Michigan - MESP education saving program

Forum|Forum|5 years ago
February 22, 2021
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Turbo tax error:

For the Michigan - MESP education saving program contribution, Turbo tax does not calculate the MAX deductible $ amount correctly ($5000 or $10000 depending on filing jointly or not). If one contributes more than these limits, TurboTax assumes the whole contribution is deductible, which is a mistake. Please advise.

Second Turbo Tax error:

Similarly, why would TurboTax deduct MESP withdrawals from income. What is the legal basis for that?

Please confirm these are TurboTax mistakes.

Irene2805

When you enter an amount for the MESP contribution that is greater than the maximum allowable deduction, TurboTax generates an error and asks you to change your entry so that you fall under the $5,000/$10,000 maximum contribution. [See Screenshot #1, below.]

According to the Instructions for the MI-1040 (p.14), line 21 Miscellaneous Subtractions include: "Any portion of a qualified withdrawal from an MESP account, including the MAP, or ABLE account to the extent included in federal AGI."

TurboTax asks you to indicate the amount of withdrawal that was included in your federal AGI. If the amount was not included in your federal AGI (because it was used for education expenses, for example) it should not be entered on this screen. [See Screenshot #2]

Screenshot #1