Recapture tax for DC 529 plan
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Anonymous
| We opened a DC 529 plan for DS three years ago to get the tax benefits. Now that our balance amount has grown significantly, I'm look at the the fees and am realizing that they do not make up for the tax break (not to mention the relatively lower returns of the DC 529.) I am considering rolling over our DC 529 to the UT or NV 529 plan, but then read something about a recapture tax, whereby we would have to pay some level of tax to DC for rolling over to a new plan. Could someone explain how this works and what the tax rate would be? TIA! |
Anonymous
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The principal portion of nonqualified withdrawals from this plan, and rollovers within two years of account opening, are included in District of Columbia taxable income to the extent of prior District of Columbia tax deductions. |