topic Re: This worked perfectly, thanks! in Get your taxes done using TurboTax

If married filing separately on same return in DC, are you limited to a total deduction of $4,000 for 529 contributions (ie not $8,000)?

BD111 — Mon, 03 Jun 2019 23:45:58 GMT

My wife and I both live in DC and each contributed $4,000 to separate 529 plans for our child (i.e., a total household contribution of $8,000). We're filing as "married filing separately on the same return," as that seems to give us the lowest overall state tax. It looks like Turbo Tax is limiting us to a total of $4,000 in 529 contribution deductions, not $8,000. I know that if married filing jointly, we could deduct a total of $8,000 in 529 contributions (but it overall doesn't make sense to change the filing status). I gather for some reason that doesn't apply to married filing separately on the same return? I'd appreciate if anyone has a good explanation for this, as we might change our 529 contributions going forward. Thanks!

This worked perfectly, thanks!

BD111 — Mon, 03 Jun 2019 23:46:02 GMT

This worked perfectly, thanks!

Re: This worked perfectly, thanks!

mcspence1981 — Tue, 16 Jun 2020 15:42:58 GMT

Hi, I don't see a reply here to your original question, but I have the same problem. Setting up a 529 for our new child and planning for 2020 taxes. How did you handle deducting the full $8,000?

Thanks!

Re: This worked perfectly, thanks!

CatinaT1 — Sat, 20 Jun 2020 13:43:18 GMT

It depends on if your state has a deduction for these type of contributions. There is no federal deduction. What state are inquiring about?

Re: This worked perfectly, thanks!

mcspence19 — Tue, 30 Jun 2020 13:18:22 GMT

Hi @CatinaT1, sorry for the different username. Somehow it's no longer allowing me to post from the same one I did a couple of weeks ago. We are in DC and want to make a max contribution to the DC College Savings Plan 529, but we file separately on a joint return like the original poster (a quirk of DC tax law, I understand, rather than jointly). My question is whether my wife and I each need to set up a separate 529 to make the max $4000 contribution this year or if we can open a single 529 and contribute the full $8000 to take advantage of this year's deduction. Thank you!

Re: This worked perfectly, thanks!

CatinaT1 — Sat, 04 Jul 2020 13:19:57 GMT

If you are filing separately you have a max of $4,000, but can carry over your contributions for up to five years. If you filed separate on a combined return, you will both get the $4,000.

According to the Instructions published by the DC Dept of Revenue:

You may deduct up to $4,000 annually for contributions you made to all qualified college savings accounts of which you are the owner. If you are married and file a joint or combined separate return, each spouse/registered domestic partner may deduct up to $4,000 for contributions made to all accounts for which that spouse/registered domestic partner is the sole owner. Contributions made to one or more accounts in excess of the allowable $4,000 ($8,000 for eligible joint filers) annual deduction may be carried forward as a deduction (subject to the annual limitation) for up to five years.

https://otr.cfo.dc.gov/sites/default/files/dc/sites/otr/publication/attachments/2019%20D-40_Booklet.pdf

Re: This worked perfectly, thanks!

mills014 — Sat, 13 Feb 2021 23:27:08 GMT

What was the solution to this problem? I see that the OP references something 'worked perfectly,' but I don't see a post that is stating what the solution is. We have the same problem, two separate $4000 contributions for each spouse, but turbo tax only seems to be deducting $4000 (filing DC taxes as married filing separately on same return). Thanks!

Re: This worked perfectly, thanks!

mcspence19 — Sun, 14 Feb 2021 15:38:05 GMT

Not sure how it actually works in TurboTax, but we confirmed with a DC tax professional that we did it wrong. Need to set up accounts in each of your names and deposit $4k separately in each one to take advantage of the full $8k deduction per couple. As it is, I’ll have to carry over $4k of my deduction to my 2021 taxes.

Re: This worked perfectly, thanks!

mills014 — Sun, 14 Feb 2021 16:53:38 GMT

Thanks! Appreciate it!! We’re good to go on the two accounts and know all $8000 can be deducted as a result. Just wondering how to ensure Turbo Tax includes it correctly. It has in the past but this year it seems to only deducting $4000 even when I enter $8000. It doesn’t ask me for my contribution abs my wife’s contribution separately which seems odd since that would be important information.

Re: This worked perfectly, thanks!

mcspence19 — Sun, 14 Feb 2021 17:08:11 GMT

Ah, sorry. Hope one of the Intuit folks can answer this. I’d love to know for next year. Good luck!

Re: This worked perfectly, thanks!

AJBinDC — Sat, 08 May 2021 03:11:22 GMT

Yes this is definitely a glitch in the TurboTax system. But you can fix it by going to Forms --> Schedule S (under District of Columbia forms) and entering 4,000 for each spouse in the Subtractions Smart Worksheet. You would also need to make sure that Line 6 on Schedule I shows 8,000. Hope that helps!

Re: This worked perfectly, thanks!

rfs13 — Sun, 14 Jan 2024 22:01:30 GMT

I hope Intuit does finally address this glitch. We're also married filing separately (common for DC taxes); also contributed $4K each to a child's 529 plan; and are also not receiving the full benefit. Oddly, we're showing zero reduction in taxable income from the first $4000 we enter (no matter how it's allocated between us), but then full benefit for the second half of the contribution (above $4000, up to $8000, again however it's allocated). And: we tried the fix suggested above by AJbinDC in 2021 -- to go into "Forms" and make sure that it's $4K each on Schedule S, and $8K on line 6 of Schedule I -- and it doesn't help. Please, advice, anyone? Or better: Intuit, please address this?! Thanks....

Re: This worked perfectly, thanks!

DaveF1006 — Tue, 16 Jan 2024 22:55:38 GMT

It depends on how you filed your DC returns. According to the Instructions published by the DC Dept of Revenue:

If you are filing separately you have a max of $4,000, but can carry over your contributions for up to five years. If you filed separate on a combined return, you will both get the $4,000

If you are married and file a joint or combined separate return, each spouse/registered domestic partner may deduct up to $4,000 for contributions made to all accounts for which that spouse/registered domestic partner is the sole owner.

Contributions made to one or more accounts in excess of the allowable $4,000 ($8,000 for eligible joint filers) annual deduction may be carried forward as a deduction (subject to the annual limitation) for up to five years.

@rfs13

Re: This worked perfectly, thanks!

hrlpetworth — Thu, 06 Mar 2025 04:23:57 GMT

I think that everyone on this thread understands the law. What seems to be impossible is to take advantage of it using the Turbotax software, as Turbotax only allows the couple filing "separately on the same return" to deduct a total of $4000.