How much can be invested each year?

If you contribute $16,000 a year or less, you’ll qualify for the annual federal gift tax exclusion. However, under special rules unique to 529 plans, you can avoid the federal gift tax if you gift a lump sum of up to $85,000 ($170,000 for joint gifts) and choose to spread the gift evenly over five years. Married couples may contribute as much as $32,000 per year or $160,000 as a lump sum.