In Indiana, where I live, I get a .25 reduction on the amount that I put in the account.

So, if I put in $4000 a year, it gives me a tax credit (direct deduction on the amount of tax that I owe) of $1000.

I'm not sure what state you are in and what the state tax deduction is for your specific location, but that is how it works for me.

Oh, and I can transfer the amount from child to child. So if I don't use all of the funds for my oldest, I can then transfer the rest of the assets to my second child and so on.