In TurboTax, how do I reflect a 529 trustee-to-trustee contribution to a Roth IRA, now allowable in 2024?

[natz-peterman]

It appears that the distribution taken from the 529 is showing as income subject to tax and penalty, but the transfer should be tax- and penalty-free.

[AmyC]

Since you entered the form, the program is making it taxable. A nontaxable transaction should not be entered.  Please remove the form and keep it with your tax files.

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.”