@Hal_Al Agreed, no reference in Form 760 instructions. No place for adjustment in TT unless you use
Income>Here's the Income that Virginia Handles Differently>Other Additions to Federal Income>choose Edit: "Enter a brief description and a total amount for any other addition to federal income you need to report in 2022 (these are not common.)" I would enter something like Recapture of prior 529 contribution deduction for nonqualifed distribution
In Forms, entering a description here populates Other Additions Statement, Code 99 Other Additions.
In the paragraph below, I have copied and pasted what seems to be the applicable reference from the Code of Virginia. Are there tax rules regarding taxable income that are
- A: the state law, but
- B: the income in question is not required to be reported inasmuch as the state-published income tax preparation instructions does not address it and therefore
- C: rules are unenforced and the taxpayer need not report income??? I'd rather be safe than sorry but don't want to pay what I'm not required to.
From Code of Virginia Code of Virginia Code - Chapter 3. Income Tax, § 58.1-322.03. (Contingent expiration date — See Editor's note) Virginia taxable income; deductions, Section 7a (which deals with 529 contribution deductions)
Notwithstanding the statute of limitations on assessments contained in § 58.1-312, any deduction taken hereunder shall be subject to recapture in the taxable year or years in which distributions or refunds are made for any reason other than (i) to pay qualified higher education expenses, as defined in § 529 of the Internal Revenue Code or (ii) the beneficiary's death, disability, or receipt of a scholarship. For the purposes of this subdivision, "purchaser" or "contributor" means the person shown as such on the records of the Virginia College Savings Plan as of December 31 of the taxable year. In the case of a transfer of ownership of a prepaid tuition contract or college savings trust account, the transferee shall succeed to the transferor's tax attributes associated with a prepaid tuition contract or college savings trust account, including, but not limited to, carryover and recapture of deductions.
