Q. Does this mean I have to review 15 years worth of Illinois returns to add up the deductions I took in the year that I made contributions to the 529 plan?
A. Maybe. You have to determine that from your own records.
But the $25,000 shown as basis, on the final 1099-Q, may be the additional amount to be taxed. That assumes, that you deducted all prior contributions made to the fund. All prior distributions, being qualified, would have used up the other money, basis and earnings, so that the remaining basis ($25,000) consists of previously deducted contributions.
On the other hand, none of it (the $25K) may be taxable, if your previous qualified distributions already used up the basis consisting of deductible amounts. That's probably not likely, since IL has such a a high deduction limit.
