topic College choice 529 credit not calculating correctly in Education

College choice 529 credit not calculating correctly

sstanski — Thu, 06 Jun 2019 10:28:34 GMT

I contributed a total of $5,000 into College Choice 529 plans in 2016. The Indiana credit is 20% of your contribution up to $1,000. $5,000 x 20% = $1,000. Therefore I should be eligible for a full $1,000 credit. However, Schedule IN -529 is limiting the credit to IT-40 line 8, which is State adjusted gross income. However, according to College Choice, there is no income limitation. Can you please help? Thank you.

The credit given for 529 fund contributions is not a refu...

Fern — Thu, 06 Jun 2019 10:28:36 GMT

The credit given for 529 fund contributions is not a refundable tax credit. That means once your tax liability has been reduced to $0, you will not get any further credit for the contribution.

In your case, the amount of tax you owe is less than $1,000. Your credit is limited to the amount of taxes you owe (as reported on line 8 on the IT-40.)

See pages 2 and 3 of the State of Indiana Information Bulletin.

http://www.in.gov/dor/files/ib98.pdf