Cost of Redeposit. 10% tax. IR-2020-124, June 19, 2020. 3. . The purpose of the account is to help you save for medical costs. Introduction. For any year that a 529 withdrawal is taken, the plan must issue a Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and. August 16, 2021 2:53 PM. For withdrawals made payable to the student or a school, the 1099-Q is sent to the student. That means the person has 60 days from the moment they receive the distribution to roll it into another IRA or retirement plan. In accordance with this law, the. To avoid certain tax consequences and penalties: • The funds you wish to redeposit must have been refunded by the student’s school and redeposited into a 529 account for that same student. There are two types of 529 plans: college savings plans. An acknowledgement that you’re making a 529 recontribution following the IRS’s guidance ( Notice 2020-23 ). Hi, I've saved up some funds in my 529 plan, and my child attends a private grade school. To process a request online: Log on to your account. You can use funds from a 529 account for a wide range of qualified education-related expenses. There are certain life situations that enable an account holder to avoid the 10% tax penalty. Unlike the Coverdell ESA, qualified expenses for elementary and secondary education (K-12) are limited in Section 529 plans to $10,000. Review the CollegeAmerica Program Description (PDF) for a complete guide to your 529 savings plan. Managed for conservative growth and income investing. There are, however, some exceptions that allow. The catch with an HSA is that you can’t open this account unless you have a high deductible health plan. You would complete the Model Letter in the appendix to Revenue Procedure 2016-47 PDF or a substantially similar letter and present it to the financial institution receiving the late rollover contribution. The Path2College 529 Plan is offered by the State of Georgia, with TIAA-CREF Tuition Financing, Inc. Special notice to non-U. The redeposit cannot exceed the amount of the original payout. You've got money set aside for just this very occasion. My withdrawal will be sent to another qualified 529 plan. In addition to college expenses, you can also spend up to $10,000 per year on tuition expenses for elementary, middle,. Type on screen or fill in using CAPITAL letters and black ink. But when tapping into the funds from this type of savings vehicle,. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view one online. Helpful tips: Taking money out of your 529 plan account won't be difficult. The first would allow students who get a refund of higher ed expenses (if they withdraw from college) to redeposit those funds back in a 529 within 60 days without penalty. Established in 1999, MOST helps Missouri families save for college, technical schools, career training and more. Families can also take a tax-free distribution to pay for tuition expenses at private, public and parochial elementary and. Educational institutions can offer pre-paid tuition programs, but not 529. If you or your beneficiary receive a check and deposit it in the Roth IRA, you could have to pay taxes and face penalties. Join Upromise for free today: Earn $5. Use this process to open a Vanguard® 529 College Savings Plan account. IR-2023-215, Nov. It’s a myth that you’ll lose your 529 plan if the child wins a scholarship. If you redeposit the money within the 60-day window, then you don’t have to worry about taxes. Roll the funds into another 529 plan. 529 Withdrawal and Deposit in the same year. as Program Manager. original Withdrawal was taken; 4) the portion of the refund you wish to redeposit must be a refund of Qualified Higher Education Expenses only; and 5) your redeposit amount cannot exceed the amount of the original Withdrawal from your Account. Environmental, Social & Governance. government charges a 10% penalty on early withdrawals from a Traditional IRA, and a state tax penalty may also apply. I was past the 60 days to redeposit when I first read about this in Kiplinger magazine, and my daughter already deposited the funds. Laura Saunders. Please consult your tax advisor for state-specific details. This investment account allows you to grow the account tax-free and withdraw funds tax-free when used for qualified education expenses. Open a 529: 529 Enrollment Application. If you’re using 529 plan funds to pay student loan debt, there is a lifetime withdrawal limit of $10,000. For more details about the Direct Plan's tax benefits, refer to the Disclosure Booklet and Tuition Savings Agreement. “The Secure Act,” Mr. - All scholarships, grants and 529 funds are claimed as taxable income *initially* in the tax year they are received. But, if the money is not used for qualified education expenses, federal income taxes may be due on any earnings withdrawn. Footnotes 1 Withdrawals for tuition expenses at a public, private or religious elementary, middle, or high school, registered apprenticeship programs, and student loans can be withdrawn free from. Read Viewpoints on Fidelity. Systematic Withdrawal Form (Non-Retirement Accounts) PDF. Request a full or partial withdrawal from your Vanguard® 529 College Savings Plan. Withdrawals from a 529 plan account; Take advantage of professional money management experience from Fidelity. That means you can deposit up to $17,000 into 529 plans for your grandson, granddaughter, and niece, all in the same year. Dividend Payment Form (Non-Retirement Accounts) PDF. Be aware of the basic 529 withdrawal penalties when you. When. But, technically, the money must be put back within 60 days of the "refund". In rare circumstances, there may be other instances in which a non-qualified withdrawal is permitted. That includes tuition, fees, books, supplies, and. If you need more room for information, make a copy of the relevant page. . Say your child receives a full or partial scholarship or attends a military academy, you can withdraw certain amounts from your 529 account that will not be used for qualified higher. The biggest tax benefit of the Section 529 plan is that it allows for tax-deferred accumulation and tax-free withdrawals for qualified expenses. Tax Questions. There are two kinds of 529 accounts: prepaid tuition plans and education savings plans. Answer: B (in most cases). • Type in the information and print out the completed form, or print clearly, preferably in capital letters and black ink. But if you withdraw the 529 plan funds first,. It's not like a Roth IRA. When you’re ready to use your funds, qualified withdrawals are tax-free. There are some guidelines including: 1) The refunded amount must re-deposited within 60 days of the issuance of the refund; and 2) it must be deposited into a qualified 529 account. Due to 2018 tax reforms, parents can use up to $10,000 saved in 529 accounts to pay tuition for children attending kindergarten through 12 th grade. if you take a $10,000 distribution from a retirement account and have the 20% withheld for taxes you must redeposit $10,000 within 60 days even though you only received $8,000 in cash. If you do not have enough qualified expenses, then yes, you need to redeposit the 529 money. $1,959. Whatever you deduct will be prorated (i. Once you’ve decided on where to send your 529 funds, the next step is to select the type of payment. Taking too much money. 529 savings plans aren't just for college. Similarly, if you have two parent-owned 529 plans, one for the beneficiary and one for the beneficiary’s sibling, at most $10,000 combined from the two 529 plans can be used to repay the beneficiary’s student loans. The Pension Protection Act of 2006 indefinitely extended the federal tax-free qualified withdrawals on 529 college savings plan savings. Residents with adjusted gross incomes of $75,000 or less are eligible to claim a tax credit equal to up to 50% of contributions, reduced by any withdrawals, with a maximum. 529 . "There are exceptions, but a converted Roth IRA is generally. but you shouldn’t have to incur a non-qualified withdrawal if you are quick and redeposit the funds within 60 days of the refund. Taking too much money. Or you can mail us a a completed Withdrawal Request Form. Log on to your account. Report any taxable 529 plan withdrawals. How to Pay. W-9 Form - advisory. For Schwab Bank, Schwab Global Account, 529 Plan and other forms and applications not listed here, view. OK, so maybe it’s not exactly up there with “wedding” or “birth of a child,” but for those who’ve been contributing to a 529 plan over the years (or decades) to offset the costs of college, this is a big day. Fee Score. A 529 savings plan is a way to save for college that offers tax and financial benefits. How Much Can I. The 10% additional tax also does not apply as a result of withdrawals made due to the death or disability of the designated beneficiary. There's also the option to pay for K-12 tuition (up to $10,000 a year per student). 1 If the funds aren't used for qualified higher education expenses, a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Savings in the program grow tax-deferred and withdrawals for qualified higher education expenses are tax-free. Request a Qualified or Non-Qualified Withdrawal from your NC 529 Account. Contact your 529 plan provider to find out how to proceed. Option #2: Transfer the 529 Plan to the Beneficiary. If that doesn't happen within 60 days, the IRS figures this distribution is a withdrawal. Here are the steps to follow: Direct 529 Plan Re-contribution You must mail in a check as the re-contribution. Nebraska - Nebraska offers the NEST 529 Plan and the TD Ameritrade 529 College Savings Plan. Request a withdrawal from your Invest529 and/or CollegeWealth account. That means that you cannot use more than $9,800 per year from your 529 plan to be “qualified”. With Ohio’s CollegeAdvantage Direct 529 Plan, you can use the compounding power of tax-free growth to save even more. So, you usually don't have to use all your tuition for the 529. Tax season is officially underway, and individuals are preparing their financial records to get tax returns ready. Are there any restrictions or things I should be aware of when it. Ronda Lee. While there are many 529 college savings plans available both in Indiana and nation-wide, only contributions made to this specific CollegeChoice 529 Savings Plans are. Contributions. Contributions made to the 529 plan in the last five years before distributions start—including the associated earnings—are ineligible for a tax-free rollover. -529 distribution covering the qualified expenses is electronically transferred to the student’s checking account. Do not staple. Fee Score. Read it carefully before you invest or send money. When 529 plan funds are used to pay for qualified education expenses there is usually nothing to report on your federal income tax return. They can go directly to you. Those who received refunds after May 15 th have 60 days from the date of the refund. In most states, you should contribute to your 529 college savings plan by the end of the year—i. The first $17,000 of gifts to each beneficiary during 2023 (or $34,000 for a married couple filing jointly) is excluded from gift taxation. It's also possible to contribute a lump sum of up to $85,000 to one or more 529 college savings plan in a single year (or $170,000 for couples) without being subject to the gift tax. Made the $747 contribution I originally planned. Contributions to an NC 529 Account and earnings thereon can be used for a. -529 distribution covering the qualified expenses is electronically transferred to the student’s checking account. Yes. Verify the linked cash security is populated in the cash security name field. A max of $35,000 can be rolled over from a 529 plan to a beneficiary’s Roth IRA. Yes, coming from an inherited IRA will prevent you from seeing the questions regarding returning the money. Include Schedule OR-529 with your Oregon personal income tax return. Since 529 plan contributions are made with after-tax dollars, the basis portion of a 529 plan distribution will never be taxed or subject to penalty. 2001 memo confirmed that they did not reduce the qualified and related expenses for the purpose of. Families receiving refunds from colleges can redeposit money to 529 plans April 24, 2020 TIM GRANT Pittsburgh Post-Gazette [email protected]. 410286. Just log on to your account and request a withdrawal. by GreendaleCC » Thu Nov 16, 2023 1:52 am. Investment objectives, risks, charges, expenses, and other important information are included in the Plan Description. Your rollover can't exceed the annual Roth contribution limit, which in 2023 is $6,500. Recontribution Request—529 College Savings Plan Use this form to recontribute a refunded distribution amount to your 529 College Savings Plan account, or to update the reporting on a previous recontribution. Under 529 plan withdrawal rules, the following are considered. 2 In addition, your 529 can be used for student loan repayment up a. Consumer Reports explains how to withdraw money from a 529 college savings plan. View All Ashbridge Strategy. For the 2023 tax year, the gift tax exclusion is $17,000 per recipient. These items must be used by the plan beneficiary while enrolled in college. 5% California tax on. Cyber1001 said "Otherwise, I might have to pay tax for the capital gain of the money withdrawn from 529 plan. Fidelity manages plans for four states. I. My withdrawal will be used to pay for the designated beneficiary’s qualified expenses. Check with a local accountant to see how this may impact your state tax return. a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. Your subsequent deposit will not wipe out the withdrawal. To process a request online, log on to your account, choose Go to my 529 plan account, and then select Withdrawal. Account Transfer Form (Non-Retirement) PDF. The Benefits Of 529 Plans For Retirees. • Non-qualified withdrawals will incur a 10 percent penalty on the earnings portion of that non-qualified withdrawal and should be reported as income by the 1099-Q recipient. Funds may be used at virtually any college or university in the United States, and many abroad. 529 Plans and Your Tax Return. January 2016. minimum contribution. To process a request online, log on to your account, choose Go to my 529 plan account, and then select Withdrawal. Taxable Withdrawals: The earnings portion of this type of withdrawal is subject to federal and state tax but does not include the additional federal 10% tax. Qualified education expenses include tuition, fees, books, computers and related technology and some room and board costs for students attending an eligible college or university. Unless it's a real emergency, or you're 100% sure you will have the funds available (pre-withholding) to redeposit to your IRA, it's best to avoid the 60-day rollover. If you use a 529 plan to save for college, your savings will have a minimal impact on. S. No. Withdrawals from a 529 plan account can be taken at any time, for any reason. Vanguard 529 Power of Attorney. Historically, withdrawals from grandparent owned 529 plans have been considered untaxed income to the student and added to the student’s adjusted gross income on the FAFSA. 529 withdrawals are tax-free to the extent your child (or other account beneficiary) incurs qualified education expenses (QHEE) during the year. charges, and expenses before investing. Qualified withdrawals now include expenses related to apprenticeship programs and certain student loan payments. You may be able to avoid a penalty if your withdrawal is for: First-time home purchase. 00 administrative charge for Non. Step 2: Determine when to withdraw the funds. 5% California tax on earnings. The 1099-Q reports the total of all withdrawals you make during the year; however, some of this amount may be. Enrollment fees: Includes student activity fees you are required to pay to enroll or attend the school. Bookmark Icon. Redeposit Request Form. For more information about Wisconsin's Edvest 529 College Savings Plan, call 1-888-338-3789 or click here for a Plan Description which includes investment objectives, risks. Updated: Sep 2021. Non-qualified withdrawals will incur a 10 percent penalty on the earnings portion of that non-qualified withdrawal and should be reported as income by the 1099-Q. You can also use the 529 assets to pay for certain apprenticeship program expenses (books, supplies, equipment, etc. Step 4: Complete a withdrawal request online with the plan administrator. Records a withdrawal of a cash security. Changes to Grandparent 529 Plan Rules. Mistake #2: Relying on Form 1098-T. Resize. Qualified Tuition Plans (QTP 529 Plans) Distributions. The scope of the 529 plan has increased in recent years to include student loan repayment, apprenticeship. On the downside, you cannot repay that money, so you will be reducing your retirement nest egg. General Discussion. For those who are under 59. Your withdrawal will take 2–4 business days from the time of your withdrawal request until the money is available in the account you are transferring to. We usually use less than the "allowed" (college cost of attendance R&B amount) room and board. You can also request a withdrawal to your address or bank account on file using our voice response system. If you end up taking a non-qualified withdrawal, you’ll incur. A digital copy can be accessed through your online account. ** I will invest my withdrawal in another Qualifed Tuition Program within the next 60 days. If you're a New York State taxpayer, you can also benefit from the state tax deduction. It’s only if you don’t deposit. On the downside, you cannot repay that money, so you will be reducing your retirement nest egg. But you will pay a 10% penalty plus income tax on any of the earnings your fund had over the years. If you really think there is no chance you or anyone else in your family will ever use the funds in the 529 plan for education-related purposes, then go ahead and take a nonqualified distribution. Invest529, Virginia's direct-sold college savings plan is available to residents of any state, and offers low fees, diverse investment options and tax benefits for residents. Again, your earnings will not incur federal taxes as long as your payments go towards tuition. See moreAs mentioned above, if you take a distribution from a 529 plan and use some or all of it to cover non-qualified expenses, you will. The target enrollment. The intention of 529 plans is to encourage college savings. 2. Gifting larger amounts to a 529 account is a unique opportunity to support your loved one’s college education and contribute to your personal investments. You can take a nonqualified withdrawal. Rollovers from 529 plans to Roth IRAs are only permitted if certain criteria are met including: 529 plan beneficiaries can roll over up to $35,000 to a Roth IRA over their lifetime. Withdrawals for student loan repayments and apprenticeships can go to the account owner or beneficiary. Take the Money – and the Penalties. Fair enough. Once you’ve decided on where to send your 529 funds, the next step is to select the type of payment. ** H. 60-day rollover – If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it in an IRA or a retirement plan within 60 days. • Use this form to request a full or partial Qualified Withdrawal, Non-Qualified Withdrawal or Indirect Rollover from your Oklahoma 529 Account. With the new form, the amount of a student’s “total income”, which includes untaxed income, will come directly. 3. 3. Note: You can also request most withdrawals by telephone. All states offer 529 plans (except for Wyoming), and there are two types: Savings plans (savings are. 0. Additions Oregon College, MFS 529 Savings Plan and ABLE account non-qualified withdrawal. College savings plans – These work a lot like a Roth 401 (k. a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. 796549. The quickest and easiest way is online. ↩. For a Roth 401 (k) or Roth IRA, you can withdraw your contributions at any time. Part 1: Direct Deposit To deposit all or a portion of your refund into an Oregon College Savings Plan or MFS 529 Savings Plan account, complete Part 1. A 529 savings plan is designed for the longer term. This investment account allows you to grow the account tax-free and withdraw funds tax-free when used for qualified education expenses. For Illinois taxpayers contributions to Bright Start are tax deductible. For 529 funds those can be used to pay for the qualified education expenses of tuition, books,. Planning LIFE MOMENTS. All 529 plan withdrawals must be taken in the same year the qualified expenses have been incurred. A 529 account is a state-sponsored way to help you save for your kid's college. 0 1,795 Reply. A primary focus of CSF is building public awareness of and providing public policy support for 529 plans – an increasingly vital college-savings vehicle. For this and other information on any 529 college savings plan managed by Fidelity, contact Fidelity for a free Fact Kit, or view. 529 education savings plans. To access, please call 1-866-529-8582 and follow the prompts. Exceptions to 529 withdrawal penalties. You will get a 1099Q showing the withdrawal and will probably owe tac es and penalty. Contributions to any state’s 529 plan of up to $1,500 per year by an individual, and up to $3,000 for a joint return are deductible in computing Minnesota taxable income. The Contribution. Know which expenses qualify. The cost of certain apprenticeship program. You enter data derived from the 1099-Q in your tax return. Withdraw Funds Only for Qualified Expenses. The other option is the Print and Fill. These moves can save you money and avoid costly penalties. Taking money out of your 529 plan account won't be difficult. If you contribute money to a qualified tuition program, such as a 529 plan or a Coverdell ESA, you will likely receive an IRS Form 1099-Q in each year you make withdrawals to pay school expenses of the beneficiary. 0 1,795 Reply. Log on to your account. a federal 10% penalty tax on earnings (as well as federal and state income taxes) may apply. R. 03 as of 11/15/2023 (updated daily) Fund Assets (millions) $83,438. These include items such as tuition and fees, room and board, textbooks and lab. Making a 529 plan withdrawal takes a few minutes on your computer. a 529 plan. Rollovers are. Submit a Withdrawal Request form . This. I have this situation with 2 children and 2 529 plans. However, they must pay federal income tax on the withdrawal and a 10% penalty. If you withdraw more than the QHEE, the excess is a non-qualified distribution. Invests primarily in well-established companies with strong balance sheets and a history of consistently paying dividends, helping to provide downside resilience. Beginning with the 2009-2010 school year, Dependent Student-owned and UGMA/UTMA-owned 529 accounts are no longer excluded from the Free Application for Federal Student Aid (FAFSA) but are instead to be reported as parental assets. Check with your state for specific tax benefits. No, The 529 funds do not have to go to a bank account in your daughter's name. ↩. My daughters received the refunds and deposited them, and my plan was to do the same- reduce the 529 withdrawal in 2020 by the amount of the refund. When. A 529 plan is an investment account that offers tax benefits when used to pay for qualified education expenses for a designated beneficiary. Find easy access to all our 529 forms including applications, transfer, and account management forms. There are no withdrawal limits for distributions used for post-secondary higher education, but there is a $10,000 annual withdrawal limit when funds are used for primary or secondary education. m. Basically, you put after-tax money into it, then it grows tax-free, and if spent on legitimate college (or med school) expenses, it comes out of the account tax-free. Beginning with the 2024. If you're able to redeposit the money or roll it into a new account during the 60-day safety window, you'll need to replace. Select Make a Withdrawal from the options on the right. The maximum annual Roth IRA contribution limits still apply—while the 2024 numbers aren’t out yet. Bright Start provides the following: IRS Form 1099-Q — issued only when a withdrawal is requested during the year. The Biggest 529 Withdrawal Mistake To Avoid. K-12 expenses. You can call your plan administrator, make a request online, or submit a withdrawal request form. However, you may not take a basis-only 529 plan withdrawal. The plan can send withdrawals by check to the account owner, the beneficiary, or the school. Just about anybody can open a 529 account — parents, grandparents, other relatives, friends — as long as he or she is a U. – 6 p. You have to pay a 10% additional tax on the taxable amount you withdraw from your SIMPLE IRA if you are under age 59½ when you withdraw the money unless you qualify for another exception to this tax. Nestled in the $1. If you use 529 funds to pay a college and then receive a refund, you normally have 60 days to redeposit those funds into your 529. However, earnings on the 529 funds are still subject to income tax even in these cases. 16, 2023 — The Internal Revenue Service today reminded individual retirement arrangement (IRA) owners age 70½ or over that they can transfer up to. This. After putting money in a 529 plan, you can withdraw money to pay for college. Rollovers are. * Please note that this is the withdrawal process for CollegeAdvantage Direct 529 plan accounts only. The 529 plan must be at least 15 years old and rollover funds will still be subject to Roth annual contribution limits, which for 2023 is $6,500. You must redeposit the refund from your Beneficiary’s Eligible Institution into an NC 529 Plan Account for the same BeneficiaryTax-Free 529 Withdrawals — No income tax is paid on the growth of your account when withdrawals are used for 529 qualified expenses. Valid for 2017 personal income tax return only. For more information on the different service credit options available to you, visit. Bank Information Form PDF. Starting January 1, 2018, this definition is expanded to include up to $10,000 in K-12 tuition expenses per beneficiary per year. If you’re using 529 plan funds to pay student loan debt, there is a lifetime withdrawal limit of $10,000. Room & board costs are considered qualified only during. military academy. A 10% federal penalty tax and. The loan repayment provisions apply to repayments up to $10,000 per individual. This benefit applies to federal taxes. NY 529 Direct Plan account owners benefit from tax-deferred earnings and tax-free withdrawals. If the beneficiary withdraws from the account later for qualified educational expenses then those. The majority of plans offer two options – you can make an ACH deposit to your bank account, or have a check printed and mailed. You have two options for each form. Couples filing taxes jointly may contribute a total of $34,000 per year per beneficiary without paying gift tax. **. 1. Also, if you access any gains, you are subject to potential fees and taxes. View All Our Family of ETFs. States take different approaches to the income tax treatment of withdrawals. In Washington state, for example, the 529 withdrawal penalty for non-qualified distributions includes earnings on 529 funds being taxable at the federal and state level, plus the 10% federal. 529 savings plans may also be used to save for K-12 tuition. These plans are tax-advantaged and money contributed to them can be invested for example in mutual funds and exchange-traded funds, to allow for potential growth over time. You must mail in a check as the re-contribution. 25% tax. If you withdraw money from your 401 (k) before you’re 59 ½, the IRS usually assesses a 10% tax as an early distribution penalty. 2 If the funds aren’t used for qualified higher education. How Our 529 Works. That includes both religious and charter schools that enroll students from kindergarten through 12th grade. If the beneficiary gets a scholarship, uses their GI Bill benefits, enlists in the military, or enrolls in a service academy, they can withdraw funds from their 529 without. The earnings portion of 529 plan withdrawals must be used for qualified higher education expenses to maintain their tax-free status and avoid a 10 percent tax. The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. IRS is aware of concerns expressed by 529 plan administrators regarding the administrative burdens that would arise if a recontribution of a refunded QHEE is treated in the same manner as a rollover under Notice 2001-81 requiring a breakdown of the earnings portion of the recontribution. Answer: Generally, if you withdraw money from a 529 for anything other than eligible college expenses, the earnings portion of each withdrawal will be subject to income taxes and a 10% early. Ohio’s 529 Plan, CollegeAdvantage, like other 529 accounts, benefits from specific tax advantages, including tax-free withdrawals for qualified higher education expenses. Withdrawal for a Qualifed Education Loan Repayment to the Benefciary. A 529 plan offers tax-free earnings and tax-free withdrawals as long as the money is used to pay for qualified education expenses. 4. 29 in bonus rewards when you open a new Upromise account. college tuition and related fees;The IRS refers to it as a 60-day rollover. If you contribute money to a qualified tuition program, such as a 529 plan or a Coverdell ESA, you will likely receive an IRS Form 1099-Q in each year you make withdrawals to pay school expenses of the beneficiary. Non-qualified withdrawals may also be subject to an additional 2. But if you take a nonqualified withdrawal, any earnings withdrawn are subject to federal income taxes plus a 10% federal penalty. This includes expanding the categories of individuals eligible. IRA/401k withdrawals & redeposits. General Discussion. 529 College Savings Plan Withdrawal Request Form Download: 529 MoneyLink Form Download: 529 Learning Quest College Savings Maintenance Forms: Learning Quest 529 Plan Account Features Form. com. 1. You can use funds from a 529 account for a wide range of qualified education-related expenses. The 1099-Q reports the total of all withdrawals you make during the year; however, some of this amount may be. Account owners may redeposit funds that were previously withdrawn from Prepaid529 accounts. The amount of the additional tax you have to pay increases from 10% to 25% if you. If funds are withdrawn for a purpose other than qualified higher education expenses, the earnings. 120-144 Month CD (10 to 12 years) 1.