529 distributions

Forum|Forum|3 years ago
February 15, 2023
8 replies
62 views

Michigan does not allow distributions from MI 529 for K-12 tuition and deductions for contributions while a resident there. No longer a resident of MI and took a distribution from the MI 529 to pay for K-12 tuition in NC that is current residency and allows 529 distributions for K-12 tuition consistent with the Federal guidelines. A 1099Q was issued and the question is, is the distribution taxable by MI to a non resident?

SCswedeAuthor

Level 5

Correction to my earlier post, MI does allow deductions on 529 contributions while a resident of the state.

PattiF

Alumni - Intuit

No, the distribution is not taxable by Michigan for anyone as long as it is used for qualified expenses.

Please see this about Michigan's 529 plan.

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SCswedeAuthor

Level 5

Thanks PattiF. As I understand it, Michigan is one of the 15 or so States that do not allow 529 distributions to be used for K-12 tuition payments, only Colleges etc, and they are considered non qualified for MI state taxes. Since the person is now a resident of NC and not MI (they were a resident of MI for a number of years when the contributions to the 529 were made and deducted on the their MI state tax returns) when the distribution was made and was used for NC K-12 tuitions that does allow 529 distributions for K-12 tuitions, do they have to file a non resident MI state tax return for this distribution? I'm having trouble finding any information that addresses this situation. Hope this clarifies this unusual situation. Thanks