1. Yes it is his 1099-Q but it will not have any tax consequence, if the rollover rules were met.
2. Yes it is NOT entered in the program when tax free. According to the IRS:
- “A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn't apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit. For more information about contributions to Roth IRAs, see Pub. 590-A.”
- “Don't report qualifying rollovers (those that meet the above criteria) anywhere on Form 1040, 1040-SR, or 1040-NR. These aren't taxable distributions.”
3. NY state has conditions for it to be tax free. He may not have any taxable NY income. Tax free rollover conditions:
- The 529 account must have been open for more than 15 years.
- The eligible rollover amount must have been in the 529 account for at least 5 years.
- The annual rollover limit is subject to Roth IRA annual contribution limits.
- Rollovers can only be made to the Roth IRA account owned by the named 529 account beneficiary.
If he needs to file a NY return as a nonresident, he can. See Do I need to file an income tax return for NY?
4. WI as resident state taxes all income. If a NY return must be filed, WI will give credit for any double taxed income. WI follows the federal to determine taxation. If the distribution is not taxed on federal, it is not taxed on WI.
5. The program can handle the various states, residences, incomes and credits. Hopefully, it is all non-taxable and he can just tuck the paperwork into his tax file.
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