What are the rules for rolling leftover 529 money into the beneficiary's Roth IRA?

Under a provision that took effect in 2024, you can roll unused 529 funds into a Roth IRA owned by the plan's beneficiary, tax- and penalty-free. The IRS caps this at a $35,000 lifetime total per beneficiary. The 529 account must have been open for at least 15 years, and contributions (plus their earnings) made in the last five years are not eligible to roll. Each year's rollover counts against the beneficiary's normal Roth contribution limit and requires them to have earned income at least equal to the amount rolled. This turns a modestly overfunded 529 into a retirement head start rather than a taxable withdrawal. It is one reason not to panic about small leftover balances.