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An ABLE account, also known as a 529 ABLE or 529A account, is a state-run savings program for eligible people with disabilities in the United States. Rules governing ABLE accounts are codified in Internal Revenue Code section 529A, which was enacted by the Achieving a Better Life Experience (ABLE) Act in 2014.
The Tax Cuts and Jobs Act also allowed rollovers from 529 plans to ABLE accounts, as long as the ABLE account beneficiary is the original 529 beneficiary or a qualified family member. The allowed annual rollover amount is set at the standard IRS gift tax exemption, less any other contributions made in the current tax year. [17]
But don’t think the 529 rollover is a loophole to save extra for retirement; there are rules that limit the conversions. Here’s what you should consider when converting your 529 funds to a Roth IRA. The Roth IRA receiving the funds must be in the name of the 529 plan beneficiary. The 529 plan must be open for at least 15 years.
Starting in 2024, unused 529 funds can be rolled into a Roth IRA tax-free, thanks to the SECURE 2.0 Act, giving families more flexibility with college savings.
It's important to know exactly how 529 plans work. Home & Garden. Lighter Side
Key rules apply to the conversion: The 529 plan must be open for at least 15 years before it can be rolled over into a Roth IRA and there’s a $35,000 lifetime limit on rollovers. Bottom line. A ...
The 529 education savings plan is getting a lot more interesting in 2024. Starting this year, unused money in a 529 plan can be converted into a Roth IRA, eliminating one of the major defects in ...
“529 savings accounts are an incredible tool that provides savers with a combination of state income tax deductions, tax-deferred savings, and tax-free distributions for qualified educational ...