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ARIZONA HOUSE OF REPRESENTATIVES57th Legislature, 2nd Regular Session |
House: WM DP 5-3-1-0 |
HB 2477: Arizona's education savings plan; revisions
Sponsor: Representative Livingston, LD 28
House Engrossed
Overview
Conforms Arizona's 529 education savings plan with federal law. Increases qualified withdrawal amounts and establishes a permanent 529 transfer with no limit to an Achieving a Better Life Experience Act Account, in addition to establishing requirements for a Roth individual retirement account transfer.
History
Arizona's 529 Program was established by Laws 1997, Chapter 171 under the Arizona Commission for Postsecondary Education (ACPE), with the Arizona State Treasurer serving on the 529 Program's Oversight Committee within ACPE. Management and oversight of the AZ529 Plan was transferred to the Arizona State Treasurer's Office (ASTO) by Laws 2020 Chapter 88.
The Arizona 529 Plan is a college savings plan named after Section 529 of the Internal Revenue Code sponsored by the State of Arizona. The 529 Plan is designed to provide a parent, grandparent, or anyone else an opportunity to save for a child’s educational dreams within a tax-advantaged savings vehicle (Az529.gov).
A 529 plan is a state-sponsored, tax-advantaged investment account designed for education savings, allowing funds to grow tax-deferred and be withdrawn tax-free for qualified expenses like tuition, fees, and room and board. Anyone can open an account, with high contribution limits and no income restrictions (IRS.gov).
Provisions
1. Conforms the definition of member of the family to section 529 of the internal revenue code. (Sec. 1)
2. Conforms the definition of qualified higher education expenses to section 529 of the internal revenue code as modified by 26 United States Code Section 529 (c)(7) and (9). (Sec. 1)
3. Increases the amount of a qualified withdrawal to not more than $20,000 in the aggregate for expenses incurred for the designated beneficiary to enroll in an elementary or secondary public, private or religious school. (Sec. 1)
4. Removes identifying information of a contributor for purposes of completing an application to participate in a 529 plan. (Sec. 2)
5. Establishes a permanent 529 transfer where all or a portion may be transferred to an Achieving a Better Life Experience Act Account if the designated beneficiary of the account that is either the designated beneficiary or a member of the family of the designated beneficiary of the transferee account. (Sec. 2)
6. Establishes that an account owner, can transfer all or a portion of an account to a Roth individual retirement account that satisfies all the following requirements:
a. the account established is maintained by the designated beneficiary for at least 15 years before the transfer date;
The monies transferred are derived from contributions that were made to the account established at least five years before the transfer date and from the earnings attributable to those contributions;
b. the designated beneficiary of the account is also the designated beneficiary of the Roth individual retirement account to which the transfer is made;
c. the total amount of monies transferred and all other contributions to the Roth individual retirement account for the designated beneficiary in any year, does not exceed the annual Roth individual retirement account contribution limit for the designated beneficiary; and
d. the aggregate amount of monies transferred to all Roth individual retirement accounts for the designated beneficiary does not exceed $35,000. (Sec. 2)
7. Makes technical and conforming changes. (Sec. 1,2)
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Initials VP/CS HB 2477
2/24/2026 Page 0 House Engrossed
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