In 2017, we rolled over our NJBEST 529 account completely into a NY 529 plan. We received 1099-Q forms for this rollover. We filed our 2017 tax returns last week but forgot to include the 1099-Q forms.
I went through the TurboTax amend tax return process and it states that it had no effect on our taxes. I know that 529 rollovers are not taxable but not sure how to proceed. Are we required to file an amendment regardless?
A 529 plan rollover is not taxable and has no effect on your tax return. You do not need to amend your tax return. Just keep that form 1099-Q in your tax records for at least 3 years.
Thank you for the quick response, TurboTaxMinhT. Much appreciated.
I'm looking to do an indirect rollover from a 529 to an ABLE account. I am the owner of the 529 while my child is the beneficiary. Under ABLE, I understand that the owner and the beneficiary must be the same person. It it therefore necessary for the withdrawal from the 529 be made in my child's name? If not, and considering that the rollover itself will be a non-taxable event, are there any tax implications to doing it in either my name or my child's name?
No - The 529 withdrawal does not have to be in the child's name.
According to the IRS:
Rollovers and transfers from section 529 plans
States can offer ABLE accounts to help people who become disabled before age 26 and their families save and pay for disability-related expenses. These expenses include housing, education, transportation, health, prevention and wellness, employment training and support, assistive technology and personal support services. Though contributions aren’t deductible for Federal tax purposes, distributions, including earnings, are tax-free to the beneficiary, as long as they are used to pay qualified disability expenses.
For more information click on this link: Tax reform affects ABLE accounts, saver’s credit, 529 rollovers