Good afternoon @johnsonlisa33
I apologize for the delay in getting back to you, but this question has me a bit flummoxed. I called and again reached-out to Florida Prepaid directly to get you an answer because I didn't - and still don't - understand why the Prepaid plan does not allow rollovers. Their response was that there is a technology limitation for taking in rollovers that prevents them from doing qualified rollovers. However, my follow-up question - why can't the client simply make an indirect rollover - has not yet been answered.
My thinking is that you simply cash out the prior plan and contribute the proceeds within 60 days to the prepaid plan. A direct rollover goes directly from trustee-to-trustee, with the check being sent from 529 Plan A to 529 Plan B. An indirect rollover is where you cash out and put the funds back into the 529 within 60 days. Since the Florida Prepaid plan is a 529 Plan sponsored by the state in accordance with federal law, I'm not sure why they do not allow this.
More to come as I get additional information.
This would be the case if the prepaid plan was not a 529 plan, but it is; as above, more to come.
Thank you,
Brian Boswell VP, Research & Development
This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.
