Rollover from 529 to Roth IRA
Is it correct that a 529 account must have been opened for 15 years prior to rolling any unused funds to a Roth IRA? Do the funds themselves need to have been in the account for 15 years? Or just that the account needs to be opened for 15 years. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2023-11-15 22:28
The account must have been maintained (opened) at least 15 years prior to the distribution, and the transfer is limited in amount to the balance in the account 5 years prior to the transfer. If the 529 account was rolled over to a different account, it is not yet clear whether the newer 529 would get credit for the holding period of the prior plan. There are several other issues about this provision that the IRS needs to clarify before these transfers can be made. It is clear that this provision will not be ready for implementation anytime soon.