If you made a contribution to the 529 plan, you will be able to claim a subtraction from income. If you withdrew money from your 529 plan, you may have to add the withdrawal back to your income if it was not used for educational purposes.
What is the DC 529 plan?
It is a simple way for parents and grandparents to save money for college or post-secondary vocational school.
What are the qualifications?
- Certain room and board costs
- Computers and laptops
- Books and other supplies/tools, if required by the school.1
These are considered qualified expenses, so withdrawals to pay for such items can be made tax-free.
What are the contribution limits?
For single filers : $4,000/yr
For joint filers : $8,000/yr
What about rollovers?
You may perform a federal income tax-free rollover from another 529 plan into your DC College Savings Plan account for the same beneficiary once every 12 months. You may also perform a federal income tax-free rollover from another 529 plan into your DC College Savings Plan account at any time when you change the beneficiary to a qualifying family member of the current beneficiary.
How much can I deduct on my taxes?
- Single filers may deduct $4,000
- Joint filers may deduct $4,000 per spouse for a total of $8,000
What if I don’t use it for education expenses?
Earnings on non-qualified withdrawals may be subject to federal income tax and a 10% federal penalty tax, as well as state and local income taxes and recapture of DC tax deductions.
- State Section
- Edit DC state return
- Subtractions from income
- Paid to DC College Savings Plan This Year