Reply to How long does a deposit have to sit in a DC 529 account to get the tax break?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]You get the deduction immediately.  but if you roll-over within 2 years, the DC tax deduction is recaptured.

https://www.dccollegesavings.com/home/faqs.html#collapseare-there-any-special-tax-benefi[/quote]

[b]We do this every year[/b]- make a contribution, then a few weeks later, roll it over to our Vanguard 529.  The money doesn't have to sit for any specified amount of time as long as THE ACCOUNT is more than 2 years old.

"If an account owner makes a non-qualified distribution or certain transfers or rollovers to another state’s program [b]within 2 years of opening the account[/b], the amount of the deduction may be "recaptured" and included in the account owner’s DC income."

[/quote]

This doesn't make sense for a variety of reasons. 
1. IRS rules (not DC and non-negotiable) say one tax-free rollover [u]per beneficiary[/u] every 12-month period. Unless you only have one plan for each kid, what you are doing is NOT tac free for at least one of your accounts.
2. DC 529 has a fee for account balances less than $15k (I forget the actual #). There is no economic argument for paying a fee if you can avoid it by leaving small amounts in your DC account

Please don't take financial advice from DCUM!!![/quote]

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