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Roll Over Unused 529 Funds to Roth IRA Accounts



Effective 1/1/2024, 529 Plan Account Owners Are Able to Roll Over Unused 529 Funds to Roth IRA Accounts.

In December 2022, as part of the government’s year-end spending bill, the SECURE 2.0 Act of 2022 was signed into law by the President. This Act permits an additional type of qualified distribution for 529 plan assets by allowing limited tax and penalty-free 529 plan rollovers to Roth IRA accounts 1/1/2024. This increased flexibility may help to address the needs of account owners whose beneficiaries do not pursue higher education or who have leftover funds within their 529 account due to their beneficiary receiving a scholarship. There are several key provisions of the Act as it relates to these rollovers, including:

  • The 529 account must have been open for more than 15 years
  • The eligible rollover amount must have been in the 529 account for at least 5 years
  • The annual rollover limit is subject to Roth IRA annual contribution limits ($6,500 for 2023; $7,500 for individuals age 50 and older)
  • There is a lifetime rollover limit of $35,000 for each 529 account beneficiary
  • Rollovers can only be made to the Roth IRA account owned by the named 529 account beneficiary
  • Note that Roth IRA income limits do not apply for this type of contribution

This enhancement became effective January 1, 2024. As a reminder, funds within 529 plans can be used to cover many different education-related expenses which are summarized here and account owners have the ability to transfer a 529 account to another qualifying family member without incurring taxes or penalties. Please see the Offering Statement for additional information. The 529 industry is continuing to examine and work through aspects of the SECURE 2.0 Act legislation, including clarifications and operational items, and additional information will be provided as it becomes available. In addition, whether a 529 rollover to a Roth is also a qualified distribution for state taxes will depend on each state.


West Virginia College Prepaid Tuition and Savings Program Board of Trustees Logo

SMART529 is a college savings plan offered by the Board of Trustees of the West Virginia College and Jumpstart Savings Programs and administered by Hartford Funds Management Company, LLC ("HFMC").

Investments in SMART529 are not guaranteed or insured by the State of West Virginia, the Board of Trustees of the West Virginia College and Jumpstart Savings Programs, the West Virginia State Treasurer's Office, HFMC, The Hartford Financial Services Group, Inc., the investment sub-advisors for the Underlying Funds or any depository institution and are subject to investment risks, including the loss of the principal amount invested, and may not be appropriate for all investors.

The Hartford SMART529 is available to all investors. West Virginia (WV) provides certain tax advantages to WV taxpayers that invest in The Hartford SMART529. Before investing, an investor should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state’s 529 plan.

This information is written in connection with the promotion or marketing of the matter(s) addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, your clients should consult their own tax or legal counsel for advice.

Investors should carefully consider the investment objectives, risks and charges and expenses of SMART529 and its Underlying Funds before investing. This and other information can be found in the Offering Statement for SMART529 and the prospectuses or other disclosure documents for the Underlying Funds. Please read them carefully before investing or sending money. For a copy of the Board of Trustees of the West Virginia College and Jumpstart Savings Programs privacy policy, please click here. SMART529 college savings plans are distributed by Hartford Funds Distributors, LLC. Member SIPC

"The Hartford" is a registered trademark of Hartford Fire Insurance Company.

"SMART529" is a registered trademark of the Board of Trustees of the West Virginia College and Jumpstart Savings Programs.

"The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries.


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