Secure Act Info Center
Understanding recent federal 529 changes
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On December 20, 2019, the Further Consolidated Appropriations Act, 2020 was signed into law. This bill included new provisions that allow 529 plan account owners to do two things tax-free:
- pay for certain expenses associated with registered apprenticeship programs
- pay principal and interest on certain qualified education loans for the beneficiary of your account or any of the beneficiary’s siblings (up to $10,000 lifetime limit per individual).
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In December 2022, the federal government enacted SECURE 2.0 of 2022, which delivers dozens of retirement-related provisions. Among them is the ability to make tax- and penalty-free rollovers from your 529 plan into a Roth IRA.
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Before starting a rollover to a Roth IRA, check the requirements that must be met to roll over unused 529 funds. As always, you should consult with your tax, investment, and legal advisors about your personal circumstances.
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In addition to rolling funds into a Roth IRA, you have many options in the event your student doesn’t use all their GET or Invest funds.
- keep the money in the account in case your student decides to continue their education in the future.
- change the beneficiary on the account to another family member.
- hold on to the account and use the funds for your future grandchildren’s education.
- take a non-qualified withdrawal that includes any earnings you have accumulated to date (taxes and penalties will apply).
