MI 529 plan account withdrawal

[stelladoerr]

This is my son's first year of college.  I entered the 1098-T forms into my federal return, and I did not qualify to take any credits for his tuition payments.  Now I am filing my Michigan state taxes, and it is asking me about entering the amount of a qualified withdrawal from his 529 plan.  I made 2 withdrawals- one for the fall semester and one for the winter semester (which technically didn't come out of his account until January 2022).  Do I enter those 2 amounts here?

Also, where does the 1099-Q form get entered?  Will this go on my son's tax return?  My federal form stated I did not need to enter it.

[FangxiaL]

The withdrawal in 2021 was reported to you on Form 1099-Q, you should enter the amount from that form.

If the qualified educational expense is more than the withdrawal from the 529 plan, you don't need to enter the 1099-Q on your son's return. If the form lists you as the recipient, you need to enter the 1099-Q on your return. 

[stelladoerr]

The Michigan form asks for a withdrawal that was made that was included in my federal income.  I still need to enter the amount I withdrew, even though it wasn't included in my federal income?

There were contributions to the 529 during the year, then we withdrew the entire amount split between 1st and 2nd semester.  Do I only include the entire amount withdrawn, or the amount withdrawn minus the earnings?

[ErnieS0]

No. Do not deduct any Michigan Educational Program Withdrawals in the Michigan section if they were not included in federal income.

Contributions to a Michigan 529 plan are deductible. Contributions must be reduced by qualified withdrawals during the year for purposes of determining the amount that may be deducted.

If you contributed in 2021 but did not withdrawal the money until 2022 then you can claim a deduction on your 2021 Michigan return.

You can learn more about Michigan's 529 plans at Michigan's 529 Savings Programs.