Roll Over Funds from Another 529 Plan

• Account Owner

  The account owner on the College Investment Plan account must be the same as the account owner on the account that is being rolled over.

• Beneficiary

  • IRS regulations allow only one rollover per beneficiary during a rolling 12-month period without tax implications.
  • If the beneficiary changes, there is no limit on rollovers between 529 plans. You can rollover funds between 529 plans any time for a different beneficiary as long as that beneficiary is a member of the previous beneficiary's family.*

• Tax Considerations

  • A Maryland taxpayer who rolls over funds from another 529 plan is eligible for a unique Maryland State income subtraction of up to $2,500 per beneficiary per year by an individual, and up to $5,000 per beneficiary per year by married taxpayers filing jointly with a 10-year carry forward of excess contributions.
  • Rollover contributions received from another qualified 529 plans are considered contributions in the tax year it is received. The total amount of the rollover contribution is eligible for the Maryland State income subtraction, including any earnings. Rollover contributions are only eligible to be subtracted from Maryland State taxable income if not previously subtracted while within the other 529 plan.
  • A rollover to the College Investment Plan from another 529 plan must include documentation showing the portion that is principal and the portion that is earnings, if any. If the College Investment Plan does not receive this documentation, it is required to record the rollover as all earnings.
  • Non-Maryland taxpayers and residents should determine (1) whether the state where they or their beneficiary pay taxes offers a 529 plan that provides tax benefits not available by investing in the College Investment Plan, and (2) the consequences of rolling funds over from that state's 529 plan to the College Investment Plan. You should check with your tax professional regarding your specific situation.

*Maryland 529 cannot and does not provide tax advice. Please check with your tax professional regarding your specific situation.

The availability of tax benefits may be conditioned on meeting certain requirements, such as residency, purpose for or timing of distributions, or other factors as applicable. Please consult with a tax professional regarding your specific situation.