Remaining money in the 529?

What if you have extra dollars remaining in the 529 after paying for the beneficiary's college expenses?

Is your only option withdrawing it and paying the 10% penalty on the earnings? Is it possible to "roll" the remaining dollars to another family member about to enter college?

Thanks!

You have several options if the 529 has remaining money:

1) Take the remainder out as a nonqualified withdrawal.

2) Change the beneficiary of the account to someone else. See IRS Publication 970 for who is appropriate. Be aware of gift tax implications.

3) Do nothing - the beneficiary can use the proceeds in the future for additional education. You should also be able to change the ownership of the account to the beneficiary (in many plans) so that the beneficiary can use the plan for his/her own children, etc., in the future. Again, be aware of gift tax implications.


Hope this helps.

TJ