QTP TO ROTH

Forum|Forum|1 year ago
March 10, 2025
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I have been reading some of the comments on QTP to Roths, someone said these are considered rollovers and rollovers are unlimited, but from what I have read the QTP to Roth is considered a contribution and not a rollover, so that would limit it to $7,000 in 2024?

Client rolled over $111,000+ to the roth in january 2024, so the 5498 won't be out until may 2025.

DanaB27

Yes, these rollovers are limited to the annual contribution limit. Therefore, the 7,000 limit would apply for 2024, if they are under 50.

Pub 590-A states:

"Qualified tuition program rollover to a Roth IRA.

Beginning with distributions made after December 31, 2023, a beneficiary of a section 529 qualified tuition program is permitted to roll over a distribution from the section 529 account to a Roth IRA for the beneficiary if certain requirements are met.

The rollover must be paid through a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of the beneficiary.
The rollover amount for a year cannot be more than the Roth IRA annual contributions limit, and all such rollovers for the individual’s lifetime cannot exceed $35,000.
The rollover must be from a section 529 account that has been open for more than 15 years.
The distribution cannot exceed the aggregate amount contributed to the program (and earnings attributed to the contributed amount) before the 5-year period ending on the date of the distribution.

A distribution made after December 31, 2024, and before April 15, 2025, that is rolled over to a Roth IRA by April 15, 2025, and designated for 2024 would be reported as a Roth IRA contribution for 2024."

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