- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
State tax filing
No.
529 distributions (withdrawals) are governed by federal law. Any distribution consists of both basis (contributions) and earnings. You are not allowed to withdraw just contributions.
For example; if you have $10,000 in your account consisting of $6000 contributions and $4000 earnings, any distribution will be 40% earnings. So, if you take a $1000 distribution, $400 of it will be earrings. If the $1000 was not used for education, the $400 will be taxable income ($600 will be tax free). The $400 will also be subject to the 10% penalty (but not the $600).
‎June 21, 2022
4:53 AM