Level 1

Do 529 contributions reduce tax liability of non-resident NY taxpayers?

Forum|Forum|2 years ago
September 12, 2023
2 replies
4 views

529 Plan contributions are delt with in Line 29 – Other subtractions of Form IT-203. The instructions say to include up to $5,000 for an individual, or up to $10,000 for married joint return, in the Federal amount column only.

What are the practical effects of adding 5k or 10k to the Federal column? Is the taxpayer better off using a 529 plan in their residential state (let say NJ or CT)?

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sjrcpa

Level 15

I don't know of any states that give a tax break for nonresident state 529 Plan contributions.

The more I know the more I don’t know.

T

TaxGuyBill

Level 15

@sjrcpa wrote:

I don't know of any states that give a tax break for nonresident state 529 Plan contributions.

Interesting. I don't do many non-Minnesota tax returns, so I didn't realize that most states require an in-state 529 plan.

Minnesota allows a credit or deduction for a 529 plan administered by any state.

sjrcpa

Level 15

So now I know of one state.

thanks.

The more I know the more I don’t know.

C

christopher2

Level 2

Contributions made to the NY State 529 plan are deductible on the NY return as you state in the federal column only.

NJ does have a deduction that began in 2022 ($2,500 or $10,000 not sure off the top of my head) for contributions to the NJ BEST 529 plan if income is less than $200k.

CT does have a deduction for contributions to their CHET 529 plan, not sure the amount off the top of my head.

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