How do I rollover a 529 plan to an ABLE account?



How do I rollover a 529 plan to an ABLE account?

IRS encourages the 529 plan designated beneficiary, in the case of a rollover, or the 529 plan, in the case of a direct transfer, to contact the qualified ABLE program before contributing any funds to the ABLE account to ensure that the Code Sec. 529A (b) (2) (B) (i) limit will not be exceeded.

Can 529 plan administrators determine the earnings portion of the recontribution?

Because the amount is refunded by the eligible educational institution, which will have no information regarding the income portion of each tuition payment (whether made from a single or multiple 529 plans), 529 plan administrators generally would be unable to determine the earnings portion of the recontribution.

What happens to a 529 plan when you get a refund?

If the beneficiary or account owner of a 529 plan receives a refund of qualified higher education expenses from the college or university that were paid for with a 529 plan distribution, the refund can be recontributed to the 529 plan within 60 days of the date of the refund without having to pay any taxes and penalties on the distribution.

What is a 529 (c) (3)?

These programs are collectively referred to as 529 plans. Code Sec. 529 (c) (3) provides that distributions (including any attributable earnings) from a 529 plan are not included in gross income if such distributions do not exceed the designated beneficiary’s QHEEs.