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panchocincos
New Member

Why is Turbotax saying there are income limits on 529 plan distributions? I was not aware that this was a thing.

 
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JenniferC
New Member

Why is Turbotax saying there are income limits on 529 plan distributions? I was not aware that this was a thing.

From TurboTax FAQ:

A 529 plan, also called a qualified tuition plan or QTP, is operated by a state or educational institution with tax benefits and other potential incentives, making it easier to save for future college, post-secondary training, and K–12 education expenses.

Formerly limited to higher education, 529 plan distributions can now be used towards qualified K–12 expenses in tax years 2018 through 2025 (up to $10,000 per year per student).

You can set up a 529 plan for yourself or a designated beneficiary, such as a child or grandchild. Earnings on 529 plans aren’t taxed by the federal government (nor the state, in most cases) if the distributions are used towards qualified education expenses.

Distributions from 529 plans are generally reported on Form 1099-Q.


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