Why doesn't turbotax calc $1k credit when I paid $5000 into Indiana 529? I currently owe $509 taxes due. when I enter the 529 my amount due only goes down to $491

The maximum amount of credit a taxpayer can receive for college choice contributions is $1,000 (20% of $5,000). However, the amount of credit received is limited to the lesser of:

1. 20% of the amount of all contributions made to all Indiana College Choice 529 plans.
2. The amount of the taxpayer's adjusted gross income tax liability for the tax year. (This does not include your county tax liability.)
3. $1,000

Your credit is being limited to the amount of your state tax liability. Please view the college choice 529 bulletin page for more information about this rule.

I also had the same problem.  I entered my $3000 in contributions to my 529 plan and I still owed Indiana the same amount.  Nothing changes with or without the 529 contribution.  I am still not understanding this even after reading the article. 

Are we limited to #3 only $1000 can be credited to us (total state credits) ?

It needs to be made to the Indiana CollegeChoice 529 Education Savings Plan.

The credit is 20% of your contribution. 

The credit will lower your Indiana Adjusted Gross Income on IT-40 line 7. 

It is possible that the adjustment would have no affect on the bottom line if your state tax is zeroed out but county or number of other tax is added after.