Md. taxes: How can I be sure that contributions my wife

[erobelen]

The program simply asks for the total contributions, but my understanding is that we can deduct $2500 for each separate account, one in her name, one in mine. I'm not sure if Turbo tax automatically distinguished.

[ErnieS0]

TurboTax will not distinguish multiple accounts but it will allow you to enter up to $2,500 as a deduction on your Maryland income taxes.

You can see the subtraction on the screen Here's the income that Maryland handles differently.

If you are the account holder or a contributor, you can deduct up to $2,500 of payments each year from your Maryland State income per account - $5,000 for two, $7,500 for three, etc. Payments in excess of $2,500 per account can be deducted in future years until the full amount of payments has been deducted.

Related Resource:

• Tax Advantages & Benefits of 529 Plans

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[erobelen]

Thanks for the reply. I'm still not clear, however, whether we will successfully receive the full $5,000 tax credit in Maryland we are entitled to if we submit our Maryland tax return using Turbo Tax. (Last year, we used a private accountant.) To be clear, we have two separate Maryland College Savings Accounts for our son Theo. One is in my name (Erik Robelen). The other is in my wife's name (Sheila Walsh). In 2020, we contributed more than $2,500 to each account. 

As noted, Turbo Tax allowed me to indicate an overall amount for Maryland College Savings Account contributions, but it did NOT allow me to indicate that this was from two separate accounts. Can you please clarify whether we will be able to get credit for the full $5,000 if we file our Maryland return using Turbo Tax? Thanks you.

[AmyC]

Yes, you should enter $5,000 as that is the maximum allowed for the 2 accounts. The state allows it as one deduction regardless of the number of accounts. The maximum allowed for the number of accounts is what should be entered.