529 to Roth rollover
I have three children that had 529 plans. When my oldest son completed college, I split the remaining balance of his 529 between his 2 siblings and closed out his 529 account. Years later, he decides he may want to go back to school. I reverse the amount of the funds I originally removed. I could not put them back into his closed account. It’s still visible to me but considered closed. It has a zero balance. I had to create a new 529 account. Does that 15 years timeline for having a 529 plan open for rollover start over?
Permalink Submitted by Alan - IRA critic on Mon, 2025-02-03 14:55
This is one of many complex situations that will require IRS guidance, and that has been slow to come. Questions in this situation include:
Change of 529 account itself
Change of plan beneficiary within the 15 years
Balance for transfer limited to contributions and earnings prior to 5 years from date of rollover
Since pressure on the IRS is mounting, and rollovers are already being done with the risk that some of them may turn out ineligible, I would think the IRS would release guidance fairly soon. Best if you wait until they do to be sure that the rollover will be legal.
Permalink Submitted by Jesus Dominguez on Mon, 2025-02-03 15:22
Thanks for your response.