Contribution Deduction.
You may deduct purchases of tuition units and contributions to the Ohio Tuition Trust Authority's CollegeAdvantage 529 Savings Plan, up to $2,000 per beneficiary per year if these amounts do not qualify as a deduction on page 1 of IRS form 1040. Qualifying purchases exceeding the $2,000 limitation may be deducted on future years' returns, subject to the annual $2,000-per-benefciary limitation, until all unused portions are deducted.
Married taxpayers may deduct up to a maximum of $2,000 per beneficiary whether their filing status is married filing jointly or married filing separately.
Adjustment for Earnings on Certain Distributions.
The earnings portion of distributions from Internal Revenue Code section 529 programs can generally be excluded from federal adjusted gross income if the distribution is used solely to fund qualified higher-education expenses. If the earnings portion of a 2013 distribution from Ohio's CollegeAdvantage program is excluded from federal adjusted gross income (line 1 on this return), then no further adjustment is allowed on line 44a.
For federal income tax purposes, however, there are certain situations where, due to the coordination of benefits from an Internal Revenue code 529 program with other federal tax benefits for higher-education expenses (such as the federal American Opportunity Credit), the earnings on a distribution from the College Advantage program that are actually used to pay qualified higher-education expenses cannot be excluded from federal adjusted gross income. If any portion of the earnings reported to you on your 2013 IRS form 1099-Q from the College Advantage program is used to pay qualified higher-education expenses, and if because of certain federal tax limitations such earnings are not excluded from your federal adjusted gross income, you can exclude such portion by adding it to the total included on line 44a.
Adjustment for Distributions at a Loss.
If a distribution reported to you on IRS form 1099-Q reflects a loss (the earnings in box 2 is negative), you can add this loss to your total on line 44a as a positive number if this loss is not deducted in computing federal adjusted gross income (line 1 on Ohio form IT 1040). CollegeAdvantage is an Internal Revenue Code 529-qualified tuition program administered by the Ohio Tuition Trust Authority.
For more information, please call 1-800-AFFORD-IT (1-800-233-6734) or visit the tuition trust Web site at www.collegeadvantage.com.