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 529 plan?
A 529 plan is a tax-advantaged savings plan designed to save for qualified higher education expenses including tuition, room and board. 529 refers to Section 529 of the Internal Revenue Code.
What are the qualifications?
Qualified higher education expenses include: tuition, certain room and board expenses, fees, books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution, which includes most post-secondary institutions. Computers and related technology such as internet access fees, software or printers are also qualified education expenses when used primarily by the beneficiary when enrolled at an eligible educational institution.
What are the limits?
- $10,000 for filing jointly
- $5,000 for filing single
What about carryovers?
Yes, you can transfer funds from another 529 college savings plan to your MESP account for the same beneficiary once within a 12-month period without incurring a taxable event.
What if I don’t use it for education expenses?
The earnings portion of a non-qualified withdrawal is subject to state and federal income tax and the 10% federal penalty tax on earnings (the “Additional Tax”). See the Program Description for details.
Where to Enter?
- State Section
- Michigan Return
- Subtractions from Income
- Enter your total contributions, less qualified withdrawals, to MI 529 Plan
For more information, please see: