Why does TurboTax request the total of all contributions to a NY 529 College Savings Program for 1998 thru 2020, when NYS tax forms do not request this information?

TurboTax will ask these questions if you made a nonqualified withdrawal in the past, i.e. pulled money out for noneducational purposes. Some of your 529 deduction may be limited under theses circumstances.

Under New York State law, nonqualified withdrawals will require the recapture of any New York State tax benefits that have accrued on contributions. This question will only come up if you had nonqualified withdrawals.

A withdrawal is nonqualified in any of the following situations:

1. The funds are used for purposes other than the higher education of the designated beneficiary.
2. The withdrawal is actually disbursed in cash or in-kind from the qualified state 529 program, even if the amount withdrawn is reinvested in the college savings program within the Internal Revenue Code 60 day rollover period, or
3. On or after January 1, 2003, the funds are transferred from the New York 529 College Savings Program, to another state's program (whether for the same beneficiary or for the benefit of another family member).
4. The withdrawal is used to pay the principal or interest on any qualified education loan [as defined in IRC section 221(d)] of the designated beneficiary or a sibling of the designated beneficiary.
5. The withdrawal is used to pay expenses for fees, books, supplies, and equipment required for the participation of a designated beneficiary in an apprenticeship program.

Related Resource:

• New York 529s Using Your Money