Why on my Indiana State Form IT-40 is my 7500 contribution to the College Choice 529 only showing a credit of 1223 and not 1500?

[JohnW152]

Your 529 Education Savings Plan Credit can only offset tax that you owe. 

So, if you're eligible for the maximum $1,500 credit but only owe $1,223 in tax, only $1,223 will be allowed.

See Schedule IN-529, Schedule IN-529: Indiana’s CollegeChoice 529 Education Savings Plan Credit, available at 2023 Individual Income Tax Forms, and Tax Credit FAQ for more information.

[playinchess]

Was some of your 2023 contribution actually made in 2024? Beginning with tax year 2023, it is allowed to claim a credit for contributions made in the current year (i.e. 2024) and attributed to the tax year (i.e. 2023).

When I used Turbotax to prepare a return, it relied on this to get to a tax credit of 1,500.  But the Indiana dept of revenue disallowed the amount paid in 2024.  Possibly the Indiana DOR hasn't updated its systems to reflect the new nuance.  Or maybe they are integrated with College Choice Direct, who's website states this regarding attributing a current year contribution to the prior tax year:

"ELECTRONIC CONTRIBUTIONS: If you make a contribution online by Tax Day, you must first make the contribution. It will default to the current contribution year of 2024. Once your contribution posts to your account (typically 3 business days), you must call Client Services at [phone number removed] and request that your contribution year be changed to 2023. Your contribution must be received in good order before it can be updated."

[AmyC]

You are correct that IN made those changes and you need to reply to IN that they are incorrect and show them why they are wrong.  See Indiana 529 Education Savings Plan Credit. They owe you the credit. Best wishes!

@playinchess