IndianaIndiana529 transfers to Roth retirement accounts could avoid tax credit repayment
For tax years starting in 2026 or later, certain Indiana529 transfers to Roth retirement accounts would avoid state tax credit repayment if they meet federal rules.
What it does
For tax years starting in 2026 or later, a special Indiana529 transfer to a Roth IRA, a retirement account, would not trigger repayment of state tax credits if it follows federal rules.
Argument forAccount owners who meet federal rules could move Indiana529 savings to Roth IRAs without that transfer triggering repayment of earlier state tax credits.
Argument againstAccount owners whose transfers fail federal Roth IRA rules might still have to repay earlier state tax credits.
More detail
Indiana would count certain transfers from Indiana529 accounts to Roth IRAs as qualified withdrawals. This applies to transfers from Indiana529 college savings accounts to Roth retirement accounts. The transfer must be a special rollover that follows federal Section 529 rules. If enacted, this treatment would take effect retroactively on January 1, 2026, for tax years beginning after December 31, 2025.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jan 6Authored by Representative HeineLatest
- Jan 6First reading: referred to Committee on Ways and MeansMinor
- Jan 6Coauthored by Representatives Judy, Snow, HeatonIntroduced
EducationTaxes & Budget