hello,
i have 2 kids and i have been contributing 5k each every year , over the last few years. I put 10k becuase the max tax deduction that you can get is 10k.
In 2024, i heard from others that you can actually contribute more than 5k each, but your tax deduction is only capped at 5k. I also heard that you can contribute one time for a 5 years worth..etc.. but i didnt really read into this.
So i mis-read that the maximum you can contribute is 20k and what i did is i contributed total of 40k for my 2 kids. (20k each).
Now in the Turbo tax NY State tax filing - it asked me to enter how much contribution i made and it says put only maximum of 10k.
I have the following questions,
1) I read up that maximum annually is actually 18k - and its not 20k. Now that i already contributed 20k, does it mean i am using that "One time 5 year contributions" and i cannot contribute anymore in next 4 years? How come NYSaves let me contribute more than what i could annually?
2) So is there anywhere in turbotax that I should enter this 40k contribution somewhere? or just put 10k even tho my total contribution was really 40k?
Thanks,
1. A. The gift tax increases a little each year so you have to check each year for gift tax liability. When you go over the gift amount, you need to file a gift tax return.
1. B. The one time 5 year contribution is treated as if it were 5 years of maximum gift. No other contributions are allowed. This does not affect your lifetime limit.
1. C. You can contribute as much as you want. You just have to either pay the gift tax 1A or make a 5 year deposit at one time 1B.
Since you overcontributed, you will need to file a gift tax return. See 529 Contribution Limits 2025: Gift Tax
2. No, you enter your allowed deduction. Under subtractions line 30, the amount is limited to $5,000 per taxpayer/ $10,000 MFJ.