Quick Facts
Deduction/Subtraction: Up to $3,000 (MFJ) or $1,500 (others)
Credit Option: Up to $500, phased out starting at $93,610 AGI
Qualified Expenses: Tuition, fees, books, supplies, room & board, computers, internet
Non-Qualified Withdrawals: Taxable earnings + 10% penalty + possible MN recapture tax
Rollover Rule: Once per 12 months for same beneficiary
Form: Schedule M1529
How do I Report my 529 Plan for Minnesota?
If you contributed to a Minnesota 529 plan, you may claim the Minnesota 529 tax deduction (subtraction).
If you withdrew funds for non-educational purposes, you may need to add back income and pay a recapture tax.
What is a 529 Plan?
A 529 plan is a tax-advantaged savings plan under Section 529 of the Internal Revenue Code, designed for qualified higher education expenses such as:
- Tuition, fees, books, supplies, equipment
- Room and board (subject to limits)
- Computers and internet access for the beneficiary while enrolled
Qualifications
Expenses must be for enrollment or attendance at an eligible educational institution.
K-12 expenses do not qualify for Minnesota’s subtraction.
Limits
- $3,000 for married filing jointly
- $1,500 for all other filers
Carryovers/Rollovers
You can roll over funds from another 529 plan to a Minnesota plan for the same beneficiary once every 12 months without federal tax consequences.
Non-Qualified Withdrawals
- Earnings portion is subject to federal income tax + 10% penalty
- Minnesota may impose a recapture tax if you claimed a credit or subtraction previously
Where to Enter
- Go to State Section
- Edit Minnesota State Return
- Navigate to:
- Subtractions From Income
- Education Savings Account Contribution Subtraction
- Complete Schedule M1529