If I deposit part of my 2024 I-Bond redemption proceeds into a 529 plan, do I need to make the deposit within a certain time after the redemption?

[ba.albu]

The redemptions occurred early in the year and the deposits were made monthly throughout the entire year. TurboTax is not asking for any redemption or deposit dates (other than the year).

[ThomasM125]

Yes, you need to make the deposit into the 529 plan within 60 days from the date of redemption.

[ba.albu]

Thank you for the reply. Do you have a source for this? I have looked everywhere and I find this 60-day rule only with respect to retirement plan rollovers. I cannot find any IRS document, code or regulation stating this 60-day rule applies to the i-bond/529 situation. The 529 contribution here is not a true “rollover,” but more akin to an education expense. 

[AmyC · Accepted solution]

60 days is the rule for moving between education accounts but for the I bond, I could only find Education savings bond program which did not list the 60 day rule. Since this is new, I imagine the courts will refine the rules.

For education expenses   Pub 970 states:

Qualified education expenses.

These include the following items you pay for either yourself, your spouse, or a dependent.

Tuition and fees required to enroll at or attend an eligible educational institution. Qualified education expenses don't include expenses for room and board or for courses involving sports, games, or hobbies that aren't part of a degree or certificate-granting program.

Contributions to a qualified tuition program (QTP) (see How Much Can You Contribute in chapter 7).

Contributions to a Coverdell education savings account (ESA) (see Contributions in chapter 6).

[ba.albu]

Thank you. That makes sense. The contribution seems to be treated like an education expense, not a rollover, and I think some online articles/advisors are conflating the rule for a true 529-to-529 "rollover" with the rules for using savings bond proceeds to pay education expenses.