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, and the cost of books, supplies, and equipment required for the enrollment and attendance of the Beneficiary at an eligible educational institution. Computers and related technology such as internet access fees, software or printers are also qualified when used primarily by the beneficiary when enrolled at an eligible educational institution.
What are the limits?
Tax deductions up to $3,000 for joint tax return & $1,500 for all other filers.
What about carryovers?
Yes, you can transfer funds from another 529 college savings plan to an account in Minnesota College Savings Plan for the same beneficiary once within a 12-month period without incurring federal income tax.
What if I don’t use it for education expenses?
The earnings portion of a non-qualified withdrawal is subject to federal income taxation and the additional 10% federal tax
Where to enter?
- State Section
- Subtractions From Income
- Education savings account contribution