Rollover an existing 529 account

• PA 529 College Savings Program assets are not subject to Pennsylvania Inheritance Tax.  Depending on who your heirs are, that could be a savings of up to 15 percent of the entire value of your account.  Savings in other states’ plans are subject to applicable inheritance tax.
• PA 529 College Savings Program assets are not counted against you for state financial aid purposes.  That means that your savings will not disqualify your eligible children from getting Pennsylvania grants – or reduce the amount of the grants.  Savings in other states’ plans will be counted.
• PA 529 College Savings Program accounts are protected in state court proceedings from creditors.  Unless you declare bankruptcy, your savings in other states’ plans could be taken by creditors.

And, another unique feature is guaranteed scholarships – up to one full year's tuition – at 295+ participating private colleges and universities through the SAGE Scholars Tuition Rewards Program.  Annual Tuition Rewards are earned based on the value of your eligible investments.  Each Tuition Rewards point is equal to a $1.00 guaranteed minimum scholarship at any of the member schools.  The maximum scholarship varies by college - but currently is over $40,000! 

Consider investment performance and fees as well. 

• Savingforcollege.com ranks the Pennsylvania 529 Investment Plan among the top performers.  As of June 30, 2012, Pennsylvania ranked second in one-year performance, eleventh in three-year performance and fourth in five-year performance among all the direct-sold 529 plans in the nation.
• PA 529 Investment Plan fees are modest.  Many plans – especially those sold through advisors –have fees that are more than three times as expensive.

Have questions?

How do I roll over another 529 account into my PA 529 account?
A) You can roll over funds from your existing 529 account into a Pennsylvania plan by first opening a PA 529 account and completing the appropriate Incoming Rollover Form for the Pennsylvania Plan.  The PA 529 will then request the funds from the other program.  If you have already closed your other account, you can send the proceeds from the rollover with a copy of your Enrollment Form and a breakdown of the principal and earnings of the rollover.  Please note that, in order for the rollover to be protected from federal and state taxes, we must receive the funds within 60 days of their being withdrawn.

I have a UTMA/UGMA account with another 529 plan.  Can I roll over the funds into my child's PA 529 account?
A) You can roll over funds from an existing UTMA/UGMA account into an existing PA 529 account, but it is important to note that the PA 529 account will then have the additional restrictions applicable to the UTMA/UGMA account.  Another alternative is to open a second PA 529 account exclusively for the UTMA/UGMA rollover.  By keeping UTMA/UGMA and other contributions in separate accounts, the restrictions on UTMA/UGMA would not apply to funds in the non-UTMA/UGMA 529 account.  You should review our program disclosure as it relates to UTMA/UGMA accounts before making this transaction.

How often can I roll over my account?
A) You can roll funds over for the same beneficiary only once per 12 consecutive month period.  If you change the beneficiary to a family member of that beneficiary, however, there is no limit on how often you can roll over an account.

I have a 529 account in another state.  What are the tax implications if I roll it over to a PA 529 account?
An amount rolled over from another 529 plan account cannot be deducted from taxable income for Pennsylvania taxpayers, as most other contributions can be.  However, the rollover, if done within the rules, will not be taxed by Pennsylvania or the federal government at the time of the rollover.  When the account is used, the normal rules governing the type of withdrawal you take would apply.  You should check with your other plan to see if they charge any penalties for rolling funds out of their account to another 529 plan.
For out-of-state residents and for people who have previously completed rollovers for the same beneficiary, you should check with your tax advisor for additional considerations. 

I have savings bonds that are about to mature.  Can I roll them over into my child's PA 529 account?
A) In order to roll savings bonds into a 529 plan as a tax-deferred event, for federal tax purposes, the bonds have to meet the following requirements:

1. Must be a Series EE bond issued after 1989 or a Series I bond.
2. The bond must be issued either in your name (as the sole owner) or in the name of both you and your spouse (as co-owners).  If the bond is for a child, the child may not be listed as the owner or co-owner – they can be the beneficiary of the bond.
3. The owner must be 24 years old before the bond's issue date.
4. The bonds must be used for the owner, the spouse of the owner, or a dependent for whom you can claim an income tax exemption on your federal return.  If the grandparent is the owner, they will not qualify unless they can claim the beneficiary.
5. If married, you must file a joint tax return.
6. You must meet the following income requirements:
   - Single making less than $71,100
   - Single phases out from $71,100 to $86,100
   - Married making less than $106,650
   - Married phases out from $106,650 to $136,650

If they meet all of the requirements above, you must do the following to roll your savings bond into your account:

1. Record the serial number, issue date, face value, and total redemption proceeds (principal and earnings).  You need to use this information for your IRS Form 8818.
2. Cash your bonds at any bank or financial institution.
3. Make the payment to your PA 529 GSP and send it to the Plan with a letter stating it is for a Savings Bond Rollover.  Please include a statement or Form 1099-INT from the bank/institution to show the principal and earnings.

I plan to roll over my older child's 529 account in another state to a PA 529 account. Can I establish the new account for my younger child instead?
A) You can roll over funds from your older child to your younger child provided you have not completed a rollover for either beneficiary within a 12-month period and that you are the owner of both 529 accounts.  If you do not own both 529 accounts, most plans will require a change in ownership prior to completing the rollover.  It is also important to note that several 529 plans will not allow you to complete a rollover to a different beneficiary and you might need to change the beneficiary prior.  Please check with your other plan for their conditions.

You would not be able to make a rollover between beneficiaries if the originating account is an UTMA/UGMA account.

How do I roll over a Coverdell ESA to a PA 529 account?
A) You can roll funds from your Coverdell ESA account into a Pennsylvania plan by first opening a PA 529 account and completing the appropriate Incoming Rollover Form for the Pennsylvania Plan.  We will then request the funds from the other program.  If you have already closed your other account, you can send the proceeds from the rollover with a copy of your Enrollment Form and a breakdown of the principal and earnings of the rollover.  Please note that, in order for the rollover to be protected from federal and state taxes, we must receive the funds within 60 days of their being withdrawn.

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