Secure Act 2.0 529 rollover to Roth
Hello,
I have a client that wants to roll their 529 account into her Roth, can that be done? I believe so due a provision under Secure Act 2.0 , client has owned it for more that 15 years and therefore qualifies to convert.
If the answer is yes, does it have to go into its own, segregated Roth, or can it be combined with existing Roth?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2023-03-07 23:48
There are several issues regarding Sec 126 of Secure 2.0 that will have to be clarified by IRS Regs, particularly when a change of 529 beneficiaries are made. Is client the beneficiary, and if so will client have the earned income required for a Roth contribution? After the Regs and all the reporting technicalities have been published it’s not clear that this provision will be ready for launch in Jan, 2024. If client meets all the requirements for this transfer, there is no reason that a separate Roth account would be required to receive the transfer.