Glossary

1 5 A B C D E F G H I L M N P Q R S T U W Y
1 5 A B C D E F G H I L M N P Q R S T U W Y

R

  • Recapture

    Recapture refers to the recovery of state income tax benefits attributable to a non- qualified distribution or a rollover to another state’s plan.

  • Rollover

    A rollover is a distribution from one 529 plan that is reinvested in another 529 plan for the same beneficiary within 60 days. A rollover is allowed once per 12-month period without incurring federal income tax. Some plans treat a rollover to an out-of-state plan as a non-qualified distribution for state tax purposes, resulting in state income tax on the earnings portion of the distribution, plus recapture of state income tax benefits previously received (In New Mexico, you are required to pay back previous tax deductions if you roll funds over into another state’s 529 plan).

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