Starting this year, some of the money in 529 college savings accounts can be used for retirement if it’s not needed for education.

New rules under the federal law known as Secure 2.0 allow up to $35,000 in a 529 account to be rolled over to a Roth individual retirement account for the beneficiary of the 529 account if certain conditions are met.

State-sponsored 529 accounts, named for a section of the tax code, are used to pay for education expenses — mainly college costs. Money deposited in the accounts grows tax free and can be withdrawn tax free to pay for eligible expenses like tuition, housing, food and books.

The new Roth option is aimed at parents who may be reluctant to save in a 529 because they worry about having to pay income taxes and a penalty if for some reason the funds aren’t needed for college and they want to withdraw the money.

“It is parents’ No. 1 objection to opening a 529,” said Vivian Tsai, chair emeritus of the College Savings Foundation, a group that includes big financial firms that run the state college savings programs. “The barrier is really psychological.” (Ms. Tsai is also senior director and head of relationship management for the education savings unit at TIAA, a large investment firm that manages 529 plans in seven states.)

Many families struggle to save for college, and accumulating “too much” money is usually not a problem. “The vast majority of account holders do not save enough,” Ms. Tsai said.

The average estimated annual cost of attending a four-year in-state university was about $28,000 for the 2022-23 school year, and it was almost $58,000 at a private four-year college. Yet the average 529 account balance as of midyear 2023 was about $28,000, according to the College Savings Plans Network, a group representing state 529 plans and a proponent of the Roth rollover option.

Still, there can be circumstances when there are leftover funds — if, say, a student decides not to attend college, chooses a more affordable school or gets scholarships to cover much of the cost. Knowing there is an option to move the money into a Roth may help overcome any reluctance to opening a 529, said Peg Creonte, president of government savings at Ascensus, which supports 43 education savings plans across 26 states and the District of Columbia.

“Families are concerned their money could get trapped,” she said. “The real benefit is that it reduces a barrier.”

There was already a way to deploy unused 529 funds without paying taxes — simply by naming another family member, like a sibling, grandchild or spouse, as the account’s beneficiary for education expenses. (Ms. Tsai said she had done this, shifting funds saved in her son’s account to his younger sibling, whose college costs were higher.) Parents can also be named as the account’s beneficiary if they want to further their own education.

To qualify for the Roth rollover option, the 529 account must have been open for at least 15 years, and no contributions or earnings from the past five years can be transferred. Up to $35,000 can be transferred in total — but transfers are limited to the maximum annual Roth contribution, which in 2024 is $7,000 for people younger than 50. To reach the maximum transfer amount, the money would have to be moved over several years.

Other rules may apply as well. To contribute to a Roth, for instance, a saver must have earned income, and contributions for a given tax year can’t be more than the saver earned, said Pam Lucina, chief fiduciary officer at Northern Trust, a financial services firm. (The Investment Company Institute, a group representing regulated investment funds, has asked the Internal Revenue Service to confirm that those rules apply to rollovers to a Roth from a 529.) There’s no tax deduction for Roth contributions, but the accounts grow tax free and the funds aren’t taxed upon withdrawal.

Ascensus estimates that 15 percent of its roughly 6.5 million 529 accounts would qualify for the rollover option, Ms. Creonte said, adding that the administrator saw 768 rollovers into Roths in January.

But the federal government has not yet issued formal guidelines about the Roth rollover option, leaving some questions unanswered. The Investment Company Institute has also asked the Treasury Department and the I.R.S., for instance, to clarify whether a change of a 529 account’s beneficiary would “restart” the 15-year holding period.

If that were the case, a change in beneficiary could complicate Roth rollovers. For instance, a parent who wanted to become the account’s beneficiary and transfer the money to his or her own Roth I.R.A. would have to wait much longer to do so.

The College Savings Plans Network sent a letter to the federal government in September stating that it does not believe a change in beneficiary or other administrative changes should reset the 15-year clock and asking for confirmation of that policy.

But at least one 529 plan — Pennsylvania’s — posted a warning on its website, saying that the Treasury Department may ultimately disagree with the interpretation of the College Savings Plans Network and that it “must not be taken as legal or tax advice.”

“I’d be cautious about changing beneficiaries if you think you may do a Roth rollover,” said Chris Lynch, president of TIAA’s tuition financing program.

Since unused funds can simply remain in the 529, it may make sense to wait until more details are clarified. “There isn’t any need for people to rush it,” said Rob Williams, managing director of financial planning at Charles Schwab.

But there is a deadline — this year’s federal tax filing deadline — if a saver wants to roll over funds to a Roth from a 529 and make the contribution count for the 2023 tax year, according to the Investment Company Institute. One large 529 plan, Virginia’s, also refers to the deadline on its website.

Another wrinkle is that some states offer a state tax deduction for residents who contribute to a 529 account. Those states may require repayment of the state tax savings if 529 funds are rolled over into a Roth. It’s best to check with a tax professional to see how a rollover may affect your finances.

Here are some questions and answers about 529 accounts and Roth rollovers:

Do rollovers to a Roth from a 529 count toward the annual maximum I.R.A. contribution?

Yes. Contributions — including the rollover — can be no more than the maximum allowable I.R.A. limit each year.

What can I use 529 funds for, other than college costs?

Funds saved in a 529 can be used to pay for tuition for kindergarten through high school, as well as for apprenticeships. Also, up to $10,000 from a 529 can be used to repay student loans.

What if I spend money from my 529 account on unqualified expenses?

If you use the funds for non-qualified purposes, you’ll generally owe ordinary income tax as well as a 10 percent tax penalty on the amount withdrawn — but just on the portion of the withdrawal attributable to earnings, Mr. Williams at Schwab said.