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Returning Member
posted Feb 14, 2021 12:44:20 PM

Need assistance on Virginia state taxes, I with drew money form a 529 account for non-qualifing expenses how is it treated on my state taxes? I did in earlier years take a deduction.

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3 Replies
Expert Alumni
Feb 14, 2021 1:49:54 PM

Because you took the deduction and did not use the distribution for qualified educational expenses, you will have to report the amount.  In TurboTax, in the Virginia state tax return section, you will see the adjustment under Virginia 529 or ABLEnow Distribution or Refund.

Returning Member
Feb 14, 2021 2:34:56 PM

In that section it tells me of the amount of the refund from my federal return. I check none of the above since they do not apply to exclude this from my income. Is there any were else I have to report the amount refunded that did not get taxed by the federal goverment but I took prevois virginia state decutions on? 

Expert Alumni
Feb 18, 2021 1:49:32 PM

No, previous years do not come into play. The VA return begins with the federal AGI. If the distribution was not used for education, it would also be taxable in the federal.