Iowa Admin. Code r. 781-16.13 - Qualified rollover
This rule establishes the procedures for the payment of a
(1) The account
owner must initiate a rollover and must file the appropriate form with the
contractor .
(2) Qualified rollovers
will be paid in one of the following ways once the form has been received by
the contractor :
a. Directly to the account
owner , provided that within 60 days of such distribution, the funds are
recontributed from the account owner as described in paragraph
16.13(2)"b," "c" or "d."
b. Directly to another qualified tuition
program for the benefit of the designated beneficiary .
c. Directly to another account designated
beneficiary under a qualified tuition program who is a member of the family of
the designated beneficiary with respect to which the distribution as
made.
d. Before January 1, 2026,
directly to an ABLE account of the designated beneficiary or a member of the
family of the designated beneficiary .
e. Notwithstanding any of the foregoing, any
qualified rollover to a Roth IRA under Section 529 must be paid in a direct
trustee-to-trustee transfer to a Roth IRA maintained for the benefit of such
designated beneficiary .
(3) Rollovers to a Roth IRA with respect to a
designated beneficiary for such taxable year and all prior taxable years may
not exceed thresholds set out in Section 529.
(4) Each qualified rollover will be comprised
partly of contributions and partly of earnings, based upon the same proportion
that contributions and earnings comprise the account owner 's account at the
time of the rollover.
(5) Funds
that are distributed to an account owner pursuant to this rule shall be
reported to the IRS on a 1099-Q in the tax year in which the rollover or
withdrawal is made. The beneficiary will receive the 1099-Q for any withdrawal
or rollover paid to the beneficiary . The individual receiving the 1099-Q must
determine whether the rollover was qualified or nonqualified.
(6) The Iowa state income tax treatment of a
qualified rollover from an account shall be as set forth in Iowa Code chapter
422. A rollover that is not a qualified rollover shall be treated as a
nonqualified withdrawal .
Notes
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The Iowa state income tax treatment of a