FAQs: How to Change Your 529 Plan’s Investment Instructions
Why can I change my current allocations only twice per calendar year?
This is an IRS regulation; 529 college savings plans are designed for saving money for college—not for active trading.
If I change my current allocation, will this transaction be taxed?
No, a portfolio reallocation is considered a nontaxable event. However, because the assets are sold and bought you will receive a confirmation statement.
Does changing my current allocations affect future allocations?
No, changes to your current or future allocations occur independently and do not affect each other.
How do I change the beneficiary on my plan?
If your designated beneficiary (student) decides not to attend college, you can change the beneficiary on your plan. However, the new beneficiary must be an eligible family member of the original beneficiary to avoid federal income taxes and the 10% federal penalty.