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Can I contribute to and distribute funds from a 529 plan in the same year
Posted on 5/8/25 at 1:24 pm
Posted on 5/8/25 at 1:24 pm
And still use as a deduction? Any period of time the funds need to stay in to be tax deductible in Louisiana?
Posted on 5/8/25 at 1:57 pm to ChairmanOfThisBoard
I would think so, but It's not much tax savings.
Posted on 5/8/25 at 2:04 pm to tigerrocket
quote:
It's not much tax savings.
Any tax savings would be worth it if you could simply contribute and withdraw in say the same month.
Posted on 5/9/25 at 9:01 pm to ChairmanOfThisBoard
I have done this. My first kid was underfunded so I made the contribution for the fee bill for the semester then turned around and sent it out when it settled in the account. Had no problems with it.
Posted on 5/10/25 at 9:17 am to ChairmanOfThisBoard
Yes, I would think in La. you can both contribute to and withdraw from a 529 plan in the same year and still claim the state tax deduction. I don't see why not.
There shouldn't be any holding period required. You just want to make sure the money is used for real education expenses in the same year.
Looking at Louisiana's START program, it seems that the state deduction is up to $2,400 per student for single filers or $4,800 for joint filers.
Any unused deduction amounts you have you should be able to roll forward to the next year or years.
As long as the money goes toward areas like tuition, fees, or other actual edu costs, you should be good to go.
Of course, from my own advice (I got questioned on some stuff for my son some time ago) keep your receipts and make sure the timing matches.
There shouldn't be any holding period required. You just want to make sure the money is used for real education expenses in the same year.
Looking at Louisiana's START program, it seems that the state deduction is up to $2,400 per student for single filers or $4,800 for joint filers.
Any unused deduction amounts you have you should be able to roll forward to the next year or years.
As long as the money goes toward areas like tuition, fees, or other actual edu costs, you should be good to go.
Of course, from my own advice (I got questioned on some stuff for my son some time ago) keep your receipts and make sure the timing matches.
Posted on 5/11/25 at 9:00 am to ChairmanOfThisBoard
I agree if you are going to spend it on education anyway. You would save $144 in state taxes if you did the maximum contribution.
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