SECURE 529 Provisions
Summary
SIFMA provided comments to the U.S. Department of the Treasury (DOT) and the Internal Revenue Service (IRS) requesting guidance relating to changes to Section 529 of the Internal Revenue Code due to SECURE 2.0 Act of 2022.
Excerpt
May 9, 2023
Ms. Carol Weiser
Benefits Tax Counsel
U.S. Department of the Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220
Ms. Rachel Levy
Associate Chief Counsel
Internal Revenue Service
1111 Constitution Ave., NW
Washington, DC 20224
Re: SECURE 529 Provisions
Dear Ms. Weiser and Ms. Levy:
The Securities Industry Financial Markets Association (“SIFMA”)1 would like to request guidance relating to changes to Section 529 of the Internal Revenue Code due to SECURE 2.0 Act of 2022.2 We will be submitting an additional letter relating to other provisions of SECURE 2.0 at a later date.
Congress provided for an expansion of the ability to move funds placed in 529 accounts to Roth IRAs. There are certain limitations, including the number of years the funds must be in the account before moved, as well as the number of years any new contributions must have been in the account. We have interpretive questions we would like the IRS to address on both these issues, as well as questions and suggestions with regard to reporting. While this provision is not effective until after December 31, 2023, our members are already receiving many questions from clients due to the press coverage and popularity of the provision and will need time to implement this provision based on the IRS regulations.
1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA).
2 The Consolidated Appropriations Act, 2023, Division T- SECURE 2.0 Act of 2022, Section 126