NJ tuition deduction question

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Hello turbotax friends, i'm from NJ and have a daughter attending college in 2022. Could I still use it as part of the Deduction (up to 10K) even if the tuition was paid via a 529 distribution? Thanks.

AmyCAnswer

Alumni - Intuit

NJ made some changes to their laws this tax year 2022. Page 3 shows:

Up to $10,000 for tuition costs if you, your spouse, or your dependent enroll in, or attend, a New Jersey institution of higher education.

There is no stipulation in the law for how you paid, through your hard earned savings in a 529 or a bank account. As this is a new law, there may be court cases to fine tune it. Currently, you would qualify. The same for line 12 and the additional exemption, you did pay the tuition through savings in a 529.

Page 8 shows: line 12, dependents attending college receive an additional $1,000 exemption, if qualification are met.

• Student must be claimed as a dependent on line 10 or 11.

• Student must be under age 22 on the last day of the tax year (born 2001 or later).

• Student must attend full-time. Full-time is determined by the school.

• Student must spend at least some part of each of five calendar months of the tax year at school.

• The educational institution must be an accredited college or post-secondary school, maintain a regular faculty and curriculum, and have a body of students in attendance.

• You must have paid one-half or more of the tuition and maintenance costs for the student. Financial aid received by the student is not calculated into your cost when totaling one-half of your dependent’s tuition and maintenance. However, the money earned by students in college work study programs is income and is taken into account.

Your 1099-Q does not have to be entered if all of the 1099-Q went towards qualified expenses - room and board or qualified education expenses.

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MaryK4

Alumni - Intuit

If you are claiming her as a dependent, you can allocate part of the 529 to maximize your education credits- as long as you do not "double dip" use the same amount of credit or tax-free 529. TurboTax should guide you through the entry of the expenses and payments that will maximize your savings. If you have additional questions, feel free to post again.

See Take Advantage of Two Education Tax Credits - TurboTax - Intuit.

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T

tuitionquestionAuthor

Level 2

Hi yes, she's my dependent. I entered my 529 info in turbo tax federal section together with her college info 1098-T. Her college was paid via the 529. Now when that's done, i went on to work on my NJ in turbo tax. There's a question in NJ forms asking if you have college expenses of which can be used as a deduction up to 10K. I did that and it increased my refund. So the question is, is that 'double-dipping' ? if not, how come Turbotax did not pick up that 529 info when filing the NJ forms? also, if it's double-dipping, how come Turbotax did not flag it as such? Thank you.

AmyCAnswer

Alumni - Intuit

NJ made some changes to their laws this tax year 2022. Page 3 shows:

Up to $10,000 for tuition costs if you, your spouse, or your dependent enroll in, or attend, a New Jersey institution of higher education.

There is no stipulation in the law for how you paid, through your hard earned savings in a 529 or a bank account. As this is a new law, there may be court cases to fine tune it. Currently, you would qualify. The same for line 12 and the additional exemption, you did pay the tuition through savings in a 529.

Page 8 shows: line 12, dependents attending college receive an additional $1,000 exemption, if qualification are met.

• Student must be claimed as a dependent on line 10 or 11.

• Student must be under age 22 on the last day of the tax year (born 2001 or later).

• Student must attend full-time. Full-time is determined by the school.

• Student must spend at least some part of each of five calendar months of the tax year at school.

• The educational institution must be an accredited college or post-secondary school, maintain a regular faculty and curriculum, and have a body of students in attendance.

• You must have paid one-half or more of the tuition and maintenance costs for the student. Financial aid received by the student is not calculated into your cost when totaling one-half of your dependent’s tuition and maintenance. However, the money earned by students in college work study programs is income and is taken into account.

Your 1099-Q does not have to be entered if all of the 1099-Q went towards qualified expenses - room and board or qualified education expenses.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"