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?
- Tuition, mandatory fees, books, supplies, and equipment required for enrollment;
- Certain room and board costs;
- Computers, computer software, Internet access and related services;
- And certain expenses for a special-needs student.
What are the limits?
For single filers $5,000 per year
For joint filers $10,000 per year
What about carryovers?
You can now rollover from 529 plans to Achieving a Better Life Experience (ABLE) accounts without incurring federal taxes up to the annual ABLE contribution limit. North Dakota allows for rollovers of College SAVE 529 assets to ABLE accounts without incurring North Dakota state taxes.
What if I don’t use it for education expenses ?
If a withdrawal is not used for a qualified education expense, it is subject to federal and state income taxes and a 10% federal penalty tax. Penalties only apply to non-qualified withdrawals, and only to earnings.
Where do I report it?
- Log in to your account
- State Section
- Subtractions from income
- College SAVE account deduction