Hi,
I'm moving later this month from Washington, DC to New York City. In past years, my wife and I contributed a combined $8,000 to our kids' 529 plans and took the state tax deduction every year.
For this year, can we contribute $8,000 to the DC plan AND $10,000 to the New York plan and deduct the $8,000 from DC and $10,000 from our New York State taxes? Do we need to do anything to make the DC contribution before we move or anything like that?
Anyway, just want to make sure I'm not missing out on an opportunity to double-up this deduction for our move year.
Thanks
DC's only requirement is that, in order to take the deduction, the taxpayer/account-owner must file a DC tax return. Since you'll have to file a part-year resident DC tax return for the year of your move, you should be OK taking the 529 deduction in DC.
https://code.dccouncil.gov/us/dc/council/code/sections/47-4509
NY's law is this:
Contributions of up to $10,000 are deductible annually from New York State taxable income for married couples filing jointly; single taxpayers can deduct up to $5,000 annually. New York State tax deductions may be subject to recapture in certain circumstances such as rollovers to another state's 529 plan, nonqualified withdrawals, or withdrawals used to pay elementary or secondary school tuition, or qualified education loan repayments as described in the Disclosure Booklet and Tuition Savings Agreement. State tax benefits for non-resident New York taxpayers may vary.
So I believe that your NY 529 contributions would qualify for the NY tax deduction, as long as you make the contribution after you establish your residency in NY. All your income after becoming a New York resident is "New York State taxable income."
I could not find any "part-year resident" restrictions in either jurisdiction's online publications.