Question

Why so little tax saving from 529 contributions?

Forum|Forum|2 years ago
March 15, 2024
1 reply
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I work in NY, reside in NJ, and contribute the maximum $10,000 deductible amount to a NYS 529 plan. My NYS tax bracket is 6.85%. After entering the 529 contributions in TurboTax my tax due to NYS decreased by only ~$50. That's 10x less than what I'd expect. I'm trying to understand why this is the case. Maybe I'm not doing it right in TurboTax? Is there some limitation with deducting 529 contributions when you live in another state? Would I be better off having a NJ 529?

KrisD15

Look at your Form IT-203 Non-resident New York return line 29 and Form IT-225 for the deduction.

For TurboTax Desktop, switch to Forms (top right)

To View using TurboTax Online:
Select Tax Tools on the left side-bar
Select Tools from that drop-down
Select “View Tax Summary” on the TOOLS CENTER screen
Select “Preview my 1040” which now appears on the left side-bar

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