What are non-education expenditures from college savings accounts?

If you received a distribution during 2014 reported to you on a 2014 Form 1099-Q from the CollegeAdvantage program, and part of your distribution was NOT used to pay for qualified higher education expenses and was NOT due to the beneficiary's death, disability, or receipt of a scholarship, you may need to include part of the distribution in your Ohio income.

If all of the money you withdrew from the College Advantage program account was used for qualified higher education expenses or was withdrawn because of the beneficiary's death, disability, or receipt of a scholarship, don't include it as a non-education expenditure from college savings accounts addback.

Here are the rules for what you do and don't need to include as an addback (these only apply if you are a College Advantage account owner or beneficiary):
  • You don't have to include any amount you used to buy tuition credits or units before January 1, 2000.
  • You need to include the portion of the distribution from your College Advantage 2014 Form 1099-Q that's from original contributions or purchases made that aren't excluded by being purchased before January 1, 2000. This is the nonearnings portion (usually the original contribution or purchase price unless the account has declined in value below these amounts), and it only needs to be included if either the account owner or the beneficiary has taken an Ohio contribution deduction for the contributions or purchases this year or in a prior year.
  • You need to include the earnings portion of the distribution from your 2014 Form 1099-Q that you haven't already included in your Ohio adjusted gross income for either the current taxable year or for any previous years.
Contribution Carryovers: If you're carrying over a contribution deduction to future years, you'll need to reduce the amount you carry over to the extent that your nonearnings distributions (the 2nd list item above) (a) exceed contribution deductions taken in this and prior years and (b) are reflected on your contribution deduction carryover to future years' returns.

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