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Tax-free rollover from 529 plans to Roth IRAs will be allowed starting in 2024

[1]In December 2022, Congress passed the Consolidated Appropriations Act of 2023, an omnibus spending bill that includes the much-anticipated and long-awaited retirement bill known as SECURE Act 2.0.

One of the provisions of SECURE Act 2.0 that has grabbed a disproportionate percentage of headlines is the introduction of the ability, beginning in 2024, for some individuals to move 529 plan money directly into a Roth IRA. This new transfer pathway comes with a number of conditions that must be satisfied for the transfer to be valid and that limit the ability to take advantage of (or abuse) the provision.

The conditions include:

Taking advantage of this new 529 transfer option will require close attention to the program requirements; please contact your ShindelRock tax professional [2] for more details.