Federal law allows 529 plan funds to be rolled over to a Roth IRA without penalty (subject to several requirements). However, this kind of rollover is subject to Vermont’s 10 percent repayment penalty when the funds originate from a VHEIP account.

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us-vt/guidance/vdt/tax-credits-and-adjustments-for-individuals/block-5 — Can I roll VHEIP funds over to a retirement plan account? · Axiom

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Vermont
Guidance
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Tax Credits And Adjustments For Individuals
Block 5

Can I roll VHEIP funds over to a retirement plan account?

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