Can we move the funds from my childs ESA into a 529 plan?
Yes. A withdrawal from an ESA is tax-free to the extent that contributions are made to a 529 account for the same beneficiary in the same taxable year. Apparently it doesnt matter if you use your own funds in contributing to the 529 plan when accomplishing this rollover (so that you can be the account owner) or if you use the funds received by your child from the old ESA (in which case it my be more proper that your child or legal representative be the account owner of the 529 plan). Of course if you use your own funds, then you still need to think about what to do with the ESA withdrawal funds in the hands of your child. Your choice of approach may also have different gift tax ramifications.
Related Questions
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- How can I get information about Fidelity Electronic Funds Transfer transactions in brokerage and college savings plan accounts?
- Can we move the funds from my childs ESA into a 529 plan?
