Rollovers & Other Transfers

Assets can be rolled over from one education IRA to another. The designated beneficiary can be changed and the beneficiary's interest can be transferred to a spouse or former spouse because of divorce.

Rollovers

Any amount withdrawn from an education IRA and rolled over to another education IRA for the benefit of the same beneficiary or a member of the beneficiary's family who is under age 30 is not taxable. An amount is rolled over if it is paid to another education IRA within 60 days after the date of the withdrawal.

Education IRA Withdrawals at a Glance

Members of the beneficiary's family. The beneficiary's spouse and the following individuals (and their spouses) are members of the beneficiary's family.

• The beneficiary's child, grandchild, or stepchild.
• A brother, sister, half brother, half sister, stepbrother, or stepsister of the beneficiary.
• The father, mother, grandfather, grandmother, stepfather, or stepmother of the beneficiary.
• A brother or sister of the beneficiary's father or mother.
• A son or daughter of the beneficiary's brother or sister.
• The beneficiary's son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

Only one rollover per education IRA is allowed during the 12-month period ending on the date of the payment or withdrawal.

Changing the Designated Beneficiary

The designated beneficiary can be changed to a member of the beneficiary's family (defined earlier). There are no tax consequences if, at the time of the change, the new beneficiary is under age 30.

Transfer Because of Divorce

If a spouse or former spouse receives an education IRA under a divorce or separation instrument, it is not a taxable transfer. After the transfer, the spouse or former spouse treats the education IRA as his or her own.

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