What is a nonqualified withdrawal?

Nonqualified withdrawal

This is a withdrawal or distribution from a CollegeChoice 529 education savings plan that is
  • not a qualified withdrawal
  • a withdrawal or distribution from an account that is closed within 12 months after the account is opened
  • a rollover distribution or transfer from the CollegeChoice 529 education savings plan to any other Code Sec. 529 plan

Qualified Withdrawal

This is a withdrawal or distribution from a CollegeChoice 529 education savings plan account that is made
  • to pay for qualified higher education expenses
  • because of the death or disability of an account beneficiary
  • because an account beneficiary received a scholarship that paid all or part of their qualified higher education expenses
  • because of a transfer of funds by the plan from one third party custodian to another

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