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Can I move money from another 529 plan to this 529 plan?

 

Yes, you can transfer (aka “roll over”) savings from another 529 plan to a Wealthfront 529 account.

How it works (if you don’t already have a Wealthfront 529 account)

  1. Open a Wealthfront 529 account and select "529 Rollover / Plan Transfer" as your funding method.
  2. We'll email you a partially-prefilled rollover request form that you'll complete, sign and mail/fax to your other 529 plan. This should only take a few minutes.
  3. Your other plan will send a check directly to Wealthfront, and we'll invest the proceeds according to your Wealthfront 529 investment plan. This generally takes a few days to a few weeks after you mail the form, depending on your other plan.

Tax considerations

  • The IRS allows one tax-free rollover of a 529 account per 12-month period for the same beneficiary (i.e. the student). If you’re transferring from a 529 plan sponsored by Nevada, which also sponsors the Wealthfront 529 Plan, the transfer is considered an “investment reallocation” instead of a rollover. You can do a tax-free investment reallocation twice per calendar year. If you transfer more often than allowed, the transfer will be treated as a non-qualified withdrawal resulting in federal and applicable state income tax and the additional 10% federal tax on earnings.
  • The IRS allows tax-free rollovers for the benefit of a new beneficiary so long as the new beneficiary is a member of the current beneficiary’s family (as defined here). If the new beneficiary is not an eligible member of the family, the transfer will be treated as a non-qualified withdrawal resulting in federal and applicable state income tax and the additional 10% federal tax on earnings.
  • If you roll over from another state's plan for which you received state tax benefits on prior contributions, you may be subject to adverse state tax consequences. You should consult your other plan and/or personal tax advisor for tax advice based on your particular circumstances.

 

 

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Nothing in this blog should be construed as tax advice, a solicitation or offer, or recommendation, to buy or sell any security. Financial advisory services are only provided to investors who become Wealthfront Inc. clients pursuant to a written agreement, which investors are urged to read carefully, that is available at www.wealthfront.com. All securities involve risk and may result in some loss. For more information please visit www.wealthfront.com or see our Full Disclosure. While the data Wealthfront uses from third parties is believed to be reliable, Wealthfront does not guarantee the accuracy of the information.

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