Rollover from 529 to a roth ira

[Travis Buck]

I have 2 young kids and therefore have two 529 accounts.  Each has a fair amount of money in them. After doing some research on the flexibility of a 529 as compared to a roth, I have decided to open each kid a roth ira. After researching the subject I know I CANNOT roll over the 529 to the roth. If I did, I would pay income tax and 10% penalty.

QUESTION: If my kids took a $5500 distribution each (which is the max roth contribution, and less than the $10400 max allowed by the irs to NOT file an income tax return) would there be any penalties or taxes to be paid other than the 10% early withdrawal penalty?