529 Plans
529 plans are a great college savings option for your children, grandchildren, nieces and nephews. Contributions to 529 accounts are treated as gifts to the beneficiary, so generally you can’t contribute more than the annual gift tax exclusion each year… $19,000 for 2026…per beneficiary. But there’s a twist. You can bunch up to five years of 529 contributions. If you do this in 2026, you can contribute $95,000 to each beneficiary’s 529 plan before year-end. You’ll be treated as gifting $19,000 to the beneficiary in 2026 and in each of the next four years…2027-30.
Some 529 funds can be rolled over tax-free to a Roth IRA for the beneficiary in a trustee-to-trustee transfer, subject to key rules. The 529 plan must have been open for at least 15 years with the same beneficiary. 529 payins made in the prior five years are ineligible for the Roth IRA transfer. There’s a $35,000 lifetime cap on such transfers. The yearly amount transferred can’t exceed the annual IRA payin limit, which is $7,500 for 2026, and any actual contributions made to any IRA owned by the beneficiary count against this limit. So if the beneficiary has already maxed out IRA contributions in a year, then no funds can be transferred to a Roth IRA for that year. Additionally, the beneficiary’s taxable wages must not be less than the transferred 529 amount.
A bipartisan Senate proposal would expand the Roth IRA transfer relief by repealing the $35,000 lifetime cap on transfers from 529 accounts to Roth IRAs and making it an unlimited amount. The bill would retain the other guardrails.
What if an individual is a beneficiary of two 529 college savings accounts? Can each plan transfer up to $35,000 to a Roth IRA owned by the beneficiary? It doesn’t appear so. The federal statute says that the $35,000 aggregate limit on trustee-to-trustee transfers from a 529 account to a Roth IRA applies with respect to the designated beneficiary. Tax experts think this means the $35,000 limit applies per person. If someone is the beneficiary of two 529 accounts, $35,000 (not $70,000) is the lifetime cap on direct trustee-to-trustee transfers to the beneficiary’s Roth IRA.
Health Care
21 million people on Medicare Part B are getting $90 rebates this month. Eligible individuals will get a letter in the mail notifying them of the rebate. The government will automatically deposit the money into your bank account or you will receive a check. A couple can get $180 if both spouses are on Medicare. Generally, an eligible individual is one who pays Medicare Part B monthly premiums, lives in the U.S., doesn’t pay the income-related monthly adjustment amount, doesn’t get Medicaid premium assistance and doesn’t have a Medicare Advantage plan. The $90 isn’t taxable because it’s a rebate to help you pay Part B premiums.
The Service issues proposed regulations on the premium tax credit (PTC)… the Obamacare subsidy available to eligible individuals who buy health insurance through the marketplace, which reduces the cost of their monthly insurance premiums. The proposal covers new eligibility requirements and other changes that were enacted in 2025’s “One Big Beautiful Bill.” It adds verification and immigration status rules and more documentation requirements that potential enrollees must submit to the marketplace in order to qualify for advanced payments of the PTC. Most people who qualify for the PTC generally have the credit paid in advance to the health insurer to lower their monthly premium payments. They elect this through the marketplace when they buy insurance. So these changes are expected to impact a lot of people.
Individuals receiving advanced PTC payments should also note this change that begins with 2026 returns. People who opt to have their PTC paid in advance to health insurance firms have always had to file Form 1040 and attach Form 8962 to reconcile the advanced payments and the actual PTC that they are entitled to. Before 2026, if the PTC was less than the advances, then taxpayers with incomes of 400% or more of the poverty level had to repay the full erroneous credit amount, and folks with incomes below 400% of the poverty level had to repay only a portion of the amount. Starting with 2026 returns, all filers with PTC advanced payments that exceed the PTC must repay the full amount of the excess, regardless of income.