how do I report 529 distribution to Roth IRA?

Forum|Forum|1 year ago
February 5, 2025
1 reply
0 views

No text available

SusanY1

As long as you made this as a trustee-to-trustee transfer (where the funds went directly to your Roth IRA from the 529 plan) and you did not exceed the $7,000 contribution limit, you do not need to report the transaction at all.

Keep information about both sides of the transactions in your records for at least 3 years, but you do not need to report anything on the tax return or enter any data about the transaction into TurboTax.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

dgoyal1504

Hello,

I saw an answer on your website that I don't need to report a 529 distribution to Roth IRA if the amount is less than 7000. My 1099-Q is showing this a Trustee to Trustee transfer. I still tried to enter this in Turbotax. Why TurboTax is treating this as an income?

AmyC

The IRS is quite clear that only taxable information should be entered. The program will tax what you enter as only you know if it meets the requirements.

A nontaxable transaction should not be entered and is repeated throughout Pub 970. Please remove the form and keep it with your tax files.

Please verify your transaction is nontaxable.

IRS Publication 970, Tax Benefits for Education states:

Any amount distributed from a QTP isn't taxable if it's rolled over to:

Another QTP for the benefit of the same beneficiary or for the benefit of a member of the beneficiary's family (including the beneficiary's spouse),
An ABLE account for the benefit of the same beneficiary or for the benefit of a member of the beneficiary’s family (including the beneficiary’s spouse). But this doesn’t apply to the extent the amount distributed when added to other amounts contributed to the ABLE account exceeds the annual contribution limit. For more information about ABLE accounts, see Pub. 907, Tax Highlights for Persons With Disabilities, or
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.

@dgoyal1504

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"