1. 529 plan scholarship exception reporting: I have overfunded my daughter's 529 plan since she receives scholarship from college. She starts college this year. We will claim her as our dependent. We have the qualified education withdrawal from her 529 plan sent directly to her bank account to pay for her education expenses. Since we have overfunded her 529 plan, we plan to have non-qualified education withdrawal for the scholarship portion (her scholarship only covers tuition) penalty free from her 529 plan and have that amount sent to the parent bank account. How should I file for tax in this situation? I want to make sure that I understand how to file the tax, penalty free, for the non-qualified withdrawal before I make the withdrawal.
2. ESA rollover: I have also overfunded my son's ESA since the education expenses are lower with in-state tuition. He is graduating next year, so I plan to rollover his ESA to my daughter's. Will there be any tax implication with the rollover?
Thanks for all your help!
