n11
New Member

Education Savings Plan Contributions refer to which amount, the total contributed or only what is deductible?

 

Education

What is the context in which you see this? Is it on a TurboTax screen? If so, what is the heading of the screen? And is this for a federal education savings plan or for a state one? Please give more details.

 

Remember that we in the Community cannot see your tax return, so we know only what you tell us.

n11
New Member

Education

Hi, I am referring to "Education Savings Plan Contributions" an input box in a Kansas Return. I have a Learning Quest Education plan(529). The page I am referring to has "Enter Your Education Savings Contributions" at the heading. As before I stated I have 2 kids. I wanted to know if the "Education Savings Plan Contributions" input had to do with the Total contributions or just the deductible portion as I notice it calculates differently.

Considering I do not know how the calculations are done on the back end I am so far using the total contributions. Please let me know how to proceed here. I will be pleased to offer any other information necessary.

Thank You! 

Hal_Al
Level 15

Education

I'm not familiar with the Kansas software, specifically.  But for those states, I am familiar with, you enter the total amount. TurboTax will calculate the deductible amount. 

 

Some states allow you to carry the nondeductible amount forward and deduct it next year. TurboTax will handle this automatically, in that case.

Education

You are referring to line A13 on Schedule S, "Contributions to Learning Quest or other states’ qualified tuition program", right?

 

During the last year, I answered a question from a taxpayer who had one child and who entered the actual amount of expense, something like $3,150. The taxpayer figured that if the amount needed to be limited that TurboTax would do it.

 

Unfortunately, TurboTax used the whole amount, not the $3,000 per the limitation.

 

I raised this as an issue with the product staff, and the reply was "The text next to the entry says that there is a limit of $3,000 for one student and $6,000 for two students, and the taxpayer should not have entered a larger number" (note that $3,150 would have been acceptable for two students, but the taxpayer had only one). That is, TurboTax wants the net number and expects the taxpayer to enter the limited (i.e., deductible) amount.

 

I pointed out that this would be confusing because TurboTax would normally limit such fields for the taxpayer (as Hal_Al pointed out above), and furthermore, if the taxpayer accidentally entered $30,000 instead of $3,000, TurboTax would cheerfully use the $30,000 as an adjustment to income and really foul up the return.

 

I got the same reply - the taxpayer is expected to enter the correct amount (even though this is not true in many other places).

 

So, while I have not run a Kansas return with this issue recently, I would encourage you to enter the limited amount, because unless TurboTax has changed the Kansas return (and I have no reason to think that this issue has been updated), TurboTax is going to use whatever you entered, right or wrong. So enter the right number (i.e., limited to $3,000 for one student or $6,000 for two). Besides, even if TurboTax has implemented the limitation, entering the correct number won't hurt, so go ahead and enter the limited (deductible) amount.