Section 529 plans are programs used by families to save for qualified higher-education expenses. These plans have no income limitations. They also feature tax advantages and minimal impact on financial aid eligibility. Assets can be merged from one 529 plan to another in a process known as a rollover.
Is Changing 529 ownership a gift?
Even though you would then have complete control over the money — including the ability to take non-qualified withdrawals for things completely unrelated to your daughter’s college education — transferring the ownership of the 529 account should not be considered a “gift.”
How to roll over funds from one 529 plan to another?
1 You are permitted only one rollover to another 529 plan per twelve-month period for the same beneficiary. 2 You are permitted to rollover a 529 plan to a family member of the beneficiary. 3 The rollover must occur within 60 days of the distribution for the distribution to not be considered a taxable distribution.
How long does it take to transfer funds from a 529 plan?
Most 529 savings plans facilitate direct transfers, without liquidating the plan assets and mailing you a check. In order to avoid any tax consequences, direct transfers must be completed within 60 days.
What’s the maximum amount you can contribute to a 529 savings account?
Maximum contribution limits vary by plan but are between $235,000 and $370,000 in most states (a few are higher). You can compare each plan’s maximum contribution limits at SavingforCollege.com.
Can you change the beneficiary of a 529 plan?
You can change the beneficiary of an existing 529 plan provided that the new or updated beneficiary is a member of the family of the old or previous beneficiary. *Please note that transfers between siblings are not considered rollovers, so moving around within an existing 529 plan does not affect your ability to pursue a rollover.
