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New Member
posted Feb 15, 2025 4:44:58 PM

why does my 529 plan contributions hurt my state refund amount

When I enter my 529 plan contributions of $7,500 my state refund decreases by $400 instead of increasing by $1,500. In years past it has always increased by the credit amount.

0 4 1469
4 Replies
Expert Alumni
Feb 15, 2025 5:02:41 PM

To clarify, which state?

New Member
Feb 15, 2025 5:38:30 PM

Indiana.  Years prior when the max was $5,000 i would always get the 20% or $1,000 added to my state return.  This year when I entered it not only did it not increase my return but hurt it.  Did this last year as well.  Ever since the max contribution has increased to $7500

New Member
Feb 15, 2025 5:40:45 PM

The way I see it is the last 2 years I have been screwed out of $3,000. Or $1,500 a year not including what it deducted from my return.  

Expert Alumni
Feb 16, 2025 5:28:52 AM

To take a closer look at the situation, it would be very helpful to have a diagnostic copy of your tax file.  The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  

 

If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using in a follow-up thread.  If you can provide a screen shot of the token number, that will prevent the number from being redacted automatically when the system thinks it is a phone number.

 

Use these steps if you are using TurboTax Online:

 

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@dunstar20