What is a nonqualified distribution?

If you received a distribution from the Missouri Savings for Tuition (MOST) Program, the 529 plan administered by the Missouri Higher Education Deposit Program, or any other qualified 529 plan, but did NOT use it for qualified higher education expenses, we'll need to add the amount back to your (the participant's) federal adjusted gross income.

Early distributions (distributions not held for the minimum time established by the Missouri Higher Education Savings Program board) also need to be added to the participant's federal adjusted gross income. The amount to add back includes contributions you made previously that were exempt from state tax and deductible earnings you generated from the program (if the earnings aren't already included in federal adjusted gross income).

If the participant is deceased, the beneficiary of the savings program must claim the non-qualified taxable distribution as an addition to federal adjusted gross income on their Missouri income tax return.

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