Treasury, IRS announce special relief for certain rollovers to or from Maryland Prepaid College Trust accounts
Generally, federal tax law only allows one tax-free rollover in a 12-month period from one qualified tuition program to another for the benefit of the same beneficiary. The notice issued today provides that the 12-month limitation for taxpayers making such rollovers will not be asserted by the IRS provided the rollover in question meets the criteria described in Notice 2024-23.
Under the newly issued notice, a qualified tuition program distribution will be treated as a qualified rollover (as defined in the notice) if the following criteria are met:
- The taxpayer makes a rollover to or from the designated beneficiary's Maryland Prepaid College Trust account before Jan. 1, 2025;
- The 12-month limitation described above would otherwise apply to the rollover to or from the Maryland Prepaid College Trust account; and
- The rollover was preceded by a qualified rollover from that same designated beneficiary's Maryland Prepaid College Trust account after Dec. 31, 2021.
If a taxpayer eligible for the relief described in Notice 2024-23 receives a Form 1099-Q that includes a distribution that is treated as a qualified rollover under Notice 2024-23, then the amount corresponding to the qualified rollover is not includible in gross income, and the taxpayer is not required to report the amount on the taxpayer's tax return.