Why does altering the DISBURSEMENT amount for a 529 alter the state refund? Shouldn't only the 529 CONTRIBUTION effect the state tax liability? State in question is CT.

crzyjethro · ‎March 14, 2021

Changing the disbursement amount of the 529 on my CT return is changing the refund amount (higher disbursement amounts are creating a larger refund). Why would this be? Only the contributions are deductible. Is this a glitch?

KrisD15 · ‎March 15, 2021

Is the increase in disbursement increasing your income and also increasing an Earned Income Credit?

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crzyjethro · ‎March 17, 2021

It is not, I don't qualify for the EIC on Federal or State.

KrisD15 · ‎March 17, 2021

Are you increasing the disbursement on the 1099-Q screen on the federal return and it is increasing your state refund?

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Why does altering the DISBURSEMENT amount for a 529 alter the state refund? Shouldn't only the 529 CONTRIBUTION effect the state tax liability? State in question is CT.