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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.
As of 2024, you may be allowed to roll over up to $35,000 in unused funds from your 529 plan into a Roth IRA account for the beneficiary — the idea being that these unused funds can help ...
Starting this year, you can now roll over unused 529 funds to a Roth IRA. But don’t think the 529 rollover is a loophole to save extra for retirement; there are rules that limit the conversions.
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]
The eligible rollover amount must have been in the 529 account for at least five years prior to the rollover date. The funds must be rolled over to a Roth IRA owned by the 529 account beneficiary.
The 529 plan must be open for at least 15 years. You cannot convert 529 contributions made within the past five years (or the earnings on those contributions). The 529 funds you roll over count toward your IRA annual contribution limit. You can move a maximum of $35,000 from a 529 plan to a Roth IRA during your lifetime.
It's important to know exactly how 529 plans work. Home & Garden. Lighter Side
Thanks to new rules set out in the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022, unused 529 funds can be transferred to the 529 beneficiary’s Roth IRA account.
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