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529 withdrawal from NYSaves plan - to pay student loan

We withdrew 3500 from NYSaves 529 to pay 3500 student loan.  I am the account owner, and haven't lived in NY for 14 years.  The beneficiary now lives in NY.  The NY Turbotax is asking for every contribution and withdrawal from the beginning of time.  This is not easy to determine.  Are they asking for only the contributions I made, which I got a tax benefit on my NY state returns?  There were also numerous Upromise contributions, when that was a way to accumulate funds - not sure If I should include those.  What about rollover contributions from another plan (I consolidated 2 529 plans into the NYSaves one)?

 

And are they looking for all withdrawals - both qualified and non qualified?  We withdrew some becuase there was leftover money.  We also did a rollover from the 529 to the beneficiary's Roth IRA, which is now allowed.  

I have no idea how to proceed with this.  Thanks!

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1 Reply
AmyC
Expert Alumni

529 withdrawal from NYSaves plan - to pay student loan

While the federal government allows the distribution as a qualified withdrawal to repay student loan debt, the state of NY does not feel the same. NY classifies it as  a non-qualified distribution and it is taxable so you don't need to go through the hassle of entering anything since it is fully taxable.

 

Reference: How to make withdrawals | NY 529 Direct Plan

Distributions to pay K-12 tuition or qualified education loan repayments are considered nonqualified withdrawals for New York State tax purposes and will require the recapture of any tax benefits that have accrued on contributions.

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