QTP TO ROTH

[Fred McGovern]

I have been reading some of the comments on QTP to Roths, someone said these are considered rollovers and rollovers are unlimited, but from what I have read the QTP to Roth is considered a contribution and not a rollover, so that would limit it to $7,000 in 2024?

Client rolled over $111,000+ to the roth in january 2024, so the 5498 won't be out until may 2025.

[DanaB27]

Yes, these rollovers are limited to the annual contribution limit. Therefore, the 7,000 limit would apply for 2024, if they are under 50.

Pub 590-A states:

"Qualified tuition program rollover to a Roth IRA.

Beginning with distributions made after December 31, 2023, a beneficiary of a section 529 qualified tuition program is permitted to roll over a distribution from the section 529 account to a Roth IRA for the beneficiary if certain requirements are met.

• The rollover must be paid through a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of the beneficiary.
• The rollover amount for a year cannot be more than the Roth IRA annual contributions limit, and all such rollovers for the individual’s lifetime cannot exceed $35,000.
• The rollover must be from a section 529 account that has been open for more than 15 years.
• The distribution cannot exceed the aggregate amount contributed to the program (and earnings attributed to the contributed amount) before the 5-year period ending on the date of the distribution.

A distribution made after December 31, 2024, and before April 15, 2025, that is rolled over to a Roth IRA by April 15, 2025, and designated for 2024 would be reported as a Roth IRA contribution for 2024."