Deducting Rollover 529 Contributions

Forum|Forum|4 years ago
February 10, 2022
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We are in the process of rolling over an out of state 529 plan to an in-state South Carolina Future Scholar 529 plan. Would the entire amount we are rolling over (about $6k) be considered a contribution that we can deduct?

Best answer by KrisD15

Yes, HOWEVER

a roll-over is only allowed once every 12 months per student/beneficiary, so if anyone else has an account for that same person, their roll-overs would count towards the limit.

Also, if you received any tax benefit for the original contribution(s), that tax benefit would need to be re-payed, or "recaptured" for the state that gave the original credit.

(A COVERDELL account would NOT be treated the same as a 529 account)

South Carolina's 529 link

KrisD15Answer

Level 15

Yes, HOWEVER

a roll-over is only allowed once every 12 months per student/beneficiary, so if anyone else has an account for that same person, their roll-overs would count towards the limit.

Also, if you received any tax benefit for the original contribution(s), that tax benefit would need to be re-payed, or "recaptured" for the state that gave the original credit.

(A COVERDELL account would NOT be treated the same as a 529 account)

South Carolina's 529 link

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