529 Plan contribution – 5 year
If you made a $65k contribution to a 529 plan this year with the intention of spreading the contribution over five years to avoid paying gift taxes (assuming no other gifts are made); would the donor be eligible for a state income tax deduction for each of the next five years or can they only take the deduction for the year they made the contribution? I have researched a number of sites, but I’m not clear on the answer. Thank you.
Permalink Submitted by Alan Spross on Wed, 2011-12-21 20:49
Unless the state tax form says otherwise, a contribution of 65k was made in the current year and not considered spread over 5. Gift tax rules are totally separate from income tax rules, particularly state income taxes.