How do I enter Virginia 529 contributions? They are tax deductible up to 4K

[kknope]

Where do I enter VA529 contributions. Contributions are deductible up tp 4000. See https://www.virginia529.com/learn/benefits/?ef_id=Cj0KCQiAgomBBhDXARIsAFNyUqP08PyEO0a-NPDUf0dLKzBfEy...

[KathrynG3]

Yes, you are correct that the Virginia 529 plan should be included per 2020 Form 760 Resident Individual Income Tax Booklet, page 25. If the initial opportunity was missed at Here's the income that Virginia handles differently, and Virginia is already finished, follow these steps to return to this area.

It will be under Income at Your 2020 Virginia taxes are ready for us to check. 

From this screen, scroll down to Income and Edit to make adjustments.

Next, under Education, select Virginia College Savings Prepaid Tuition (Section 529) Plan and Start.

[Smokenwilly]

Is the VA-529 deductible up to 4K per grandchild or total? I have 4 grandchildren?

[JotikaT2]

The deduction is actually per account per year.  So if you have a different account set up for each grandchild, you can deduct $4,000 per grandchild.

Please see the attached link for more details.

VA 529 Plans

@Smokenwilly

[Smokenwilly]

Thanks! That is what I thought but Virginia turbo tax software and q&a doesn’t  have a place to put yearly deduction, at least on my turbo tax version. I’m supposedly updated. Using the “voluntary” position on the form relates only to applying the anticipated refund to your VA-529 not another place on my form is there a place to put these contributions

Any clue where that might be? It may be a software glitch? Please advise

[DianeW777]

Yes. The adjustment for your 529 plan contribution on the Virginia (VA) tax return should be entered on the screen labeled 'Here's the income that Virginia handles differently'.

• Scroll to Education > select Virginia College Savings Prepaid Tuition (Section 529 Plan) > Start or Revisit/Update
• Continue to answer the questions about your plan

Virginia529 is a savings plan that offers flexible, affordable, and tax-advantaged savings for qualified expenses through its four programs:

1. Prepaid529SM,
2. Invest529SM,
3. CollegeAmerica® 
4. CollegeWealth®

For information on establishing accounts, visit Virginia529.com. You are not required to be the owner of record for an account in order to direct a contribution of all or part of your income tax refund. However, please remember that only the Virginia529 account owner of record as of December 31st is eligible to take the Virginia state tax deduction associated with Virginia529 accounts.

Please note that the CollegeWealth and Prepaid529 programs are no longer accepting new accounts, but existing account owners may continue to contribute to their current CollegeWealth accounts and Prepaid529 contracts. For more information Form 760 Instructions.

[Cibuk]

VA 2020 Form 760 at page 21, section 104 says "only the owner of record for an account may claim a deduction for contributions made."  As a grandparent, I cannot claim a deduction for contributions made to my grandchild's account if the owner of record is my daughter.  Correct?

[Cibuk]

How do I enter Virginia 529 contributions if I am a grandparent contributing to grandchild's account owned by my daughter?  From my review of Virginia's 2020 Form 760, it would appear that I cannot claim the contribution unless I am the owner of the 529 account.

[CatinaT1]

You are correct.  You have to be the owner of the account.

[Dieptran]

If i have 529 from vanguard, can i still deduct the contribution for VA state tax? I did a wrong thing if i can’t claim my contribution. Any help would be appreciated! Thanks

[Cynthiad66]

The Virginia State return is where these contributions are  entered. You don't need a 1099-Q to enter your contributions

When you come to this page "Here's the income that Virginia handles differently"

It is under Education "Virginia College Savings Prepaid Tuition (Section 529) Plan"

When it asks if you ever had one and you say NO, you are correct, it will not allow you to enter it. Instead, mark YES.

This is what Virginia says about this deduction:

Virginia529 Account Contributions - If you are under age 70 on or before December 31 of the taxable year, enter the lesser of $4,000 or the amount contributed during the taxable year to each Virginia529 account(Virginia 529 prePAID, Virginia 529 inVEST, CollegeAmerica, CollegeWealth). If you contributed more than $4,000 per account during the taxable year, you may carry forward any undeducted amounts until the contribution has been fully deducted. However, if you are age 70 or older on or before December 31 of the taxable year, you may deduct the entire amount contributed during the taxable year. Only the owner of record for an account may claim a deduction for contributions made.

Your contribution isn’t tax-deductible on your federal return, but two-thirds of the states do offer an income-tax deduction for contributions. Most require that you contribute to your own state’s plan to get the break (Arizona, Kansas, Maine, Missouri and Pennsylvania allow deductions for contributions to any state’s plan). But each state also has different rules about who can take the deduction for their contributions.

Many states, such as Ohio, let residents deduct their 529 contributions to the state’s plans even if they are not the account owner. If you live in Ohio and your niece’s parents already have an account for her in that state, for example, you can deduct up to $2,000 you contribute to her account per year (whether filing as single or jointly), and you can apply any contributions above that limit to future years’ taxes. If your niece’s parents don’t have an account for her in your state, you can open one for her yourself. There’s no limit to the number of 529 accounts that people can have for one student, and the accounts don’t need to be in the state where the student lives.

If your state is one of those states that has a 529 plan deduction, TurboTax will prompt you to enter your 529 contributions when you get to the credits/deductions portion of your state tax interview.

Use this link to go to Virginia Dept of Revenue:  Virginia Tax Deductions