Got duplicate 1099Qs after 529 rollover to Roth IRA was rejected

Thanks for the info. I have a similar situation but with a smaller amount. Do you know if there's a specific form or process for documenting the recontribution when filing taxes? Also, does the timing matter? My returned check took almost 4 weeks to be redeposited.

There's no specific IRS form for documenting a 529 recontribution. You would report both 1099-Qs as received, but then include a statement explaining the situation. Most tax software allows you to add explanatory statements to your return. The timing generally doesn't matter as long as the funds were actually returned to the 529 plan. The 4-week processing time is normal and shouldn't create any issues. Just make sure you keep all documentation showing the original distribution, the rejection/return by the financial institution, and the redeposit into the 529 plan.

Did you upload the actual 1099-Q forms to the system? I'm worried about privacy with these online services. Also, did they actually help with the Roth IRA rollover part specifically?

I'm always skeptical of these online tax services. How does it compare to just asking a tax professional? My sister had a similar 529 issue and her CPA handled it easily but charged her $200 just for that one question.

Yes, I uploaded the actual 1099-Q forms along with statements showing the returned funds. They use bank-level encryption, and honestly, it's no different than uploading to TurboTax or H&R Block software. They were able to help with the specific rollover situation and pointed out exactly which rules applied. Compared to a tax professional, it was much more affordable and actually faster. My neighbor paid nearly $300 for a CPA consultation on a similar issue. The service gave me the same guidance but with detailed documentation I could reference later when I actually filed my taxes.

Wait, how does this actually work? Does someone else talk to the IRS for you? I thought that wasn't allowed because of privacy concerns.

This sounds too good to be true. The IRS hold times are legendary. I've waited 3+ hours multiple times. If this really works, why isn't everyone using it?

No, they don't talk to the IRS for you. They basically have a system that waits on hold for you and then calls you when an actual human at the IRS picks up. Then you're connected directly to the IRS agent and handle the conversation yourself. No privacy issues since you're the only one speaking with the IRS. I was skeptical too about the wait times. From what I understand, they use some kind of automated system to manage multiple hold lines simultaneously. I can only speak to my experience, but it saved me from wasting an entire day listening to the IRS hold music. The peace of mind from speaking directly with an agent about my 529 issue was absolutely worth it.

Thanks for mentioning the lifetime limit - I had completely forgotten about that! This is actually our first 529-to-Roth rollover, so we're well under the $35,000 cap. Do you know if I need to report somewhere that we've used up $6,700 of our lifetime limit? I'm not seeing any specific form or box to track this.

There's currently no specific tracking mechanism on tax forms for the $35,000 lifetime limit. It's one of those things you need to track yourself, similar to backdoor Roth contribution history. When you file your taxes, you'll just report the qualified distribution from the 529 and the contribution to the Roth IRA separately. The IRS doesn't have a centralized system monitoring your progress toward the $35,000 cap, so keeping your own records is essential. I recommend creating a simple spreadsheet with dates, amounts, and which 529/Roth accounts were involved for each rollover you do.

That's not entirely accurate. While the beneficiary does need to be under 30 for the 529-to-Roth rollover, there's one exception: the age limit doesn't apply if the beneficiary is disabled. Just wanted to clarify in case someone reading has a special situation.