes Roth rollovers and hasn't addressed loan payments, so our list of what to do with leftover 529 money is worth reading first. District graduates in health care or public interest law should also check District of Columbia student loan forgiveness programs.
Frequently Asked Questions
What Is The D.C. 529 Plan Called?
Washington, D.C.'s 529 plan is the DC College Savings Plan, a direct-sold plan managed by Ascensus. The District doesn't offer an advisor-sold or prepaid plan, and our 529 plans by state hub lists every state's plans.
Is The D.C. 529 Plan Tax Deductible?
Yes. Account owners can deduct up to $4,000 a year, or $8,000 on a joint return when each spouse owns accounts, with a five-year carryforward (D.C. Code § 47-4509). Contributions to other states' plans don't qualify, which our state 529 tax deduction table shows state by state.
Can Grandparents Get The D.C. 529 Deduction?
Only if they own the account and file a District return. The District limits the deduction to account owners (D.C. Code § 47-4509), so a grandparent who gives to a parent-owned account gets no deduction, and our breakdown of how 529 plans work covers who can own and fund an account.
Can I Use A D.C. 529 Plan At An Out-Of-State College?
Yes. Qualified withdrawals are exempt from District income tax wherever the eligible school is (D.C. Code § 47-4509). The list of qualified 529 plan expenses is the same no matter where the school is.
Can I Contribute To A D.C. 529 Plan And Withdraw Right Away?
Yes, for qualified college expenses. The District recaptures deductions on withdrawals within two years of opening an account, but withdrawals for qualified higher education expenses are exempt (D.C. Code § 47-4509). 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 D.C. 529 Money For Non-Qualified Expenses?
D.C. taxes the earnings in the year you withdraw them and recaptures the deductions you took, unless the beneficiary died, became disabled, or received a scholarship (D.C. Code § 47-4509). 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 D.C. 529 Plan For Private K-12 School?
Federally, yes, up to $20,000 per beneficiary per year starting in 2026. D.C.'s 529 law hasn't been updated to address K-12 withdrawals (D.C. Code § 47-4501), so ask the Office of Tax and Revenue before relying on District tax-free treatment, and see our walkthrough on using a 529 plan for private school.
Related D.C. Resources
How We Sourced This Data
Plan details on this page come from the plan and the District: the DC College Savings Plan website and FAQs, The 529 Network 529 plan data as of June 30, 2026, and D.C. Code §§ 47-4501, 47-4505, and 47-4509, which set the program's administration, definitions, deduction, and recapture rules. The Roth IRA rollover treatment comes from the plan's published FAQ, which cites D.C. Code § 47-4509. Read more about how we fact-check and update content.
Page refreshed annually in September, after the DC College Savings Plan publishes its updated fee schedule, and reviewed in January for tax season. Last full refresh: September 24, 2026.
Editor: Clint Proctor Reviewed by: Colin Graves