topic CA Form 3805P for non-qualified education distribution in State tax filing

CA Form 3805P for non-qualified education distribution

cc98765 — Sat, 08 Feb 2020 22:24:18 GMT

I input an adjustment for the 529 QTP distribution I took for secondary school tuition. No tax or penalty at the federal level but I am reporting the earnings portion as an adjustment to CA. I see the taxable income increasing for this amount - no problem. However I don't see the 2.5% penalty tax on this earnings portion. Is this supposed to be calculated on CA form 3805P? If so, how do I get that form?

Re: CA Form 3805P for non-qualified education distribution

KrisD15 — Mon, 10 Feb 2020 20:28:01 GMT

That will be reported on Form 3805P, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax Favored Accounts which IS supported and ready in TurboTax.

Check first to see if the numbers flow from the Federal return, there may not be a need to adjust.

Re: CA Form 3805P for non-qualified education distribution

cc98765 — Mon, 10 Feb 2020 21:08:33 GMT

Can you advise how to report on federal to ensure it flows properly to CA? Assuming it flows properly from federal, it sounds like I do not need to separately adjust for expanded use of 529 funds on CA?

1099-Q

gross distribution $10,000

earnings $4,000

basis $6,000

high school tuition $16,690

Re: CA Form 3805P for non-qualified education distribution

KrisD15 — Tue, 11 Feb 2020 20:39:07 GMT

When you enter it on the 1099-Q screen on the Federal return (under Deductions & Credits, in the "Education" section) be sure to select that it was used for education expenses.

That should be all you need to do.