AZ529 accounts can now pay up to $20,000 in the aggregate in K-12 school expenses per beneficiary, can move money to ABLE accounts with no dollar cap or end date, and can move up to $35,000 to a Roth IRA if certain conditions are met.
Official title: Arizona's education savings plan; revisions
- September 12, 2026
What changes
BeforeQualified withdrawals for elementary or secondary school (public, private or religious) were limited to tuition of less than $10,000.
NowQualified withdrawals may cover not more than $20,000 in the aggregate for expenses incurred for the beneficiary to enroll in or attend an elementary or secondary public, private or religious school.
BeforeThrough December 31, 2025, an account owner could roll over up to $15,000 from an account to an ABLE (achieving a better life experience act) account.
NowAn account owner may transfer all or a portion of an account to an ABLE account, with no end date, if the 529 beneficiary is the ABLE account's beneficiary or a member of that person's family.
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NowAn account owner may transfer money to a Roth IRA for the beneficiary if: the account has been maintained by the beneficiary for at least 15 years; the money comes from contributions made at least 5 years earlier and their earnings; the transfer plus other Roth contributions that year stays within the beneficiary's annual Roth limit; and total transfers to Roth IRAs do not exceed $35,000.
BeforeState law listed in detail which relatives count as a 'member of the family' and which costs count as 'qualified higher education expenses.'
NowBoth terms now have the same meaning as in federal tax law (section 529 of the Internal Revenue Code), with the expense definition as modified by specific federal provisions.
BeforeThe account application had to include the contributor's name, address and Social Security or employer ID number.
NowThe application no longer lists the contributor's name, address and ID number as required information; the account owner's and beneficiary's details are still required.
Who it affects
- AZ529 account owners
- Designated beneficiaries of AZ529 accounts
- Families paying elementary or secondary school expenses with AZ529 money
- People who open AZ529 accounts
- State treasurer and state board of investment
What you need to do
Nothing.
What the law doesn't answer
- Whether the $20,000 limit for K-12 school expenses applies per year, over the life of the account, or some other period
- Which specific K-12 costs besides tuition count, since the text points to federal law without listing them
- How Arizona state income tax treats Roth IRA or ABLE account transfers
- Whether ABLE transfers made after December 31, 2025 and before this law takes effect are covered
- What the annual Roth IRA contribution limit is
This summary describes the law as enacted. Later laws, court rulings or referendum petitions can change the picture. Check the official text for the current wording.