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Status Board: State Income Tax Treatment on 529 Distributions to Roth IRAs

Effective 2024, certain types of qualified transfers from 529s to Roth IRAs will be allowed from a federal income tax perspective. From a state income tax perspective, this article categorizes the transfer as a qualified expense, non-qualified expense or decision pending from a state income tax recapture perspective for those that file state income tax with those states. This status board is for information purposes only based on publicly available information as of publication date, and you and your clients are responsible for determining the eligibility of a 529 distribution to a Roth IRA rollover. This article will be updated over time as more information becomes available.