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][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

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

Fair point, I wouldn't take financial advice from you:

1.  I know the 12 month rollover limitation.  Because of that our rollover date creeps forward a bit each year.  We started in January years ago and do it in March now.  Every year it goes forward about 10 days- I send the form in the day after Vanguard says it received the funds the year before.  I also properly report it all on my DC and federal taxes properly.  And yes we have separate plans for each kid.

2.  If you actually check the DC plan webpage, the fee is $10/account/year for DC residents, no matter the amount in the account.

https://www.dccollegesavings.com/home/faqs.htm

"What are the fees associated with the DC College Savings Plan?
The DC College Savings Plan has no commissions, loads, or sales charges. The total annual asset-based fee varies from 0.15% to 0.80%, depending on the Portfolio you choose. Each account is also subject to an Annual Maintenance Fee of $10 for DC Residents and $15 for non-DC residents."[/quote]

Sorry, that was a bad link to the DC 529 FAQ.

https://www.dccollegesavings.com/home/faqs.html[/quote]

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