The SECURE 2.0 Act of 2022 opened up something that had previously been impossible: rolling over money from a 529 college savings plan to a Roth IRA without paying tax or penalty. The new rollover route went live on 1 January 2024, and it has rapidly become one of the most-asked-about features in US tax-advantaged-account strategy.
The 15-year rule is the most important and most often-misunderstood condition on the new rollover. This is a focused explainer of exactly how the 15-year rule works, the other conditions it sits alongside, and the practical mistakes to avoid.
The short version
- The 529 plan account must have been open for at least 15 years before any 529-to-Roth rollover.
- The 15-year clock applies to the 529 account itself, not the beneficiary’s age or the contribution history.
- Contributions (and earnings on those contributions) made in the last 5 years cannot be rolled over. This is a separate rule from the 15-year rule.
- The beneficiary of the 529 and the owner of the receiving Roth IRA must be the same person.
- Lifetime rollover cap: $35,000 per beneficiary.
- Annual rollover cap: the Roth IRA contribution limit for that year ($7,000 in 2026, $8,000 if age 50+), reduced by any direct Roth IRA contributions the beneficiary makes that year.
- The beneficiary must have earned income at least equal to the rollover amount in the year of the rollover (the same rule that applies to direct Roth IRA contributions).
- Beneficiary changes can reset the 15-year clock. This is the most contested area of the rule and one the IRS has not yet fully clarified.
What the 15-year rule actually says
Section 126 of the SECURE 2.0 Act amended the Internal Revenue Code to permit certain 529 plan funds to be rolled over to a Roth IRA. The relevant statutory text requires that the 529 account must have been “maintained” for at least 15 years before any rollover. Three things follow from that:
1. The clock runs on the 529 ACCOUNT, not the contributions
The 15-year requirement attaches to the account itself, not to any specific contribution within it. An account opened in January 2010 with a single $50 contribution and then ignored for 14 years still satisfies the 15-year rule for rollovers in January 2025 onwards.
2. The 5-year contribution exclusion is a separate rule
Contributions made in the most recent 5 years (plus the earnings on those contributions) cannot be rolled over. This sits alongside the 15-year rule, not as part of it. So even on an account that has been open 30 years, money put in within the last 5 years stays put.
Practical example: A 529 account opened in 2008 received contributions every year from 2008 to 2024, plus a final contribution in 2024. As of 2026, contributions and earnings on contributions made in 2022, 2023, and 2024 (within the 5-year window) cannot be rolled over. Contributions and earnings from 2008 to 2021 are eligible (subject to other limits).
3. The 15-year clock is per ACCOUNT, not per BENEFICIARY
This is the contested area. The statute says the 529 account must be maintained for 15 years. The IRS has not yet issued definitive guidance on what happens to the clock when the beneficiary is changed (e.g. from one child to a sibling, or from a child to a parent). Several interpretations are circulating among tax practitioners:
- Strict interpretation: Any beneficiary change resets the 15-year clock, because the IRS may treat the post-change account as effectively new.
- Lenient interpretation: The clock attaches to the account, so beneficiary changes do not reset it.
- Middle ground: Beneficiary changes to a closer relative (sibling, parent) do not reset; changes to a more distant relative or unrelated person do.
Until the IRS issues final regulations, the most conservative approach is to assume beneficiary changes within the last 15 years may invalidate a 529-to-Roth rollover. If you have a 529 with a long history but recently changed beneficiaries, consult a tax professional before attempting a rollover.
The other conditions in plain English
Same person rule
The beneficiary of the 529 and the owner of the receiving Roth IRA must be the same person. So a parent cannot roll their child’s 529 into the parent’s Roth IRA. They can, however, change the 529 beneficiary to themselves (subject to the beneficiary-change clock question above), wait, and then roll.
Lifetime $35,000 cap
Across all rollovers in a beneficiary’s lifetime, the cumulative amount cannot exceed $35,000. This is a lifetime cap, not an annual one. Most beneficiaries will not roll the full $35,000 in a single year because of the annual contribution-limit constraint (below).
Annual contribution-limit constraint
In any tax year, a 529-to-Roth rollover is treated as if it were a Roth IRA contribution for that year. The annual rollover cap is therefore the Roth IRA contribution limit for that year ($7,000 in 2026, or $8,000 with the age-50 catch-up), reduced by any direct Roth IRA contributions the beneficiary makes that year.
So at the 2026 contribution limit, it would take a minimum of 5 years to roll the full $35,000 ($7,000 × 5 = $35,000). In practice many beneficiaries will roll less per year because they want to keep some Roth IRA contribution room for direct contributions.
Earned income requirement
The beneficiary must have earned income at least equal to the rollover amount in the year of the rollover. This is the same rule that applies to any Roth IRA contribution. A college student with no income, or a child too young to work, cannot benefit from a rollover that year regardless of how much sits in the 529.
No income-limit constraint
Unusually, the Roth IRA income limits (the modified AGI phase-out) do NOT apply to 529-to-Roth rollovers. A high earner who cannot contribute directly to a Roth IRA because of the income limits CAN still receive a 529-to-Roth rollover. This is one of the more attractive features of the new rule, particularly for beneficiaries who are well into their careers by the time the 15-year clock matures.
Worked example: planning ahead
Consider a typical use case. Parents open a 529 plan for a newborn in 2010 with the child as beneficiary. They contribute regularly through the child’s college years. At some point the child finishes education with leftover 529 balance, perhaps because they received scholarships, attended a less expensive college, or did not pursue advanced degrees.
By 2025, the child is 15 and the account is 15 years old. The 15-year rule is satisfied. Suppose by 2028 the child is 18 with $40,000 sitting in the 529 and has started a job in college earning enough to cover the rollover amount.
The rollover sequence might be:
- 2028: Roll $7,000 (the Roth IRA contribution limit at that future date, illustratively) to the child’s Roth IRA.
- 2029: Roll another $7,000.
- 2030: $7,000.
- 2031: $7,000.
- 2032: $7,000.
- Total rolled: $35,000 (the lifetime cap).
- Remaining $5,000 in 529: stays for future education needs, or can be withdrawn with the standard non-qualified penalty + tax on earnings.
The strategic value: the child ends up with $35,000 plus decades of compounding inside a Roth IRA, started in their twenties, that they would have otherwise been unable to build from a single high school summer job alone.
Mistakes to avoid
- Don’t open a brand-new 529 today thinking you can roll to a Roth in 5 years. The 15-year clock has to run first. New 529s started in 2026 cannot be rolled until 2041 at the earliest.
- Don’t change beneficiaries casually if you intend to roll to Roth. The IRS has not clarified whether beneficiary changes reset the 15-year clock. Conservative practice assumes they may.
- Don’t expect to roll contributions made recently. The 5-year contribution exclusion catches money put in within the last 5 years regardless of how old the account is.
- Don’t try to roll into someone else’s Roth. The same-person rule is strict. If you want to roll a child’s 529 to your own Roth, you need to change beneficiary to yourself first, and then the 15-year-clock question arises.
- Don’t forget the earned income requirement. A young child or non-working spouse cannot receive a rollover in a year they have no earnings. Even a 2-year-old with a 17-year-old 529 cannot roll if they have no earned income.
- Don’t try to roll funds the beneficiary already withdrew for non-education purposes. Once funds leave the 529 as non-qualified withdrawals, they cannot be re-deposited and rolled.
FAQ
I opened a 529 in 2024. When can I first do a rollover?
2039 at the earliest. The account must have been open at least 15 years before any rollover. And even then, contributions made in 2034-2038 (the most recent 5 years at that point) and the earnings on them would be excluded.
Does the 15-year clock count the year the account was opened?
The IRS calculates the period from the date the account was established. There is no settled IRS position on whether a partial year counts as a full year for this purpose. The conservative approach is to count full years from the opening date, so an account opened in March 2010 first becomes rollover-eligible in March 2025.
What if my state offers a different version of the 529 rollover rule?
The federal rules apply for federal tax purposes. Some states have their own rules about whether a 529-to-Roth rollover triggers a state tax recapture of any previous state deductions. Check your state’s tax authority before rolling, particularly if your state gave you a state income tax deduction or credit for past 529 contributions.
Can I split a rollover across multiple Roth IRAs?
Yes, but the annual contribution limit applies across all your Roth IRAs combined. Splitting does not give you more rollover room.
What happens if I exceed the $35,000 lifetime limit?
The excess is treated as an excess Roth IRA contribution, subject to a 6% per-year excise tax until corrected. You would need to withdraw the excess (plus earnings) by the tax filing deadline to avoid ongoing penalty. Most providers will not knowingly process a rollover that exceeds the limit, but the responsibility for tracking lifetime totals sits with the beneficiary.
Is the rollover taxable?
No. A qualified 529-to-Roth rollover is tax-free at the federal level. State tax treatment may vary, particularly in states that previously gave a deduction for the contributions being rolled out.
How do I actually execute the rollover?
Contact your 529 plan administrator and your Roth IRA custodian. Most major providers (Fidelity, Vanguard, Schwab, T. Rowe Price) have formal 529-to-Roth rollover request forms. The rollover must be done as a trustee-to-trustee transfer; you cannot withdraw to your bank account and re-deposit into the Roth.
Where to go from here
- IRS guidance on 529 plans: IRS 529 plans Q&A
- SECURE 2.0 Act, Section 126: the statutory basis for the 529-to-Roth rollover (see Pub. L. 117-328)
- Related Savvy Investor guides:
This article explains the 15-year rule on 529-to-Roth IRA rollovers as of 13 May 2026. IRS regulations on the 529-to-Roth rollover route have not yet been fully finalised in all details, particularly around beneficiary changes. This is general educational information, not personal tax advice. Consult a qualified tax professional or your 529 plan administrator before executing a rollover.
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