SECURE Act 2.0 (Section 126) Allow for the Transfer a 529 Plan to a Roth IRA Including a Roth IRA LLC But Limits Apply to Prevent Abuse

Thanks to SECURE 2.0 which was signed by President Bident in December of 2022, 529 Plan assets may be transferred to a Roth IRA including a Roth IRA LLC, but a dollar threshold applies as well as other rules–all are discussed below..

What is a 529 Plan?

A 529 plan is used to save for paying qualified education expenses. A qualified expenses include tuition expenses for elementary, middle, high school (private, public, or religious), and college.

SECURE 2.0 Rules for Transferring Unused 529 Plan Assets to a Roth IRA

1. The total liftime amount that may be transferred to a Roth IRA is $35,000.
2. The 529 plan has to be in place for 15 years before it can be transferred to a Roth IRA.
3. The amount of 529 plan funds that may be transferred to the Roth IRA on a yearly basis is impacted by the beneficiaries annual Roth IRA contribution limit so as not to exceed the annual Roth IRA contribution limit.

To learn more, click here to view Section 126 of the SECURE 2.0 Act which starts on page 2161 of 4155.

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