Secure 2.0 law says direct rollover from 529 to beneficiary's roth ira is not taxable for federal income tax. Why does TurboTax says it is taxable income?

529 direct rollover to roth Ira is reported on Form 1099-Q. TurboTax accepts filling out this tax form yet it considers rollover as taxable. Why?

posted

Because you entered the form. Nontaxable rollovers should not be entered. IRS Publication 970, Tax Benefits for Education states on page 45: Don't report tax-free distributions (including qualifying rollovers) on your tax return.

Keep the tax form with your records but only enter if some portion is taxable.

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Secure 2.0 law says direct rollover from 529 to beneficiary's roth ira is not taxable for federal income tax. Why does TurboTax says it is taxable income?

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Secure 2.0 law says direct rollover from 529 to beneficiary's roth ira is not taxable for federal income tax. Why does TurboTax says it is taxable income?