Tuition reimbursement through a 529 and Virginia tax benefit in the same year

[Anonymous]

If I made a contribution through a 529 for my daughter but moved the funds to my son and then used those funds to reimburse myself for paying tuition, do I still get the deduction in Virginia?

[Anonymous]

The Virginia tax deduction is on contributions to a 529.

Virginia doesn't care how you spend the contribution.

[Anonymous]

That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

[Anonymous]

Anonymous wrote:That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

Huh? I thought you just take the tax deduction in the year you make the contribution, regardless of when you spend the money.

[Anonymous]

Anonymous wrote:That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

Can you site a source for that?

[Anonymous]

I think you can make a deduction no matter what you withdraw.

[Anonymous]

Anonymous wrote:That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

Umm, you are completely wrong.

[Anonymous]

Anonymous wrote:That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

You are wrong, I have done this.

[Anonymous]

Anonymous wrote:The Virginia tax deduction is on contributions to a 529.

Virginia doesn't care how you spend the contribution.

You shouldn’t listen to those person. Many states require you hold it in the account for a year, or some other timeframe to get a legal deduction.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The Virginia tax deduction is on contributions to a 529.

Virginia doesn't care how you spend the contribution.

You shouldn’t listen to those person. Many states require you hold it in the account for a year, or some other timeframe to get a legal deduction.

Not a Virginia resident, so have not researched this. Can you cite the relevant restrictions in Virginia? In DC the only way a deduction can be recaptured is if you make a non-qualified withdrawal or make a rollover to another state 529 within the first 2 years of opening the account. After that period is over, there is no deduction recapture possible.

https://www.dccollegesavings.com/home/about/tax-benefits.html

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The Virginia tax deduction is on contributions to a 529.

Virginia doesn't care how you spend the contribution.

You shouldn’t listen to those person. Many states require you hold it in the account for a year, or some other timeframe to get a legal deduction.

Not a Virginia resident, so have not researched this. Can you cite the relevant restrictions in Virginia? In DC the only way a deduction can be recaptured is if you make a non-qualified withdrawal or make a rollover to another state 529 within the first 2 years of opening the account. After that period is over, there is no deduction recapture possible.

https://www.dccollegesavings.com/home/about/tax-benefits.html

Here is the relevant VA Code:

https://law.lis.virginia.gov/vacode/title58.1/chapter3/section58.1-322.03/

7a:

"...any deduction taken hereunder shall be subject to recapture in the taxable year or years in which distributions or refunds are made for any reason other than (i) to pay qualified higher education expenses, as defined in § 529 of the Internal Revenue Code or (ii) the beneficiary's death, disability, or receipt of a scholarship. "

So you are subject to recapture if you use the money for non-qualified expenses, that's it. No time requirements that I can see. If you use the money for qualified higher education expenses, you won't get recaptured.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The Virginia tax deduction is on contributions to a 529.

Virginia doesn't care how you spend the contribution.

You shouldn’t listen to those person. Many states require you hold it in the account for a year, or some other timeframe to get a legal deduction.

"Many states" might be true but not for Virginia.

Just shut up, you have no idea what you are talking about.

[Anonymous]

Anonymous wrote:That's not true. Once you start using the money for tuition and educational expenses, you cannot take the VA tax deduction on the contributions.

Done that, done that. For several years. No issues.

[Anonymous]

Not true. You are allowed to do the same year in Va. There is nothing in state law that prohibits doing this.