If the 529 Rollover to Roth were for the tax year 2024, it would be included in the 2024 tax year. Funds from an established 529 account can be transferred tax-free and penalty-free to a Roth IRA for the beneficiary of the 529 account. The distributions would not be taxable if the following rules are met:
- The 529 account must have been open for at least 15 years.
- The beneficiary of the 529 account and the owner of the Roth IRA must be the same person.
- The amount of the rollover is limited:
- Annual rollovers are subject to applicable Roth IRA contribution limits. $ 7000- $8000( 50 or older)
- Rollover amounts from all 529 plan accounts may not exceed $35,000. Lifetime limit
- The money transferred must have been in the account for at least five years, and the amount can't exceed your balance from five years prior.
- A Roth rollover from my529 must be paid in a trustee-to-trustee transfer. An account owner can't withdraw money for themselves and then transfer it to a Roth IRA account.
@ClarkCGA
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