I made a mistake in Dec 2023 and withdrew 529 money for my child’s college tuition, but didn’t pay the tuition to the school until Jan 2024. I want to avoid paying taxes and penalties on this excess distribution. What are my options? I’ve read that I can “rollover the same amount into another 529 within 60 days.” Does that mean another 529 account at the same plan administrator or a different one? Can it be the same beneficiary? Please help! I have to resolve this soon.
Have you called the institution where the 529 is held and ask them if they can reverse the distribution? Since it’s the new year, that may not be possible but worth a call.
If that doesn’t work out, I would go the rollover route. The rollover can be to the same beneficiary. That’s the definition of “rollover”, a rollover to the same beneficiary. I have rolled over my accounts a couple of times with no issues. A change in beneficiary would be a “transfer”. I don’t know if you can do it to the same account, however. You made need to open a new one somewhere.
Does the distribution go to cover tuition (presumably spring 2024)? If it covers tuition, it shouldn’t be taxed.
Yes, the distribution is for tuition. But the withdrawal has to occur in the same year that the tuition was paid.
Thank you for the information. I contacted the institution and the withdrawal cannot be reversed because it went to my daughter, not go directly to the university.