Rollover into Illinois 529

[ubalach2]

I moved to Illinois in 2023 and shortly thereafter rolled over my previous state's 529 to Illinois'. In TurboTax, do I include the rollover contribution amount along with my regular contributions? Thank you.

[AmyC]

Mostly - just the contributions - not the earnings. For Illinois taxpayers, contributions to Bright Start are tax deductible. Contributions are deductible up to $10,000 per year ($20,000 if married filing jointly). You can also deduct the contribution portion (but not the earnings portion) of a rollover from another state's 529 plan.

Reference: College Savings 

[Hal_Al]

Yes, if the rollover was to one of IL qualified plans, “Bright Start” program, the "College Illinois" Illinois Prepaid Tuition Trust Fund, or the "Bright Directions". Reference: https://tax.illinois.gov/questionsandanswers/answer.206.html

You can only deduct the contribution portion but not the earnings portion) of a rollover from another state's 529 plan. 

Reference: https://brightstart.com/tax-benefits/#:~:text=If%20you%20recently%20moved%20to,of%20that%20given%20c....

[enfinityTX]

Are there limits on the rollover contributions form another state’s 529 plan? For instance, if I move from Florida to IL and roll over 100,000 (principal) to IL’s Brightstart 529, can I deduct 100,000 from my IL income and effectively save $4,950 in state tax (assuming 4,95 IL tax rate)?

[Hal_Al]

Q. Are there limits on the rollover contributions form another state’s 529 plan? 

A. Yes. "Individuals subject to Illinois state income tax can deduct from their taxable income up to a maximum of $10,000 per year for contributions made toward the purchase of any College Illinois! prepaid tuition contract. Married couples filing jointly can deduct up to $20,000 per year."

Reference: https://www.collegeillinois.org/HowDoesItWork/FAQs.html#:~:text=Individuals%20subject%20to%20Illinoi....