Can a 529 plan be rolled over to another state's plan?

A 529 plan can indeed be rolled over to another state's plan, but this action has specific regulations. The correct answer aligns with the guidelines set forth by the IRS, which allows for a rollover of funds from one 529 plan to another within a 12-month period. This is essential because it gives account holders some flexibility to move their funds to potentially benefit from better investment options or lower fees available in a different state's plan.

It's important to understand that while you can roll over funds to another state's plan, the 12-month waiting period is a key aspect. If you attempt to conduct another rollover within that timeframe, it may not qualify for tax-free treatment, which means that any gains could be subject to taxes and penalties. Therefore, the established timeframe is crucial for maintaining the tax advantages associated with 529 plan savings.

The other choices present either incorrect frequencies for rollovers or suggest that no rollovers are permitted, which does not align with the IRS rules. Additionally, the idea that a rollover is only permissible with a change of beneficiary is not universally accurate. While a change of beneficiary is a condition that allows for certain exceptions in other contexts, it does not limit the ability to conduct a rollover to another state's 529 plan every 12 months