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Account Updates

529 Plans, Distributions and your Tax Return


Tax season is officially underway, and individuals are preparing their financial records to get tax returns ready. Here are some factors to consider --- and to discuss with a tax professional--- when preparing your tax return:


If you had a distribution from your Virginia529 account(s) during 2019, a 1099-Q form was mailed for tax purposes.

If a distribution was made payable to an account owner, a 1099-Q was mailed to the account owner and is available via secure online access at Simply log in to your account, locate the “View My Account” tab, and select “1099-Q(s)” from the dropdown. Pursuant to IRS regulations, if a distribution was made directly to a beneficiary, to a K-12 school or eligible educational institution, the beneficiary will receive the Form 1099-Q in the mail. Beneficiaries can set up their own secure login at only to view their 1099-Q online.


Reporting 1099-Q Amounts on Your Tax Return

Virginia529 is required to report distributions to the IRS with Form 1099-Q.  If the distribution(s) taken on your account did not exceed the total amount of 2019 qualified higher education expenses incurred, you should not need to report the distribution(s) on your tax return.  If, however, the distribution(s) exceeded your total qualified higher education expenses, consult a tax professional for more information as you may have income tax consequences.


Reporting Contributions on Your Tax Return

Virginia529 account owners who are Virginia taxpayers may deduct contributions up to $4,000 per account per year with an unlimited carryforward to future tax years, subject to certain restrictions. Those account owners who are Virginia taxpayers age 70 and above may deduct the entire amount contributed to their Virginia529 account in one year.  In addition, contributions to Virginia529 accounts are treated as a completed gift by the account owner to the beneficiary. This means contributions up to $15,000 a year, or up to $30,000 if married, may be gift tax free. You should consult your tax advisor regarding the specific tax consequences of contributions.


Review the 2019 IRS Form 1099-Q Fact Sheet Virginia529 account secure log-in

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Resources to help you learn

Virginia529 offers free, in-person information sessions at locations across Virginia. These hour-long sessions highlight the program’s three plans, explain the benefits to account owners and give you the chance to get your questions answered. If you don’t live near one of our in-person sessions, Virginia529 offers online webinars where you can learn more from the comfort of your own home.