ATLANTA – Georgia taxpayers who don’t use all the money saved in the state’s Path2College 529 Plan for education-related expenses now have another option for how to utilize the funds without penalty. Some of the funds now may be eligible to be rolled over into a Roth IRA.
The SECURE 2.0 Act of 2022 created this option for those saving in 529 Plans, and while this added feature provides more flexibility, there are limitations associated with the option. For example, rollovers are permitted only to a Roth IRA in the name of the 529 account’s beneficiary (the child/student). The 529 account must be in existence for at least 15 years, and no contributions or earnings for the last five years may be rolled over. The lifetime limit for rollovers to a Roth is $35,000. Rollovers will not be subject to the earnings limitation but will be limited to the annual maximum contribution limit, which for 2024 is $7,000.
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