dbouve
New Member

Maryland allows deductions for 529 accounts, Where is this addressed in the online product for Maryland?

 

State tax filing

You can get these deductions if you contributed to Maryland college savings plans. If you contributed to the Maryland Prepaid College Trust, the Maryland College Investment Plan or the Maryland Broker-Dealer Investment Plan, you may be eligible for a deduction of up to $2,500 per student on your Maryland taxes.
 
You can deduct up to $2,500 per beneficiary for every contract purchased for advanced tuition payments made to the Trust or contributed under the Plan or Broker-Dealer Plan in 2017. More details on this can also be found here Tax Advantages & Benefits of 529 Plans

You can use the steps here below to get to where you'd enter it in the Maryland State portion of your return:
  • Log into your return and click Take me to my return
  • Click on State and then Your State Returns at top of screen
  • If you have already entered your state, click Edit/Continue
  • Go through state portion until you see the screen that says Here’s the income that Maryland handles differently
  • Scroll down to Education section and click Start/Revisit next to Maryland College Savings Plan Contributions 
NOTE: Contributions to a qualified college savings plan are not deductible on your federal return, but may be deductible on your state return. If your state allows a deduction, you will see the entry point as you work through the state return. You can find more details here Information on 529 Plans

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State tax filing

I followed these instructions but I don't think the form is calculating correctly. To my understanding, the deduction should be capped at 2500 per dependent per adult. The issue is the system only ask for one number (not by parent or dependent), then appears to deduct the whole value. It does not appear to cap it at the 2500 limit. Keep in mind that the contributions beyond that could be rolled over. 

 

I contacted customer service but they barely seem to understand the issue. Anyone know of how to enter it considering my contributions go past the limit and I'd like to carry the additional over?

AmyC
Expert Alumni

State tax filing

The Turbo Tax program has been approved for use with the MD return, including the 502SU. All are aware of the group total not being broken up. You will need to keep track of your carryovers.

 

 

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State tax filing

I don't understand how the program can be correct. I'm entitled to a deduction of $25k (married couple with 5 beneficiaries) but when I input this amount, in the system, my MD tax liability increases by about $1000 vs. when I input a contribution amount of, say, $12,500.  I spoke to a rep (not a tax expert) who was unable to explain this and generally was not helpful.  I thought about upgrading for "expert tax advice" but the cost would be $100 (50 for federal and 50 for state) and I suspect the outcome would be equally unsatisfactory.  At this point, I'm thinking I may have to do my taxes with a professional tax preparer/accountant to ensure I'm getting it right.  

AmyC
Expert Alumni

State tax filing

Your program sounds stuck. When I input $25,000 the liability goes down. Let's try troubleshooting.

I suggest you delete the forms and try entering them again. Please do these things:

  1. Delete the form 502SU:
    1. Open or continue your return in TurboTax.
    2. In the left menu, select Tax Tools
    3. then select  Tools.
    4. In the pop-up window named Tool Center,
    5. choose Delete a form.
    6. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.
  2. Log out of your return.
  3. Try one or more of the following:
  4. Log back into your return.
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