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February 16, 2025
Question

529 Withdrawals Not Used for College - How to Report for State Tax

  • February 16, 2025
  • 1 reply
  • 0 views

Taxpayer lived in NJ from Jan to Sept then moved to PA from Oct to Dec.  They took out $5,000 from a 529 plan in March.  Since PA is shown as the current state of residence, how do I show that the distribution is taxable to NJ and not to PA?  There doesn't seem to be a way to enter the date the distribution was received so that the program knows it was received during the NJ resident period.

    1 reply

    AmyC
    Employee
    February 17, 2025

    Since you are filing part year resident returns for each state, you will indicate which amounts were taxable in each state. Mark the $5,000 as NJ income and be sure it is subtracted from the PA income.

    The two states will compare and it will be clear that all income is accounted for between the states.

     

    Be sure to choose part year, be sure to fill in the boxes when asked about income.

     

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