Virginia rules grandparent cannot deduct 529 contributions

The Virginia Tax Commissioner denied a grandparent a state income tax deduction for payments he made to prepaid tuition contracts owned by his daughter-in-law (the beneficiaries' mother). The Commissioner cited Virginia law and the VPEP program materials in determining that the deduction cannot be claimed by a contributor who is not also the owner. Interestingly, the Commissioner indicated that the account owner could claim the deduction even when she had not made the contribution. Ruling of Commissioner, P.D. 05-123.
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