A 529 account that has been open more than 15 years can move at most $35,000 into the beneficiary's own Roth IRA, and only one year's IRA limit at a time. At the 2026 limit of $7,500 that takes five tax years: four rollovers of $7,500 and one of $5,000.
Five years is the floor, not a forecast. A grandparent account opened in January 2011 and fed $3,000 a year through 2022 starts rolling in 2026 and finishes in 2030. The same kind of account funded with $1,000 in 2011 and three $15,000 gifts in 2023 to 2025 also becomes eligible in 2026, but the five-year lookback holds back nearly everything: $1,000 can move in 2026, and the last dollar moves in 2032. A beneficiary whose only income is $4,200 of summer earnings is capped at $4,200 a year and needs nine years.
Every schedule below applies the statute's tests year by year to a stated account. The accounts are hypothetical, the arithmetic is published rules, and none of it is tax or investment advice. The Roth IRA calculator projects what each rolled-over dollar grows to once it is inside the Roth.
The statute, quoted whole
Section 529(c)(3)(E) of the Internal Revenue Code was added by section 126(a) of the SECURE 2.0 Act (Public Law 117-328, division T, December 29, 2022). Section 126(d) applies it to distributions after December 31, 2023. The text below is the current Code as printed by the Office of the Law Revision Counsel, which states that it is current through Public Law 119-136 (October 22, 2026). Subparagraph (E) matches the 2024 edition on govinfo.gov word for word, and the 2025 amendments in Public Law 119-21 (sections 70117, 70413 and 70414) change other parts of section 529 and do not touch this subparagraph. The Code prints the lead-in with the words "so much the portion", and the quote keeps that wording. The original uses a dash after "which"; here the two conditions are set out as a list.
(E) Special rollover to Roth IRAs from long-term qualified tuition programs
(i) In general. In the case of a distribution from a qualified tuition program of a designated beneficiary which has been maintained for the 15-year period ending on the date of such distribution, subparagraph (A) shall not apply to so much the portion of such distribution which
- (I) does not exceed the aggregate amount contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution, and
- (II) is paid in a direct trustee-to-trustee transfer to a Roth IRA maintained for the benefit of such designated beneficiary.
(ii) Limitations
- (I) Annual limitation. Clause (i) shall only apply to so much of any distribution as does not exceed the amount applicable to the designated beneficiary under section 408A(c)(2) for the taxable year (reduced by the amount of aggregate contributions made during the taxable year to all individual retirement plans maintained for the benefit of the designated beneficiary).
- (II) Aggregate limitation. This subparagraph shall not apply to any distribution described in clause (i) to the extent that the aggregate amount of such distributions with respect to the designated beneficiary for such taxable year and all prior taxable years exceeds $35,000.
Subparagraph (A), which the rollover switches off, is the general rule: "Any distribution under a qualified tuition program shall be includible in the gross income of the distributee in the manner as provided under section 72 to the extent not excluded from gross income under any other provision of this chapter." The rolled portion, earnings included, is therefore not taxed under subparagraph (A). The Roth side of the rule lives in section 408A, and three of its provisions decide the annual amount.
408A(c)(2) Contribution limit. The aggregate amount of contributions for any taxable year to all Roth IRAs maintained for the benefit of an individual shall not exceed the excess (if any) of (A) the maximum amount allowable as a deduction under section 219 with respect to such individual for such taxable year (computed without regard to subsection (g) of such section), over (B) the aggregate amount of contributions for such taxable year to all other individual retirement plans (other than Roth IRAs) maintained for the benefit of the individual.
408A(c)(3)(E) Special rule for certain transfers from qualified tuition programs. The amount determined under subparagraph (A) shall be increased by the lesser of (i) the amount of contributions described in section 529(c)(3)(E) for the taxable year, or (ii) the amount of the reduction determined under such subparagraph (determined without regard to this subparagraph).
408A(c)(5)(B) Coordination with limit. (i) In general. A qualified rollover contribution shall not be taken into account for purposes of paragraph (2). (ii) Exception for rollovers from qualified tuition programs. Clause (i) shall not apply to any qualified rollover contribution described in subsection (e)(1)(C).
The deduction limit that 408A(c)(2)(A) points to is section 219(b)(1): "The amount allowable as a deduction under subsection (a) to any individual for any taxable year shall not exceed the lesser of (A) the deductible amount, or (B) an amount equal to the compensation includible in the individual's gross income for such taxable year."
Six tests in the order a schedule applies them
Put the text together and, once the account is old enough and the money moves by direct transfer, each year's rollover is the smallest of four numbers.
The annual ceiling inside that formula is itself a minimum of two things less a subtraction.
The pool is the money contributed before the five-year window plus the earnings attributable to it, and the sum in the lifetime term is everything already rolled over for that beneficiary.
- The account must be old enough. The statute asks for a program "maintained for the 15-year period ending on the date of such distribution." Publication 970 (2025) and Publication 590-A (2025) both say the 529 account must have been open for "more than 15 years." Read literally, the statute is met on the 15th anniversary and the publications on the day after. The schedules use the stricter publication wording, so an account opened in January 2011 first rolls in 2026.
- Only older money moves. The distribution cannot exceed what was "contributed to the program (and earnings attributable thereto) before the 5-year period ending on the date of the distribution." A contribution made on January 1, 2021 counts for a rollover on December 31, 2026, because it is five years and 364 days old. A contribution made on January 1, 2022 does not, and waits until the 2027 rollover.
- The year's limit sets the ceiling. The ceiling is the beneficiary's 408A(c)(2) amount for that year, reduced by every contribution the beneficiary made to any IRA that year. The next section breaks that amount down.
- A lifetime ceiling of $35,000 per beneficiary. The aggregate limitation counts distributions "with respect to the designated beneficiary for such taxable year and all prior taxable years." Section 529 as printed today contains no cost-of-living adjustment for it, so the figure is fixed in the statute, unlike the IRA limit it is paired with.
- The account must hold the money. A rollover cannot exceed the balance, which matters for small accounts and for accounts already drawn down for tuition.
- The money must go by direct trustee-to-trustee transfer into a Roth IRA for the beneficiary. Publication 970 (2025) lists the rollover this way: "A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn't apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit." A payment made to the owner or the beneficiary, who then deposits it, is not a direct trustee-to-trustee transfer.
What sets the annual amount
The annual ceiling has four moving parts, and each one has a table row below.
The dollar limit. The IRS announced in IR-2025-111 (November 13, 2025) that the IRA contribution limit rises to $7,500 for 2026 from $7,000, and the catch-up for age 50 and over to $1,100. The 2024 limit was $7,000 (IR-2023-203) and the 2025 limit was $7,000 (IR-2024-285). The statute rounds the base figure down to a multiple of $500 (section 219(b)(5)(C)(ii)) and the catch-up down to a multiple of $100 (219(b)(5)(C)(iii)), so the limit can only change in steps of $500. The IRS cost-of-living adjustments page lists limits for 2023 through 2026 and nothing for 2027, so the schedules hold every year after 2026 at $7,500. That is an assumption, not a forecast.
Compensation. Because 408A(c)(2)(A) borrows the section 219 deduction limit, the beneficiary's compensation caps the rollover as it caps any Roth contribution: the limit is the lesser of the dollar amount and compensation. Read on its face, a student with $2,000 of wages can receive $2,000 in a year, and a student with no wages can receive nothing. Publication 590-A (2025) states the limit only as "the Roth IRA annual contributions limit" and Publication 970 (2025) as "the annual contribution limit," and neither works a low-income example, so the compensation cap is a reading of the statutory cross-reference. A married beneficiary filing jointly may count a spouse's pay under the spousal IRA rule in section 219(c), which sets the limit at the lesser of the dollar amount and the couple's combined compensation after certain reductions.
The beneficiary's own contributions. Clause (ii)(I) subtracts "aggregate contributions made during the taxable year to all individual retirement plans" for the beneficiary, and 408A(c)(5)(B)(ii) puts the rollover inside the same limit as direct Roth contributions. A beneficiary who puts $3,000 of their own pay into a Roth IRA leaves room for a $4,500 rollover under a $7,500 limit, and the order of the two does not change the total. Section 408A(c)(6) ties the timing rule to the same place: "For purposes of this section, the rule of section 219(f)(3) shall apply."
Age 50 and over. The deductible amount in section 219 includes the catch-up for a person who is 50 or older by year end, so a beneficiary who is 50 or older in 2026 has a combined $8,600. That fits a 529 that someone opened for themselves.
Income is the item people expect to matter and, on the Code's text, for the rollover it does not. The 2026 Roth phase-out ranges announced in IR-2025-111 are $153,000 to $168,000 for single filers and heads of household and $242,000 to $252,000 for joint filers. Those ranges shrink the beneficiary's own Roth contributions. Section 408A(c)(3)(E), quoted above, raises the phase-out-reduced limit by the lesser of the rollover amount and the reduction, so the reduction cannot take the room away from a 529 rollover. A single filer with $170,000 of modified adjusted gross income has a reduction of the full $7,500, and a $7,500 rollover is added back in full. Publication 970 (2025) and Publication 590-A (2025) do not mention this interaction, so it is also a reading of the Code text rather than a published example.
The table runs the $35,000 through constant annual ceilings. "Years" counts tax years from the first eligible one.
| Beneficiary profile | Annual ceiling | Years to $35,000 | Pattern |
|---|---|---|---|
| Under 50, full 2026 limit | $7,500 | 5 | 4 x $7,500 + $5,000 |
| Age 50 or over, limit plus catch-up | $8,600 | 5 | 4 x $8,600 + $600 |
| 2024 or 2025 limit | $7,000 | 5 | 5 x $7,000 |
| Limit of $8,000, a hypothetical future step | $8,000 | 5 | 4 x $8,000 + $3,000 |
| Limit of $9,000, a hypothetical future step | $9,000 | 4 | 3 x $9,000 + $8,000 |
| $2,000 of the beneficiary's own IRA contributions each year | $5,500 | 7 | 6 x $5,500 + $2,000 |
| $3,000 of own IRA contributions each year | $4,500 | 8 | 7 x $4,500 + $3,500 |
| $4,200 of earned income | $4,200 | 9 | 8 x $4,200 + $1,400 |
| $3,000 of earned income | $3,000 | 12 | 11 x $3,000 + $2,000 |
| $2,000 of earned income | $2,000 | 18 | 17 x $2,000 + $1,000 |
| No earned income | $0 | none | no rollover until pay begins |
Four years would take an annual ceiling of at least $8,750 ($35,000 divided by 4). Since the limit moves in $500 steps, that means a limit of $9,000, which is $1,500 above the 2026 figure. The age-50 beneficiary at $8,600 misses four years by $600. For a person under 50 with enough pay and no other IRA contributions, five tax years is the minimum at any limit up to $8,500.
Account A: steady yearly gifts
Take a 529 opened in January 2011 with $3,000 deposited each January from 2011 through 2022, twelve deposits and $36,000 in all. The beneficiary has at least $7,500 of pay each year and no other IRA. The table uses zero investment growth, so every dollar rolled is a dollar contributed. That is the floor; earnings attributable to older contributions only enlarge the eligible pool.
| Year | Annual ceiling | Eligible pool | Balance before rollover | Rolled | Running total | Binding limit |
|---|---|---|---|---|---|---|
| 2026 | $7,500 | $33,000 | $36,000 | $7,500 | $7,500 | annual ceiling |
| 2027 | $7,500 | $36,000 | $28,500 | $7,500 | $15,000 | annual ceiling |
| 2028 | $7,500 | $36,000 | $21,000 | $7,500 | $22,500 | annual ceiling |
| 2029 | $7,500 | $36,000 | $13,500 | $7,500 | $30,000 | annual ceiling |
| 2030 | $7,500 | $36,000 | $6,000 | $5,000 | $35,000 | lifetime ceiling |
The eligible pool in 2026 is $33,000, not $36,000, because the contributions of 2022 are still inside the five-year window: eleven deposits of $3,000 are old enough. The pool never binds, since $33,000 is more than the $7,500 that year's ceiling allows, so Account A runs on the annual ceiling alone. After the fifth rollover $1,000 is left in the account.
For a beneficiary who is 50 or older, the same account rolls $8,600 in each of 2026, 2027, 2028 and 2029, which totals $34,400, and $600 in 2030. Five years again, with a smaller last payment.
Account B: three large gifts at the end
Now fund an account with $1,000 in January 2011 and nothing more until $15,000 in each of January 2023, 2024 and 2025. The total is $46,000 and the account is 15 years old in 2026, exactly like Account A. The five-year lookback now does the work, because almost all of the money is recent.
The eligible pool, measured at each December 31, is the contribution total for years up to five years back: $1,000 in 2026, $1,000 in 2027, $16,000 in 2028 (the 2023 gift has aged out of the window), $31,000 in 2029 and $46,000 from 2030.
The table shows two readings of the pool, because the statute can be read either way and the IRS has not chosen. The literal reading tests each distribution against contributions made before the five-year window and does not subtract anything already withdrawn. The net reading subtracts every earlier distribution, rollovers included, from that pool.
| Year | Annual ceiling | Literal pool | Literal rolled | Literal total | Net pool | Net rolled | Net total |
|---|---|---|---|---|---|---|---|
| 2026 | $7,500 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 |
| 2027 | $7,500 | $1,000 | $1,000 | $2,000 | $0 | $0 | $1,000 |
| 2028 | $7,500 | $16,000 | $7,500 | $9,500 | $15,000 | $7,500 | $8,500 |
| 2029 | $7,500 | $31,000 | $7,500 | $17,000 | $22,500 | $7,500 | $16,000 |
| 2030 | $7,500 | $46,000 | $7,500 | $24,500 | $30,000 | $7,500 | $23,500 |
| 2031 | $7,500 | $46,000 | $7,500 | $32,000 | $22,500 | $7,500 | $31,000 |
| 2032 | $7,500 | $46,000 | $3,000 | $35,000 | $15,000 | $4,000 | $35,000 |
The two columns agree on the big facts. The 2026 and 2027 rollovers are tiny, 2028 is the first full year, and the $35,000 is complete in 2032 either way. Account A finishes in 2030, so the lookback cost this family two calendar years. The readings differ only in 2027, where the literal reading lets the same $1,000 of old contributions support a second rollover and the net reading does not, and in the size of the last payment.
Earnings change the early rows more than the late ones. At a hypothetical 5% a year, the $1,000 contributed in 2011 has grown to $2,183 by December 31, 2026, so the literal pool is $2,183 in 2026 and $2,292 in 2027 instead of $1,000 each. The money rolls $2,183 and $2,292 in those years. The schedule still ends in 2032, with a final payment of $525. Counting earnings attributable to a specific old contribution is also the hardest part to document, which is why College Savings Foundation asked for a simplified recordkeeping rule (see Account C).
Account C: the 2005 account with a 2023 top-up
The College Savings Foundation, whose members include state 529 plans, wrote to the IRS on May 27, 2025 with a case that tests the statute's wording. A 529 receives $25,000 in 2005. In 2010 the beneficiary takes a qualified distribution of $24,000 for tuition. In 2023 someone adds $5,000, and the balance is $6,000. In 2024 the account rolls $6,000 into the beneficiary's Roth IRA. The letter's reasoning is that the text of 529(c)(3)(E)(i)(I) appears to allow the $6,000, because it does not exceed the $25,000 contributed before the five-year window, even though $5,000 of the rollover went into the account one year earlier. CSF asked the IRS whether it reads the clause that way.
The two readings give different schedules for this account.
| Year | Balance before rollover | Literal pool | Literal rolled | Net pool | Net rolled |
|---|---|---|---|---|---|
| 2024 | $6,000 | $25,000 | $6,000 | $1,000 | $1,000 |
| 2025 | $0 literal, $5,000 net | $25,000 | $0 | $0 | $0 |
| 2026 | $0 literal, $5,000 net | $25,000 | $0 | $0 | $0 |
| 2027 | $0 literal, $5,000 net | $25,000 | $0 | $0 | $0 |
| 2028 | $0 literal, $5,000 net | $30,000 | $0 | $5,000 | $5,000 |
The net reading subtracts the $24,000 qualified distribution from the $25,000 of old contributions and leaves a pool of $1,000, so $1,000 moves in 2024 and the 2023 top-up waits until it is five years old. The 2023 contribution passes the window in 2028, when the pool is the $30,000 of contributions through 2023 less the $24,000 distribution and the $1,000 rollover, which is $5,000. Both readings move $6,000 in total, and the difference is timing: 2024 against 2024 plus 2028.
The same letter makes a recordkeeping point. According to the letter, plans generally track total basis and not which earnings belong to which year's contribution, and records of contribution dates are unlikely to follow an account when it moves from one plan to another. The letter asks the IRS to place the burden on the taxpayer or to create a simplified rule. The pool in each row depends on the plan's contribution history by date.
Account D: a beneficiary with part-time pay
An account opened in January 2010 and funded with $3,000 each January through 2021 totals $36,000 and first rolls in 2025. The beneficiary is a student whose wages grow: $2,500 in 2025, $4,000 in 2026, $5,500 in 2027, $6,500 in 2028, $7,500 in 2029, $9,000 in 2030 and more after that. Compensation caps the early years, and the account never lacks old money.
| Year | Annual ceiling | Eligible pool | Balance before rollover | Rolled | Running total | Binding limit |
|---|---|---|---|---|---|---|
| 2025 | $2,500 | $33,000 | $36,000 | $2,500 | $2,500 | compensation |
| 2026 | $4,000 | $36,000 | $33,500 | $4,000 | $6,500 | compensation |
| 2027 | $5,500 | $36,000 | $29,500 | $5,500 | $12,000 | compensation |
| 2028 | $6,500 | $36,000 | $24,000 | $6,500 | $18,500 | compensation |
| 2029 | $7,500 | $36,000 | $17,500 | $7,500 | $26,000 | annual limit |
| 2030 | $7,500 | $36,000 | $10,000 | $7,500 | $33,500 | annual limit |
| 2031 | $7,500 | $36,000 | $2,500 | $1,500 | $35,000 | lifetime ceiling |
The account rolls its first dollar in 2025 and its last in 2031, seven tax years. The beneficiary with a full-time job in 2025 would have been done by 2029, so pay, not the account, sets the pace in this case. The 2025 row uses the $7,000 limit, and compensation of $2,500 is the lower figure.
Account E has the same funding as Account A, and the beneficiary also puts $3,000 a year of their own pay into a Roth IRA. The $4,500 ceiling stretches the schedule to eight years, from 2026 to 2033: seven rollovers of $4,500 and a last one of $3,500. Each dollar the beneficiary contributes directly displaces a dollar of rollover inside the same ceiling, which is why the schedule lengthens by three years.
Account F shows the early start. A 529 opened in January 2009 with $2,000 each January through 2018 holds $20,000 and is 15 years old in 2024. It rolls $7,000 in 2024 and $7,000 in 2025, both at the $7,000 limit, then the remaining $6,000 in 2026. The account empties before the $35,000 ceiling matters.
Calendar time: the 15-year date and the April window
Because the rule asks for 15 years, the first rollover year is the opening year plus 15.
| Account opened | First rollover year | Limit in that year |
|---|---|---|
| January 2009 | 2024 | $7,000 |
| January 2010 | 2025 | $7,000 |
| January 2011 | 2026 | $7,500 |
| January 2012 | 2027 | $7,500 assumed |
| January 2015 | 2030 | $7,500 assumed |
| January 2018 | 2033 | $7,500 assumed |
| January 2022 | 2037 | $7,500 assumed |
| January 2025 | 2040 | $7,500 assumed |
An account opened in a later month of the year becomes eligible later in the year. The schedules place every rollover on December 31, which is the latest date in the tax year, so they apply to any account opened by January 1 of the opening year.
The tax year of a rollover is not always the year it happens. Publication 590-A (2025) gives the example: "A distribution made after December 31, 2025, and before April 15, 2026, that is rolled over to a Roth IRA by April 15, 2026, and designated for 2025 would be reported as a Roth IRA contribution for 2025." The general rule is in section 219(f)(3): "For purposes of this section, a taxpayer shall be deemed to have made a contribution to an individual retirement plan on the last day of the preceding taxable year if the contribution is made on account of such taxable year and is made not later than the time prescribed by law for filing the return for such taxable year (not including extensions thereof)." Section 408A(c)(6) applies that rule to Roth IRAs.
For a rollover schedule that means two tax years' limits can be used in the same calendar year. The 15-year and five-year tests are measured on the actual distribution date, not the tax year it is designated for. Account A, opened January 2011, turns 15 in January 2026. A distribution in March 2026 can be designated for 2025:
| Distribution | Designated for | Limit that year | Rolled | Running total |
|---|---|---|---|---|
| March 2026 | 2025 | $7,000 | $7,000 | $7,000 |
| December 2026 | 2026 | $7,500 | $7,500 | $14,500 |
| December 2027 | 2027 | $7,500 | $7,500 | $22,000 |
| December 2028 | 2028 | $7,500 | $7,500 | $29,500 |
| December 2029 | 2029 | $7,500 | $5,500 | $35,000 |
The five tax years are 2025 to 2029 instead of 2026 to 2030, and the last rollover moves a year earlier. The March 2026 distribution is tested against a five-year line of March 2021, and the contributions of January 2011 through January 2021 are older than that, so the pool is $33,000 and the test passes. Designating 2025 draws on 2025's limit, so it requires that the beneficiary had compensation in 2025, that other IRA contributions for 2025 did not use up the limit, and that the distribution and the transfer both finish by April 15, 2026. The Publication 590-A sentence concerns 2025 only. Section 219(f)(3) is written for any year, but the publication does not repeat the example for later years.
Does changing the beneficiary restart the 15-year clock?
None of the IRS documents listed below answers it, and the arithmetic of the two possible answers is large enough to show why people ask.
The statute refers to a distribution "from a qualified tuition program of a designated beneficiary which has been maintained for the 15-year period ending on the date of such distribution." Section 529(e)(1)(B) defines the designated beneficiary, "in the case of a change in beneficiaries described in subsection (c)(3)(C)," as "the individual who is the new beneficiary." One reading is that the program is the account, which keeps running when the name on it changes. Another is that the program is "of a designated beneficiary," so a new beneficiary begins a new 15-year period. The text of 529(c)(3)(E)(i)(I) counts contributions "to the program," not to a person.
In its May 27, 2025 letter, the College Savings Foundation said SECURE 2.0 left the beneficiary-change rule in section 529(c)(3)(C) unamended and did not address what a change would do to the new rollover. It asked the IRS to confirm three things: that a beneficiary change would not reset the 15-year period, that it would not reset the five-year period, and that a new beneficiary would have a separate $35,000 lifetime limit. Those are requests, not rules.
As of November 3, 2026, these documents contain no answer:
- Publication 970 (2025), published January 27, 2026. It says the designated beneficiary can be changed with no income tax consequence to a family member, and separately says the Roth rollover needs an account open more than 15 years. It cites Notice 2024-23 only for the Maryland Prepaid College Trust exception to the 12-month limit on rollovers between 529 programs, which is a different rule.
- Publication 590-A (2025), published January 15, 2026, repeats the Roth rollover conditions and says nothing about a beneficiary change.
- The Instructions for Form 1099-Q (Rev. April 2025) add box 4b for a transfer to a Roth IRA and address a change of beneficiary only to say no Form 1099-Q is filed when the new beneficiary is a family member.
- The 2026-2027 Priority Guidance Plan (September 29, 2026) and the 2025-2026 plan's year-end update (October 30, 2026) each list one project titled "Guidance under section 529 regarding enhancements to qualified tuition programs" with no further description. The SECURE 2.0 project on the 2026-2027 plan names sections 103, 110, 125, 127 and 324, and neither plan mentions section 126.
- A May 27, 2026 article on the IRA Help site says there was still no guidance and no updates nearly three and a half years after SECURE 2.0, and that custodians were telling clients to keep the current beneficiary.
The scenario below shows what is at stake for an account opened in January 2011 whose beneficiary changes to a younger sibling in 2026. All figures use the 2026 limit held flat and the same conditions as Account A.
| If the change... | First rollover year | Last rollover year at $7,500 a year |
|---|---|---|
| does not restart the 15-year period | 2026 | 2030 |
| restarts the period at the change | 2041 | 2045 |
The second row is the cost of that reading: 15 more years of waiting, with the same five-year schedule afterward. CSF's third request concerns the $35,000 limit, which the statute counts "with respect to the designated beneficiary," and whether a new beneficiary would carry a separate one. Nothing here says which reading is right.
Reporting, and the Roth's own clock
The plan reports the transfer on Form 1099-Q. The instructions say: "Check box 4b if the distribution was made directly (trustee-to-trustee transfer) from a QTP to a Roth IRA maintained for the benefit of the QTP beneficiary." Publication 970 adds that qualifying rollovers are not reported on Form 1040, 1040-SR or 1040-NR. The plan also owes the Roth trustee a report: section 529(d)(2) requires the officer or employee in control of the program, or a designee, to give the trustee of the receiving Roth IRA information on the program's contributions, distributions and earnings as of the date of the distribution.
After the transfer, the money is in a Roth IRA, and Roth rules apply to it. Section 408A(e)(1) ends with a sentence that carries the 529's history across: "The earnings and contributions of any qualified tuition program from which a qualified rollover contribution is made under subparagraph (C) shall be treated in the same manner as the earnings and contributions of a Roth IRA from which a qualified rollover contribution is made under subparagraph (A)." Section 408A(e)(1)(C) is the clause that makes the transfer a qualified rollover: "from a qualified tuition program to the extent provided in section 529(c)(3)(E)." The statute stops there. How a plan splits the transferred amount between contributions and earnings, and what that does to the ordering of later Roth withdrawals, is the plan's report to the trustee and the beneficiary's records, and Publication 970 (2025) and Publication 590-A (2025) do not work an example.
The Canadian contrast: RESP to RRSP
The nearest Canadian rule runs in a different direction. A Registered Education Savings Plan that is not used for school can pay the investment growth to the subscriber as an Accumulated Income Payment, and the subscriber can offset the tax by contributing to an RRSP. The RESP guide covers the grant side of the plan, including the $50,000 lifetime contribution limit. The CRA publication RC4092 supplies the rules below.
| Feature | US 529 to Roth IRA | Canadian RESP accumulated income payment to RRSP |
|---|---|---|
| Who receives the money | The 529 beneficiary's own Roth IRA | The subscriber, who can then contribute to their own or a spouse's RRSP |
| Age test | Account open more than 15 years | Paid after the year of the plan's 9th anniversary, with every living beneficiary at least 21 and not eligible for an education payment; or in the year of the 35th anniversary (40th for a specified plan); or all beneficiaries deceased |
| Lifetime ceiling | $35,000 per beneficiary | $50,000 lifetime maximum of AIP that an RRSP contribution can offset |
| Yearly limit | IRA limit less other IRA contributions, and the beneficiary's compensation | RRSP deduction limit; contribute in the year of the payment or the first 60 days of the next |
| Tax if the conditions are met | Rolled amount excluded from income | AIP is income, offset by the RRSP deduction up to $50,000 |
| Tax without the offset | Ordinary tax on the earnings in a non-qualified distribution, plus a 10% additional tax (Publication 970) | Regular income tax plus an additional 20% tax (12% in Quebec) |
| Time to finish | Several tax years | One payment; the plan must be terminated by the end of February of the year after the first AIP |
The Canadian route moves the growth in one step to a person who needs RRSP room, not compensation. The American route moves it a small slice at a time to a person who needs earned income and the account's age.
Putting the schedule into the calculator
The Roth IRA calculator takes an initial deposit, a recurring contribution, a rate and a number of years. Enter the first rollover as the initial deposit and the later ones as yearly contributions, or run each row separately and add the results, because the final payment is usually smaller than the rest. A single $7,500 rollover growing at a hypothetical 6% for 30 years reaches $43,076 with annual compounding, and the table below uses annual compounding throughout.
Timing changes the Roth balance even when the total rolled is the same. Each schedule below rolls $35,000, and the Roth value at the end of 2056 at a hypothetical 6% a year is:
| Schedule | Years of rollover | Roth value, end of 2056 |
|---|---|---|
| All $35,000 moved on December 31, 2026 (not allowed; reference only) | 1 | $201,022 |
| Account A, steady gifts | 2026 to 2030 | $180,966 |
| Account D, part-time pay | 2025 to 2031 | $177,947 |
| Account E, own Roth contributions too | 2026 to 2033 | $166,307 |
| Account B, literal reading | 2026 to 2032 | $164,123 |
| Account B, net reading | 2026 to 2032 | $162,754 |
The $20,056 gap between the lump sum and Account A is the price of the annual limit. The $16,843 gap between Account A and the literal reading of Account B is the price of the lookback. Both are what the same $35,000 would have earned if it had been in the Roth earlier, at one assumed rate. The general compound interest calculator and the traditional IRA calculator run the same arithmetic with other inputs, and the 401(k) guide sets out the separate employer-plan limits that sit beside the IRA limit.
What the schedules assume
Every account above is a constructed example, not a typical one. The schedules place all contributions on January 1 and all rollovers on December 31, hold the IRA limit at $7,500 after 2026, apply no investment growth except where a table says otherwise, and treat each beneficiary as meeting the compensation test described above. The compensation cap and the income rule are readings of the Code text, and the beneficiary-change question and the prior-distribution question are open. A plan administrator may apply stricter rules than the statute requires, and the plan's records decide what counts as contributed before the five-year window.
The same dollars have other tax-free uses that are not weighed here. Distributions for qualified higher education expenses are one, and section 529(c)(9) treats up to $10,000 of qualified education loan repayments for the beneficiary or a sibling as another. The student loan calculator works the loan side of that comparison.
Sources
- Office of the Law Revision Counsel, 26 U.S.C. 529, 26 U.S.C. 408A and 26 U.S.C. 219, current through Public Law 119-136 (October 22, 2026): 529(c)(3)(A), (c)(3)(E), (d)(2), (e)(1); 408A(c)(2), (c)(3)(E), (c)(5)(B), (e)(1); 219(b), (c), (f)(3). Checked November 3, 2026.
- GovInfo, United States Code, 2024 edition, 26 U.S.C. 529, including the notes on the effective date (section 126(d) of Public Law 117-328). Checked November 3, 2026.
- GovInfo, Public Law 119-21, sections 70117, 70413 and 70414, searched for any amendment to 529(c)(3)(E) or 408A(c)(2). Checked November 3, 2026.
- IRS, Publication 970 (2025), Tax Benefits for Education, chapter 7, Rollovers and Other Transfers (published January 27, 2026). Checked November 3, 2026.
- IRS, Publication 590-A (2025), Contributions to Individual Retirement Arrangements, Qualified tuition program rollover to a Roth IRA (published January 15, 2026). Checked November 3, 2026.
- IRS, Instructions for Form 1099-Q (Rev. April 2025), box 4b. Checked November 3, 2026.
- IRS, IR-2025-111, 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (November 13, 2025). Checked November 3, 2026.
- IRS, IR-2023-203 (November 1, 2023) and IR-2024-285 (November 1, 2024), the 2024 and 2025 IRA limits. Checked November 3, 2026.
- IRS, Cost-of-living adjustments for dollar limitations on benefits and contributions, which lists 2023 through 2026 and no 2027 limits. Checked November 3, 2026.
- Treasury and IRS, 2026-2027 Priority Guidance Plan (September 29, 2026) and 2025-2026 Priority Guidance Plan year-end update (October 30, 2026). Checked November 3, 2026.
- College Savings Foundation, Recommendations for 2025-2026 Priority Guidance Plan, letter to the IRS dated May 27, 2025, sections 2.A and 2.B. Checked November 3, 2026.
- IRA Help (Ed Slott and Company), 529-to-Roth: Still No News on 15-Year Clock, May 27, 2026. Checked November 3, 2026.
- Canada Revenue Agency, RC4092, Registered Education Savings Plans (RESPs), Accumulated income payments. Checked November 3, 2026.
- Schedules, pools and Roth values: worked out from the rules above with the stated hypothetical accounts. Rules set by an individual 529 plan or Roth IRA custodian can be stricter than the federal text and are not in the tables.