Frequently Asked Questions

Named after Section 529 Close X Section 529:  Section 529 of the Internal Revenue Code specifies the requirements for qualified tuition programs (529 Plans). of the Internal Revenue Code, state-sponsored 529 plan Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. are investment plans that receive special tax benefits. Also referred to as qualified tuition programs, 529 plans are specifically designed to help families—regardless of income level—save for college expenses such as tuition, books, and room and board. Investments grow tax deferred, and qualified withdrawals Close X Qualified Withdrawals:  A distribution from an Account that is used to pay for Qualified Higher Education Expenses for the Beneficiary at an Eligible Educational Institution. These withdrawals are tax free when used to cover expenses such as tuition, room and board, books, supplies, and other equipment intended for college use. are federal tax free.

All U.S. citizens and permanent resident aliens 18 years of age or older. There are no income or state residency restrictions. Accounts Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. can also be established by a corporation, partnership or trust; a state or local government, or tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code; or a custodian under a UGMA/UTMA account.

Any U.S. resident. For instance, you can set up an account Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. for your child, grandchild, spouse or someone who is not related to you. If you are planning to attend college or graduate school, you can open an account for yourself.

A government entity or 501(c)(3) not-for-profit organization can establish an Account Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. to fund scholarship programs without designating a Beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. at the time the Account is established.

The Texas College Savings Plan is open to all U.S. citizens or permanent resident aliens 18 years of age or older, with a valid social security number, without any state residency restrictions.

No. The money can be used at any accredited public or private post-secondary institution in the United States and abroad. This includes most two-year and four-year colleges and universities, vocational and technical schools, graduate schools, professional, medical and law schools. With certain restrictions, the money can also be used for K-12 tuition, registered apprenticeship programs and student loan repayment.

Recent tax reform legislation changes allowing for payment of K-12 tuition were on a federal level, and the tax consequences of using 529 plan Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. for elementary or secondary education tuition expenses will vary depending on state law and may include recapture of tax deductions received from the original state as well as penalties. The Account Owner Close X Account Owner:  The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity. should consult with a tax or legal advisor before using the plan Close X Plan:  The Texas College Savings Plan, which is a 529 plan. for K-12 tuition.

Many states offer similar college savings programs. You should compare the benefits carefully before choosing a plan. Keep in mind that many plans offer additional state tax or other benefits only to residents of the state offering the plan.

Most schools assigned a federal school code by the Department of Education are eligible. We suggest you perform a Federal School Code search and confirm with the school.

Section 529 Close X Section 529:  Section 529 of the Internal Revenue Code specifies the requirements for qualified tuition programs (529 Plans). of the Internal Revenue Code defines “qualified higher education expenses” as tuition, fees, books, supplies, and equipment required for a beneficiary’s Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. enrollment or attendance at an Eligible Educational Institution. Close X Eligible Educational Institution:  Accredited post-secondary educational institution offering credit toward a bachelor's degree, an associate's degree, a graduate-level or professional degree, or another recognized post-secondary credential that is eligible to participate in certain federal student financial aid programs. Certain proprietary institutions, foreign institutions, and post‑secondary vocational institutions are also included, as are certain specified military academies. The term includes computers and peripherals, software (except for non-educational sports, games, or hobby software), and internet service, provided they are used primarily by the beneficiary while enrolled at an eligible educational institution. Expenses for special needs services incurred in connection with enrollment or attendance at an eligible educational institution are also included in the definition.

For beneficiaries who are enrolled at least half-time at an Eligible Educational Institution, Close X Eligible Educational Institution:  Accredited post-secondary educational institution offering credit toward a bachelor's degree, an associate's degree, a graduate-level or professional degree, or another recognized post-secondary credential that is eligible to participate in certain federal student financial aid programs. Certain proprietary institutions, foreign institutions, and post‑secondary vocational institutions are also included, as are certain specified military academies. qualified higher education expenses include reasonable room and board. The amount of room and board cannot exceed the greater of: (1) the allowance included in the “cost of attendance,” as defined under federal law, as determined by the eligible educational institution for the period; or (2) the actual invoice amount charged to the beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. for room and board, if the beneficiary resides in housing owned or operated by the eligible educational institution.

The following expenses are also treated as qualified higher education expenses under Code Close X Code, or IRC:  The Internal Revenue Code of 1986, as amended. §529:

• Up to $10,000 per year of your beneficiary’s Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.
  
  A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. K-12 tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school;
• Fees, books, supplies, and equipment necessary to participate in a registered apprenticeship program; and
• Up to $10,000 in amounts paid as principal or interest on any qualified education loan (as defined in Code Close X Code, or IRC:  The Internal Revenue Code of 1986, as amended. §221(d)) of the beneficiary or a sibling of the beneficiary (“qualified student loan repayments”). Note that the state tax consequences of using 529 plans Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. for K-12 tuition will vary by state and may involve taxes, penalties, and the recapture of tax deductions.

Recent tax reform legislation changes allowing for payment of K-12 tuition were on a federal level, and the tax consequences of using 529 plan Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. for elementary or secondary education tuition expenses will vary depending on state law and may include recapture of tax deductions received from the original state as well as penalties. The Account Owner Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. should consult with a tax or legal advisor before using the plan Close X Plan:  The Texas College Savings Plan, which is a 529 plan. for K-12 tuition.

Whether your account Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. will affect your beneficiary’s Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. eligibility for federal financial aid depends on the beneficiary’s relationship to the purchaser. Information about how 529 plans Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. are treated on the FAFSA can be found at Savingforcollege.com. Texas law provides that assets in your account may not be considered in determining eligibility for Texas-sponsored student financial aid. For school-based financial aid, the effect of being an  account owner Close X Account Owner:  The individual or entity signing the Application and establishing an Account or any successor to such individual or entity. References in this Glossary to “you” or “your” mean the Account Owner in such capacity.  or beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. varies from institution to institution. You are advised to consult a financial aid professional and/or the state or educational institution offering a financial aid program to determine the impact of participating in the plan.

If your beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. receives a scholarship for higher education expenses, you can withdraw an amount equal to the value of the scholarship from your account(s) or account. Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. Earnings on the amount you withdraw would be taxed at your tax rate but will not be subject to the additional 10% federal tax.

As the account owner, Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. you always have control of your withdrawals. If the beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. chooses not to attend college, you have three options:

Keep the funds in the account. Close X Account:  A savings trust account established by an Account Owner pursuant to the Savings Trust Agreement for purposes of investing in one or more portfolios. Accounts are part of the Plan and are held in the name of the Plan on behalf of and for the benefit of the Account Owners and the Beneficiaries. Since there are no age restrictions on the investments, they will be available in future years if the beneficiary changes his or her mind about school.

Change the beneficiary. Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. You can change your beneficiary at any time without tax implications, provided that your new beneficiary is a qualified family member. You should consult your tax advisor to determine whether this may create a taxable gift.

Make a nonqualified withdrawal. Earnings will be subject to federal income taxes and any applicable state tax, as well as an additional 10% federal penalty unless you qualify for an exception to the penalty.

Coverdell Education Savings Accounts offer similar tax advantages, but contributions are limited to $2,000 per year which may not be sufficient to adequately fund a college education. In addition, Coverdell accounts restrict who can contribute based on income levels.

You may view Recent Total Returns, Annual Average Returns or Prices.

Should your goals or needs change, you have the flexibility to rebalance your existing investment options twice per calendar year to different portfolios available within the Program. See the Plan Description and Savings Trust Agreement for details.

Yes. You must first redeem your current UGMA/UTMA account. 529 accounts opened with assets from a UGMA/UTMA account are subject to additional restrictions. Please see the Plan Description and Savings Trust Agreement for more details.

Yes, the IRS allows a tax free rollover Close X Rollover:  A transfer of funds from one qualified 529 Plan account to another qualified 529 Plan account. If the transfer is completed within 60 days and is made to an account for the same Beneficiary or a Member of the Family, the rollover may be considered a tax-free transaction. Please see the Plan Description for specific situations. Funds in a qualified 529 plan account may also be rolled over to a qualified ABLE program account tax free before January 1, 2026, provided certain conditions are met. from a 529 account to another 529 account of the same beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. or a Member of the Family of the beneficiary if these requirements are satisfied:

• The rollover must occur within 60 days of the distribution;
• Only one rollover from a 529 plan to another 529 plan per twelve-month period for the same beneficiary is allowed. This restriction does not apply to a member of family of the beneficiary.

For further details on rollovers from a 529 plan Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. to another 529 plan account, see the Plan Description and Savings Trust Agreement. Complete our Rollover Form.

Yes, the IRS allows a tax free rollover Close X Rollover:  A transfer of funds from one qualified 529 Plan account to another qualified 529 Plan account. If the transfer is completed within 60 days and is made to an account for the same Beneficiary or a Member of the Family, the rollover may be considered a tax-free transaction. Please see the Plan Description for specific situations. Funds in a qualified 529 plan account may also be rolled over to a qualified ABLE program account tax free before January 1, 2026, provided certain conditions are met. from a 529 account made after December 22, 2017 and before January 1, 2026 to an ABLE account of the designated beneficiary Close X Beneficiary:  The individual identified by the Account Owner whose Qualified Higher Education Expenses are expected to be paid from the Account or, for Accounts owned by a state or local government or qualifying tax-exempt organization (otherwise known as a 501(c)(3) entity) as part of its operation of a scholarship program, the recipient of a scholarship whose Qualified Higher Education Expenses are expected to be paid from the Account. Any individual may be the Beneficiary of an Account, including the Account Owner.

A government entity or 501(c)(3) not-for-profit organization can establish an Account to fund scholarship programs without designating a Beneficiary at the time the Account is established. of that 529 account or of a member of the family of that designated beneficiary if these requirements are satisfied:

• The rollover must occur within 60 days of the distribution and
• The rollover amount when added with all other ABLE contributions for the taxable year that are subject to the annual gift tax exclusion must not exceed that limit. For 2023, the annual gift tax exclusion is $18,000 per year for single filers ($36,000 if married filing jointly).

For further details on rollovers from a 529 plan Close X 529 Plan:  A 529 plan is an education savings plan operated by a state or an educational institution and designed to help families set aside funds for college. It is named after Section 529 of the internal revenue code, which authorized these types of tax-advantaged savings plans in 1996. Earnings on 529 plans are tax-free if used for qualified higher education expenses. (Unqualified withdrawals may be taxable as ordinary income and subject to a 10% federal tax penalty.) The Pension Protection Act of 2006 made the tax-free character of 529s a permanent part of federal law. to an ABLE account, see the Plan Description and Savings Trust Agreement. If you are planning on rolling over your Texas College Savings Plan Account to the Texas ABLE Plan, complete our Rollover Form.

Starting January 1, 2024, a 529 plan account owner may roll over amounts from their 529 account to a Roth IRA subject to certain conditions:
(a) the 529 plan account must have been maintained for a beneficiary for at least 15 years prior to the date of the rollover;
(b) the rollover must be made in a trustee-to-trustee transfer from the 529 plan account to an established Roth IRA maintained for the benefit of the same beneficiary as the 529 plan account;
(c) the rollover is subject to the applicable annual IRA contribution limits;
(d) the rollover amount may not exceed the amount of compensation includible in the beneficiary’s gross income for the year or the aggregate amount contributed (including related earnings) to the 529 plan account before the 5-year period ending on the date of the rollover; and
(e) the rollover amount from all of the beneficiary’s 529 plan accounts into a Roth IRA may not exceed $35,000 in total.
Roth IRA income limitations are waived for rollovers from a 529 plan.

An account owner may request a rollover from their 529 plan account to a Roth IRA beginning January 1, 2024.

An account owner may request a rollover from their Texas College Savings Plan account to a Roth IRA by submitting the Texas College Savings Plan Roth IRA Rollover Request Form either by fax to: 402-431-4452 or by mail to: The Texas College Savings Plan, P.O. Box 540010, Omaha, NE 68154.

No. All Roth IRA rollover requests must be submitted via paper. See previous question.

No. A rollover from your Texas College Savings Plan account to a Roth IRA must be trustee-to-trustee, meaning that it must be transferred directly from the Texas College Savings Plan to the Roth IRA trustee/custodian.

A Roth IRA account for the beneficiary of the Texas College Savings Plan account must be established before an account owner requests a rollover from the 529 account. If the Roth IRA trustee/custodian requires a Letter of Acceptance, the owner of the Roth IRA account will need to direct them to send that letter to the Texas College Savings Plan before the Plan can roll over the funds. The request can be sent by fax to: 402-431-4452 or mailed to: Texas College Savings Plan, P.O. Box 540010, Omaha, NE 68154.

Account owners can find information about their account at texascollegesavings.com, by selecting Account Access and either entering the username and password for an existing account, or creating a new login if account access has not been previously established. Account owners can also contact Customer Service from 8am to 6pm CT Monday through Friday, except for holidays, by calling 800-445-4723, option 3.

The IRS has not provided guidance on whether a rollover from one 529 plan account to another 529 plan account resets the 15-year requirement. It is unclear if or when the IRS will provide such guidance.

The IRS has not provided guidance on whether a change of beneficiary resets the 15-year requirement. It is unclear if or when the IRS will provide such guidance.

The IRS has not provided guidance on whether a change of account owner resets the 15-year requirement. It is unclear if or when the IRS will provide such guidance.

The 12-month rule only applies to rollovers from one 529 plan account to another 529 plan account.

The IRS has not provided guidance on how internal transfers (transfer from one account to another account in the same plan) impact the ability to roll over to a Roth IRA. It is unclear if or when the IRS will provide such guidance.

To the extent that this references a beneficiary change, please see “If I changed the beneficiary on my Texas College Savings Plan account, does that reset my 15-year clock?”.

There is no age requirement for the beneficiary, but the Secure 2.0 Act requires that the owner of the Roth IRA account be the same as the beneficiary of the 529 account. Please note that the rollover amount may not exceed the beneficiary’s compensation for the year or the aggregate amount contributed (including related earnings) to the 529 plan account before the 5-year period ending on the date of the rollover.

The IRS has not provided guidance on how it would handle this situation. If the IRS were to treat such an account re-opening as not resetting the 15-year clock, any rollovers would still have to comply with the 5-year requirement described in “Can I roll over funds from my 529 plan account to a Roth IRA?”.

Texas does not have a state income tax, but if you are a non-Texas resident and you previously claimed a credit or deduction on your state’s income tax for contributions to your Texas College Savings Plan account, there might be a tax consequence for requesting a Roth IRA rollover from your account. Please consult with your tax advisor regarding the application of the 529-to-Roth rollover requirements to your personal situation.

If your beneficiary has reached the age of majority, they must sign the form acknowledging the rollover and that they will be responsible for any tax consequences from the transaction (they will receive IRS Form 1099-Q reporting the rollover).

An eligible rollover from a 529 plan account to a Roth IRA for the same beneficiary is free of federal taxes and penalties. However, the U.S. Treasury Department and IRS may issue interpretative guidance in the future that may affect the tax treatment of such rollovers. Please consult with your tax advisor regarding the application of the 529-to-Roth rollover requirements to your personal situation.

The rollover amount from all of the beneficiary’s 529 plan accounts into a Roth IRA may not exceed $35,000 in total.

According to recent updates from the IRS, a rollover from a 529 account made after December 31 of the previous year, that is put into the beneficiary’s Roth IRA by April 15 of the current year, can be designated as a Roth IRA contribution for the previous year. The Roth IRA account owner should indicate the applicable tax year at the time the contribution is made to the Roth IRA account. Consult a tax advisor or financial professional for additional guidance.