State taxpayers have new way to roll over unused Path2College funds

ATLANTA — Georgia taxpayers who don’t use all the money saved in the state’s Path2College 529 Plan for education-related expenses now have another option for how to utilize the funds without penalty. Some of the funds now may be eligible to be rolled over into a Roth IRA.

The SECURE 2.0 Act of 2022 created this option for those saving in 529 Plans, and while this added feature provides more flexibility, there are limitations associated with the option. For example, rollovers are permitted only to a Roth IRA in the name of the 529 account’s beneficiary (the child/student). The 529 account must be in existence for at least 15 years, and no contributions or earnings for the last five years may be rolled over. The lifetime limit for rollovers to a Roth is $35,000. Rollovers will not be subject to the earnings limitation but will be limited to the annual maximum contribution limit, which for 2024 is $7,000.

Those considering rolling funds over to a Roth IRA should investigate the limitations and rules, which can be found on the Path2College website (www.Path2College529.com). Account owners also should consult with a tax professional if they are considering this option.

To request a rollover to a Roth IRA, first contact a Roth IRA administrator to determine their ability and requirements to receive the rollover. Then, submit any Roth IRA forms required from your administrator along with the Path2College 529 Plan Rollover to Roth IRA form. Forms and more information can be found on the Path2College website in the withdrawals section under FAQs.

For more information about the Path2College 529 Plan, to open a college savings account or for questions about the new Roth IRA rollover option, visit www.Path2College529.com or call (877) 424-4377.

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