Author Topic: 529 state tax question  (Read 1244 times)

Gin1984

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529 state tax question
« on: August 07, 2015, 12:08:47 PM »
I was reading about the state deduction for 529s which NY says is subject to recapture if you roll it out.  However, is there anything that stops me from opening the 529, getting the deduction and leaving it there when I move out of NY state?  I would avoid the recapture right?  Am I missing something?

catccc

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Re: 529 state tax question
« Reply #1 on: August 07, 2015, 12:19:50 PM »
possibly a stupid question, but what do you mean by roll it out?  Take funds out for non-qualified expenses?

Gin1984

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Re: 529 state tax question
« Reply #2 on: August 07, 2015, 12:20:53 PM »
possibly a stupid question, but what do you mean by roll it out?  Take funds out for non-qualified expenses?
Roll it in to whatever next state's 529 we live in.

catccc

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Re: 529 state tax question
« Reply #3 on: August 07, 2015, 12:22:10 PM »
I'm pretty sure you can just leave it there.  I have a NY 529 and I live in PA.  I've always lived in PA, but I don't think your state of residence matters in terms of starting or continuing to hold the 529.  And as far as I know that would avoid recapture.  You'd just have to deal with the issue of managing multiple accounts if you wanted to open up a 529 in your new state.  (Or if you move to PA, you can continue to contribute to the NY plan- you can deduct contributions to any state's 529 in PA.  But there's not 401K contribution deduction at the state level, which stinks.)
« Last Edit: August 07, 2015, 12:50:44 PM by catccc »

thingamabobs

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Re: 529 state tax question
« Reply #4 on: August 07, 2015, 01:51:29 PM »
I started one in NY and then moved to a state where we don't get any deduction for contributing to a 529 so I just keep contributing to the NY one.