This bill amends the New Jersey Better Educational Savings Trust (NJBEST) program to allow distributions from NJBEST accounts to be considered qualified withdrawals when rolled over into a Roth IRA. This change aligns state law with recent federal legislation that permits such rollovers without incurring tax liabilities. The bill specifically updates the definitions of "qualified withdrawal" and "qualified higher education expenses" to include these rollovers, ensuring that funds transferred from a NJBEST account to a Roth IRA are exempt from state income tax.

Additionally, the bill outlines the conditions under which these rollovers can occur, including the requirement that the NJBEST account must have been open for at least 15 years and that the Roth IRA must be established in the name of the designated beneficiary. The total amount that can be rolled over is capped at $35,000, subject to annual contribution limits for Roth IRAs. By making these amendments, the bill aims to provide greater flexibility for families saving for education while also promoting tax-advantaged savings options.

Statutes affected:
Introduced: 54A:6-25