Iowa 529 Contribution 2023

[d_iowa]

Upon entering my Iowa 529 contribution, my taxes due increased? My contributions were not in excess of the limits ($3785/beneficiary) for the year. Entering any amount on the adjustments to income page seems to be increasing taxes due, which seems like a mistake.

[SteamTrain]

The majority of IA tax forms won't be ready until after 18 January....or later even if the IA team gets bogged down.

Until the final forms are loaded up, no one will be able to tell if it is a true error in the software...or just a mis-direction due to the final forms and entry field links not being finally operational.  Continue working on the Federal stuff, but come back on 19 January to re-update your software and try the IA interview again.

Intuit App

[mike wrightsman]

I don't see where I can post my Iowa 529 contributions on his year's TurboTax on the State Reurn

[SteamTrain]

@mike wrightsman 

Well...go thru the IA interview again.

Pictures below:

When you get to the page that asks for IA Adjustments....you say yes since the 529 is in the list

Then...on the next page you put it in there in the Iowa College Savings box.

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[bkra123456]

Yes but should entering something make the refund go up, not down? Same thing is happening to me.

[Pbrinkheide]

same thing happens to me.  my 529 contribution is added to income rather than shown as a deduction

[SteamTrain]

@Pbrinkheide   @d_iowa   @bkra123456    @mike wrightsman 

OK guys, here's the most likely problem.....The IA forms are NOT implemented yet.

The Main forms are not scheduled to be ready until 25 January (used to be 18 Jan...but they changed it), and a bunch of others, not until 8 FEB !!!

You can monitor it at the follwing website:

Intuit App

Until then you shouldn't even bother going thru the IA Q&A.

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I had the same problem with my NC tax returns one year.....I entered stuff before the final forms were issued in the software...and the $$ went into the prior year form lines....which were the wrong lines for the tax new year, resulting in refund/balance-due gibberish.

It should resolve itself either on Jan 25th/26th..or Feb 1/2, or Feb 8/9...depending on exactly which sub-forms the 529 donations end up on (should be IA Schedule 1...but I don't see it listed separately.)

Because of all the other forms not "expected" to be complete until 8 Feb...you might have a longer than normal wait, but that could depend on what else is in your IA tax file.

Just leave IA alone for a few weeks, then come back and go thru it again.

[mf44444]

Same problem. 

[Rossbro2]

Same here.  Super frustrating.  Like 1 step away from filing and I can't 😒

[SteamTrain]

MAin forms for Iowa, now not ready until AFTER 31 January!!!!!!!!!!

Frustrating I know, but it is what it is.....Get it right first time, don't rush things.

Once the forms are ready, go thru the IA Q&A and review again, just incase something else needs to be dealt with.

[brianpeterson2000]

I have been using Turbo Tax online for over a decade... Waiting for Iowa is annoying, yes. But I could accept that if only one thing was true...

What is SHOCKING is this software let's me merrily do this. That is get your Iowa tax bill all out of whack. Only if you are paying close attention, and go digging here at this forum. Then you tell me the Iowa tax team is not ready... 

It is  NOT ok that TurboTax does not alert users entering Iowa taxes that they are not ready. Forms or no forms. This is not an acceptable answer. I am glad I was not a new tax payer. I would have filed my taxes wrong!!!

I will also mention that various other prompts are missing like charitable contributions. I use Turbo Tax because I don't want to know about any of these dumb tax forms. I just want Feds and Iowa happy. If 10 years ago was today, and I first started filling my taxes, strait out of college (my case) I would have zero clue that these forms are missing.

[jmd1012871]

Yeah, I am having the same issue with 529 and other adjustments. Also I do not see this year for Iowa where to enter the information on vehicles to get the registration deduction. 

[SteamTrain]

As I've always claimed...never file your taxes before mid-Feb...and March is safer.

My brother.....smartly...... waits until mid-Feb to even start-up in the software!

[siege990]

There was an update that rolled out today/tonight (January 31) that looks like it's calculating it properly now (ie, when you put a number in for 529 contributions, the total amount owed to Iowa goes down and not up.)

[AnnetteB6]

This experience was investigated further to determine whether there is an issue with the TurboTax program.  TurboTax is working properly with regard to the Iowa 529 contributions.

The Iowa 529 contribution is a negative adjustment that would be used to lower the Iowa taxable income.  However, it is not the only adjustment that is taken into account.  For example, there is also an adjustment that is made for your 2022 (or prior year) Federal income tax refund.  This is a positive adjustment that would be used to raise the Iowa taxable income.  This positive adjustment could eliminate the negative adjustment made for the Iowa 529 contribution.  These are only a couple of the possible adjustments that may be made to the Iowa taxable income -- some are done automatically, and some must be entered.  The end result could be an addition to income instead of a subtraction.

The changes in the refund meter should not be followed too closely until all of your information has been entered.  TurboTax does calculations behind the scenes at different points in the program that make it go up and down constantly.

When you print your Iowa state tax return, take a look at Form IA 1040.  The total modifications (adjustments) will be shown on line 3.  Then, toward the bottom of that same form, there will be a section labeled IA 1040 Schedule 1.  In this section you can see all of the modifications and how they combine together.  Line 22 shows the Net Modifications used on your return.  If the only modification or adjustment that you entered was your 529 plan contribution, you will see that amount on line 19 as a positive number.  As long as the other modifications shown in column A of line 20 are not larger than your 529 contributions, then your Iowa taxable income will be reduced.

@d_iowa 

@mf44444 

@Rossbro2 

@brianpeterson2000 

@jmd1012871 

@siege990