California 529 Plan Calculator
2026Calculate 529 college savings plan growth and tax benefits in California. See CA state tax deduction availability, contribution limits, and projected education savings for 2026.
Written and reviewed by Konstantin Iakovlev · Methodology · Updated
Total College Cost
$176,766.87
With 4% inflation
Projected Savings
$58,861.83
Funding
33%
Funding Gap
$117,905.04
Monthly Needed to Fully Fund
$750.77
529 Plan Projection
| Years Until College | 13 years |
| Total College Cost (with inflation) | $176,766.87 |
| Current Balance | $0.00 |
| Total Contributions | $39,000.00 |
| Investment Growth | + $19,861.83 |
| Projected Savings at College | $58,861.83 |
| Funding Gap | $117,905.04 |
| Monthly Contribution Needed | $750.77 |
Disclaimer: This calculator is for informational purposes only and does not constitute tax, financial, or legal advice. Results are estimates based on the information you provide and current rates. Always consult a qualified tax professional or financial advisor for advice specific to your situation.
How does a 529 plan work in California?
A 529 plan is a state-sponsored, tax-advantaged investment account designed to fund qualified education expenses. California levies a state income tax but does not offer a 529 contribution deduction or credit, so the only tax benefit is federal tax-free growth and qualified-withdrawal exclusion. California residents are free to shop any state's 529 plan based on fees and performance.
Earnings inside a 529 grow federally tax-free, and withdrawals used for qualified expenses (tuition, room and board, books, computers, and up to $10,000/year in K-12 tuition) are also federal tax-free. SECURE 2.0 expanded options further: unused 529 funds (held 15+ years) can be rolled to a Roth IRA for the beneficiary, subject to a $35,000 lifetime cap and annual Roth IRA contribution limits. Non-qualified withdrawals trigger ordinary income tax on earnings plus a 10% penalty.
When choosing a plan, weigh the expense ratios, age-based portfolio quality, and direct-sold vs. advisor-sold fee structures. Direct-sold plans typically have the lowest fees. The calculator above projects future balance assuming compound growth and consistent contributions through the beneficiary's college years.
California 529 plan: name, manager, and tax benefit
- Plan name
- ScholarShare 529
- Plan manager
- TIAA-CREF
- State tax benefit
- No state income-tax deduction for 529 contributions (California is one of just 7 states with no deduction)
California's ScholarShare 529 is widely regarded as one of the highest-rated state plans (Morningstar Gold rating since 2017) due to TIAA-CREF's low expense ratios (0.06%–0.51%) and well-designed age-based portfolios. California is one of just 7 states (with DE, HI, KY, ME, MN, NJ, NC) that offers no state income-tax deduction for contributions — but California still benefits from federal tax-deferred growth and tax-free qualified withdrawals. The Workplace Savings program offers payroll deduction for contributions.
California Tax & Education Facts (2026)
| State Income Tax | progressive (up to 13.3%) |
| 529 State Tax Deduction | Not offered |
| State Sales Tax | 7.25% |
| Avg. Property Tax Rate | 0.71% |
California 529 plan — frequently asked questions
What is California's 529 plan?
California ScholarShare 529 — administered by TIAA-CREF. Widely regarded as one of the highest-rated state plans (Morningstar Gold rating since 2017) due to TIAA-CREF's low expense ratios (0.06%-0.51%) and well-designed age-based portfolios. California is one of just 7 states (with DE, HI, KY, ME, MN, NJ, NC) that offers NO state income-tax deduction for 529 contributions — but California still benefits from federal tax-deferred growth and tax-free qualified withdrawals.
Why does California have no 529 deduction?
California has periodically considered adding a state-tax deduction for 529 contributions (most recently AB 1006 in 2023) but no such deduction has passed. The legislature's rationale: California's progressive tax structure (top rate 14.4%) means deductions disproportionately benefit high earners, and California's budget already carries the largest pension liabilities in the country. ScholarShare 529 provides federal benefits regardless of state tax treatment.
Should I use California ScholarShare 529 vs another state's plan?
For California residents: use ScholarShare 529 because of TIAA-CREF's exceptional fund quality (Morningstar Gold) and low expense ratios. There's no California tax benefit either way (no deduction), so investment quality is the deciding factor. ScholarShare's Total Stock Market index portfolio (0.06% expense ratio) is among the lowest-cost 529 fund options in the country.
How do California 529 plan distributions work?
Federal qualified distributions: 100% tax-free for tuition, mandatory fees, room/board, books, computers, K-12 tuition (up to $10K/year), apprenticeship costs, and student loan repayment (up to $10K lifetime). California treats most distributions same as federal. Non-qualified distributions: earnings portion taxed as California ordinary income (up to 14.4%) PLUS 2.5% California penalty (vs federal 10% penalty). Roll-over to Roth IRA (SECURE 2.0): permitted federally, also OK in California.