Idaho Form ID-529 - Credit for Employer Contributions to Employee ID College Savings Account

Idaho Form ID-529 - Credit for Employer Contributions to Employee Idaho College Savings Account

Form ID-529 allows employers in Idaho to claim a tax credit for contributions made directly to an employee’s 529 qualified state tuition program account. This credit is designed to support employee education savings and is available to employers who contribute to Idaho’s college savings program.

Key Features of the Credit

• Credit Amount: Employers can claim a credit equal to 20% of the total contribution made per employee, up to a maximum of $500 per employee.
• Nonrefundable Credit: The credit is nonrefundable but may be carried forward for up to five tax years if not fully utilized in the current year.
• Eligible Contributions: Only direct employer contributions to an employee’s Idaho 529 account qualify for this credit.

How to Claim the Credit

To claim the credit, employers must complete Form ID-529 and attach it to their Idaho state tax return. The form includes sections for:

• Employee information (last name, first name, middle initial, SSN or ITIN)
• Filing period and amount of contribution
• Calculated tax credit (20% of contribution, capped at $500)

Limitations and Order of Application

The ID-529 credit is subject to limitations and must be applied after other specified credits. The following credits must be applied before the ID-529 credit:

• Credit for income tax paid to other states
• Part-year resident food tax credit
• Credit for contributions to Idaho educational entities
• Investment tax credit

The total credit allowed is the lesser of the total credit available or the remaining tax liability after applying other credits.

Credit Carryover

Any unused portion of the credit may be carried forward for up to five tax years. The carryover amount is reported on Form 44, Part I, line 9.

Pass-Through Entities

For S corporations, partnerships, trusts, or estates, the credit may be passed through to shareholders, partners, or beneficiaries. The amount passed through is reported on Form ID K-1, Part VII, line 45 or Part XI, line 69.

Using OLT (Online Taxes) Software

OLT (Online Taxes) software can guide users through adding Form ID-529 while filing their Idaho state tax return. To add the form:

1. From within your tax return, click on "State" in the left menu (or tap the three dots on mobile).
2. Select "Start or Revisit Idaho state."
3. Under the "Credits" section, click "Start or Revisit" next to "Credit for Employer Contributions to Employee Idaho College Savings Account (Form ID-529)."
4. Follow the on-screen instructions.

Source:

Form ID-529 - Credit for Employer Contributions to Employee Idaho College Savings Account

Disclaimer: Always verify details with official forms and instructions from the Idaho State Tax Commission or your local Department of Revenue.