I entered my 2023 Iowa state 529 contribution in the adjustments to income section and my refund decreased. It should increase the refund not decrease it.

[Anonymous_]

I'll page @Hal_Al 

[Hal_Al · Accepted solution]

Be sure you entered it correctly. For, Iowa, you enter at the "Do You Have Any Personal Adjustments?" screen. Select Yes at the bottom and the next page will have a field to enter College Savings Iowa, up to $3785 per Beneficiary (2023) $4028 for 2024).

Don't go by the "Refund Meter" at the top of your screen.  It's not always accurate as you go along.  At the end, check your actual forms for see if the deduction was applied. 

[Pbrinkheide]

It was entered correctly, but I was going by the refund meter at the top of the screen.  Might want to correct the refund meter.

[LRICK]

I'm having the same problem with the Iowa 529 contributions. When I enter the contribution amount it says I owe additional taxes but it should be the other way. I thought based on another comment it was an error in the refund meter at the top shown at the top of  page but when  I did the review it still showed taxes due on the  529 contributions.

[Pbrinkheide]

turbo tax has not fixed this yet for some reason.  it's holding me up from filing my return.  when I add my 529 contribution it adds the contribution as income rather than showing it as a deduction.  sincerely hope they fix this soon.

[SteamTrain]

Others are having the same problem....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.

_________

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.

[CGoodson82]

So glad I found this thread I’m having the same problem!!

[CGoodson82]

Same problem here!!

[SteamTrain]

Yep..,,the majority of IA forms are now slated to be ready AFTER 31 January  (i.e...don't bother until 1 Feb)

Some still remain at 8 Feb, but I don't know  whether yours needs those 8 Feb forms.

[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.

@Pbrinkheide 

@LRICK 

@CGoodson82