If you contributed 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?
Its main purpose is to help families contend with the future high costs of their children’s or grandchildren’s college or vocational education.
What are the qualifications?
A 529 plan may be used at any school that is accredited and eligible to accept federal financial aid. Nearly all colleges and universities, community colleges, and career or technical schools are eligible. A 529 plan may be used at any eligible school, including two- and four-year colleges, graduate schools, and vocational and technical schools. Funds may be used for tuition, fees, and certain room and board costs.
What are the limits?
For 2023, you can contribute up to:
- $17,000 per donor, per beneficiary
What about carryovers?
You can roll over funds from your existing 529 account into a PA 529 plan by first opening a PA 529 account.
What if I don’t use it for education expenses?
The earnings portion of a withdrawal not used to pay for qualified expenses may be subject to federal income tax and a 10% federal penalty tax.
- State Section
- Pennsylvania Return
- Adjustments to Income
- Choose either IRC Section 529 Qualified Tuition Program Contributions or IRC Section 529A Pennsylvania ABLE Savings Account Program Contributions