Virginia 529 Plan Contribution

[NSNM]

A Virginia Full Year resident taxpayers (H & W) with two dependent children contributed $2000 each
to 4 separate Collegewealth 529 Savings account, 2 by husband and 2 by wife for each of the children.

How much are they allowed to deduct on their VA-760 Sch ADJ for the year 2012 ?

T/P claims he can deduct $8000.

My ATX software program, which has $ entry, deducts only $4000 for 2012 and carries over $4000
to next year. And it does not ask for number of account or contract.

Instruction says $4000 per account or contract.

What is the correct amount of deduction in this case.

Thanks for any help.

[Burke]

The deduction in VA is only for a VIRGINIA College Savings Plan (529 plan) taken out with this state. If this is some other type of plan purchased through an investment broker or another state, it is not deductible on the Form 760 at all. If it is a VA state-sponsored 529 plan, then you can deduct $4K per child, for a total of $8k, or the amount paid, whichever is less.

The reason I brought up the rule about it being a VA 529 plan is that the eligible state plan is called the Virginia Higher Education Tuition Trust Fund, or the former name which was Virginia College Savings Plan. And your OP said CollegeWealth 529 Savings Account which leads me to believe that it may not qualify.

[Possi]

Client is right

Your client is right, I believe. I read it, and that is how I understand it, too. I tested the data entry in TW, and it was no problem entering the data. That only proves that there must be a way for you to enter it properly and get the full deduction.

[NSNM]

VA 529 deduction passed through

Burke and Possi - Thank you both for the information. It was very helpful.

Burke - I checked "BB&T CollegeWealth 529 Savings Plan" website, and they state
"Virginia taxpayers can receive upto $4000 state tax deduction per year for every
BB&T CollegeWealth 529 Savings account".

Possi - After reading your response, I rechecked and ATX software did allow me
to enter $ amount of deduction, and passed without hitch.

Thanks again.

[Burke]

I did some research on these and find that, indeed, this is one of the four plans approved for the VA 529 Plan now. CollegeWealth is offered by BB&T and Union First Mkt Banks, and the other is CollegeAmerica funds through American Funds. The benefit has been expanded since it was first offered when only the state plans were available, and so your client is correct and he can take the $8K deduction. My apologies.