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Redepositing a Refund


Congress passed legislation in December 2015 that made three changes to 529 accounts. In one change, the legislation allows certain amounts withdrawn from a 529 account to be redeposited to a beneficiary’s account without penalty or inclusion as a nonqualified distribution if it has been refunded by the educational institution. This is helpful when a student becomes ill and withdraws shortly after the start of a semester, or has overpaid for some reason. Funds must be recontributed within 60 days of the refund. Important Note: If you received a qualifying refund during 2015, even if more than 60 days ago, you may redeposit those funds by FEBRUARY 16, 2016. If you decide to deposit a qualifying refund, please inform us at or before the time you make the deposit, in writing, by email, fax (1-888-591-1334), or letter (9001 Arboretum Parkway N Chesterfield VA 23236).

FAQs: 2015 Legislative Impacts to 529 Plan Accounts (pdf)  

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