529 to Roth IRA
Rollovers simplified
Roth IRA rollovers can benefit families with unused funds
Rolling over funds into a Roth IRA without facing tax penalties can alleviate concerns about saving for college with a 529 account. This is particularly relevant for those worried about what to do with unused funds if a student chooses not to pursue higher education. A 2022 provision allows you to transfer those unused funds, giving your student a head start on their future retirement.
Consult with a tax advisor to discuss potential tax implications
A 529-to-Roth IRA rollover may have tax consequences. Speaking with a qualified tax professional before making a 529-to-Roth IRA rollover can help you understand how a rollover will affect your personal financial circumstances.
Eligibility for a tax-free 529 to Roth IRA rollover
If the following criteria are met, you can make a tax-free rollover from a 529 account to a Roth IRA.
The Roth IRA must belong to the 529 plan’s beneficiary (not the account owner).
The beneficiary of the Roth IRA must meet standard IRA compensation eligibility requirements. Confirm this with a financial or tax advisor.
The 529 account must have been open for at least 15 years. Accounts created within 15 years of the rollover date do not qualify.
Changes to the 529 account (such as owner transfers, beneficiary updates, or rollovers between plans within the past 15 years) may impact eligibility. Always check with a tax professional before proceeding.
Which 529 funds qualify for rollovers, and how much can I roll over?
Only funds contributed to the 529 account more than five years before the rollover date, along with their earnings, qualify for tax-free rollovers.
The annual limit for rollovers from a 529 plan to a Roth IRA is based on annual IRA contribution limits (including funds contributed from outside the plan).
The contribution limit for tax year 2025 is $7,000 if the Roth IRA account owner is under 50. The limit is $8,000 for account owners 50 or older.
Current law allows you to roll over a lifetime maximum (per beneficiary) of $35,000 from a 529 to a Roth IRA.
How to complete a 529 to Roth IRA rollover
You must roll funds directly from your 529 account into a Roth IRA.
GET to Roth IRA rollover
Use the GET rollover to Roth IRA form to initiate a direct rollover from GET to an existing Roth IRA account established for the Student Beneficiary.
WA529 Invest to Roth IRA rollover
Use a WA529 Invest rollover form to initiate a direct rollover from WA529 to an existing Roth IRA account established for the Student Beneficiary.
Options beyond rolling funds into a Roth IRA
If plans change or your student doesn’t use all their GET or WA529 Invest funds, you have options.
You can keep funds in your account incase your student decides to continue their education at a later date.
You can change the student beneficiary on your account to another family member.
You can hold on to the account and use the funds for future grandchildren’s education.
If these options don’t work for you, you can always take a non-qualified withdrawal that includes accumulated earnings. Keep in mind that non-qualified withdrawals are subject to federal taxes and penalties.