The PA-529 program has a proven track record of success. It has helped families save for college and career education, with more than 265,000 accounts that are worth $6.8 billion in contributions and investment growth. A student may end up with leftover money in their 529 account for a variety of circumstances, including not finishing school, receiving grants or scholarships, transferring to a less expensive university or degree program, or other reasons. One estimate suggests that about 10 percent of families have leftover funds in their 529 accounts.

In 2024, in response to federal changes, we passed a law to exempt all distributions from a PA-529 account from the personal income tax. To build on this positive change, our legislation clarifies that rollovers from a PA-529 account to a Roth IRA are also exempt. Our legislation will not only give Pennsylvania taxpayers more flexibility for using leftover 529 funds, but it will also preserve this additional option to help residents save for retirement.

Please join us in co-sponsoring this important bill so that we may ensure families can make use of the full spectrum of PA-529 benefits.