The change below affects the following items after December 22, 2017:
- 2018 Form 1099-Q, Payments From Qualified Education Programs (Under Sections 529 and 530), and
- 2018 Instructions for Form 1099-Q.
After December 22, 2017, but before January 1, 2026, taxpayers may now roll over limited funds from a Qualified Tuition Program (QTP) to an ABLE account without penalty or income tax. The rollover must occur within 60 days of the distribution. The designated beneficiary of the ABLE account must be:
- the same as the designated beneficiary of the QTP, or
- a family member of the designated beneficiary of the QTP.
For the 2018 reporting year, use Box 4 of Form 1099-Q for trustee-to-trustee transfers from a QTP to an ABLE account. And, if the payer/trustee chooses to include a Distribution Code in the box below boxes 5 and 6, use Distribution Code 1.
For more on ABLE accounts, including information on allowed rollovers from QTPs, see Publication 907, Tax Highlights for Persons With Disabilities.