Hello, I contributed to two separate 529 plans for my Grandchildren several years ago and never took the IRA deduction on my tax return for that year. =======>Your contribution TO 529 PLAN isn’t tax-deductible on your 1040, The money in a 529 plan grows tax-deferred. but 2/3 of the states do offer an income-tax deduction for contributions. But each state also has different rules about who can take the deduction for their contributions.
I will want the Grandchildren to receive the distributions from the plans directly, in that case I hopefully won't receive a 1099. =====>I guess you need to contact plan admin for more accurate info in detail.
My question is, since I did not claim the 529 IRA deductions on my taxes initially years ago, do I have to add the total/current value to my total IRA value amount in figuring my annual distributions ? Hope this makes sense.=======>>No I do not think so as said above; in general, your contributions into the 529 plan are treated as completed gifts from you to the account beneficiaries, your grandchildren, Gifts are subject to a federal gift tax, but you have an annual exclusion of $14K to apply towards each beneficiary before running into taxable territory. (Even if your gifts do go over the annual exclusion amount, you pay the federal gift tax only after you exhaust your $5.45 million lifetime exemption for 2015.) |