direct rollover from NY 529

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stanguy
Posts: 5
Joined: Fri Mar 02, 2012 1:37 pm

direct rollover from NY 529

Post by stanguy » Wed Jun 13, 2018 6:42 pm

I'm thinking of consolidating my finances, and rolling over my son's 529 from the NY DirectPlan to Vanguard to have one less login.

However, I'm a bit concerned about the tax implications. I'm not, and have never been, a NY resident.

https://www.nysaves.org/home/why-ny-529 ... efits.html
has a line:
A rollover of assets from your Direct Plan account to a 529 plan in another state is subject to New York State income tax on earnings, as well as the "recapture" of all previous New York State tax deductions made during the life of the account.

Not worried about recapture of NYS deductions, since I did not have any :).
But, am I subject to NYS income taxes simply because of rolling over a NY 529 plan?

Has anyone done a rollover from NY 529 plan to some other 529? How do I get confidence there will be no tax effects of such a rollover?

Thanks.

blevine
Posts: 1846
Joined: Sat Feb 27, 2010 3:57 pm
Location: Paradise

Re: direct rollover from NY 529

Post by blevine » Wed Jun 13, 2018 6:53 pm

I don’t see how NYS can tax you on this.

mcraepat9
Posts: 878
Joined: Thu Jul 16, 2015 11:46 am

Re: direct rollover from NY 529

Post by mcraepat9 » Wed Jun 13, 2018 7:10 pm

Have not done this but I do recall looking into it in the past - I think the earnings piece is taxable by NYS regardless of the federal income tax treatment. If I were you I would leave it where it is.

See page 56: http://cdn.unite529.com/jcdn/files/NYD/ ... ooklet.pdf


See page 16-17 (instructions for line 22 of IT-201):
https://www.tax.ny.gov/pdf/current_forms/it/it201i.pdf

See also:
https://forum.savingforcollege.com/t/ba ... rkers/9638
Amateur investors are not cool-headed logicians.

stanguy
Posts: 5
Joined: Fri Mar 02, 2012 1:37 pm

Re: direct rollover from NY 529

Post by stanguy » Thu Jun 14, 2018 10:50 am

I understand that for NY residents it is taxable at the state level.

What I'm not clear is the status for non-residents who otherwise don't have any reason to file a NY tax return of any kind.

mcraepat9
Posts: 878
Joined: Thu Jul 16, 2015 11:46 am

Re: direct rollover from NY 529

Post by mcraepat9 » Thu Jun 14, 2018 10:55 am

Nothing in the guidance indicates that this only applies to individuals who are otherwise required to file a NYS income tax return.
Amateur investors are not cool-headed logicians.

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