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?
It's a type of investment account you can use for education savings, which is usually sponsored by an individual state.
What are the qualifications?
Your 529 account can be used to pay for qualified education expenses at any eligible education institutions, including:
- Post-secondary trade and vocational schools.
- 2- and 4-year colleges.
- Postgraduate programs.
- K–12 public, private, and religious institutions (tuition only).
What are the limits?
529 account contribution limits are generally high—from $200,000 to $300,000 or more, depending on the state. For the MOST 529 Education Plan, you can contribute up to $325,000.
What about carryovers?
You may perform a tax-free rollover of a 529 account for the same beneficiary as often as once every 12 months. You may move money by direct rollover (money is transferred directly from your current 529 plan custodian to MOST 529) or by indirect rollover (you request a check for the amount from the current 529 plan custodian and reinvest it in MOST 529 within 60 days).
What if I don’t use it for education expenses
Nonqualified Withdrawals, any withdrawals that were not used for educational purposes, are subject to applicable federal and state income taxes on earnings and a 10% federal penalty tax on earnings. To report unqualified distributions, please go to:
- State Section
- Additions to Income
- Enter Nonqualified Distribution received from a qualified 529 plan not used for qualified higher education expenses
Where do I report my contributions?
- State Section
- Subtractions from Income
- Contributions to MO Higher education 529
For more information, please review the Missouri College Savings webpage.