Rollover From a QTP to an ABLE Account
QTP distributions made after Dec. 23, 2017 to the ABLE account of the designated beneficiary or a family member of the beneficiary won’t be taxable if:
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The distributed funds are contributed to the ABLE account within 60 days of the withdrawal from the QTP and
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That distribution plus all other contributions to the ABLE account for the year that are subject to the annual gift tax exclusion do not exceed that limitation.
A direct transfer or rollover that would result in the gift tax limitation being exceeded would be subject to income tax plus a 10% penalty.
This rollover provision was originally only available 2018 through 2025; OBBBA has made it permanent. The amount of the rollover is limited, when combined with other contributions, to the annual ABLE account maximum.