The Secure 2.0 Act passed a rule that allows for Roth distributions to be paid from a 529 for a beneficiary (see Section 126). There is a lifetime max of $35K that can come from 529s, and of course we have to follow the annual Roth Contribution Limits (meaning we can't put the lump sum of $35K into her account asap, all at once, of course). For example in 2024 the limit is $7K max subject to income qualifications, and so on.
Assuming my child qualifies to contribute and has the funds in their 529 and chooses to do so, there is another catch.
It states the Roth must have been open for 15 years.
Tax laws require records to be kept 7 years. Most 529 companies change hands, are bought/sold/transferred, etc. and themselves do not keep records back beyond 7 years. We've tried to trace our child's to it's origin and cannot. We can get to 11 years, but not 15.
We opened his account in 2005 but that 529 plan no longer exists so proving the account is well past 15 years old, no 529 company can trace it back beyond the 11 years. SO, how do we prove to the IRS that the Roth has actually been opened for 15 years to meet the contribution requirement?
Thank you!
