New York 529 rollover to Roth IRA and Turbotax annual income limit

[cmomed]

Hi: My child (who is a working adult) qualifies for the NY 529 rollover to Roth IRA.  It has already been logged by the financial institution as a 2024 tax year Roth contribution.  I do not have a 1099 Q since this contribution was made in 2025 for Tax year 2024.  When I enter the $7000 contribution in Turbo Tax as a retirement contribution, Turbo Tax says that she is not allowed the Roth IRA contribution for 2024 because her annual income exceeds the IRS threshold, and is directing me to withdraw the contribution because of the penalty.

But a 529 rollover  to Roth does not have this type of annual Roth IRA income limitation.

From the financial institution:

• As with Roth IRA contributions, the beneficiary must have earned income that matches or exceeds the rollover amount up to the annual limit. (However, the beneficiary is not subject to Roth IRA income limitations.)

How should I handle?  I was thinking not to report this on TurboTax for her return as the main advantage is that Turbo Tax keeps track of the total basis from prior years, but the institution does that as well

Any thoughts on what to do?

Thanks all

[KrisD15 · Accepted solution]

The IRS recommends that a 529 rollover to Roth needn't be reported. 

TurboTax does like to keep track of Roth account balances as a courtesy, but it is not mandatory. 

You, and/or your financial institution can keep track of that for future reference. The earnings portion would need to be known for an early withdrawal . 

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.”
 

[cmomed]

Thanks so much for your help