An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in personal income tax, further providing for classes of income.

2025-2026 Regular Session Introduced by Andre Carroll and 14 co-sponsors

HB 2675 aims to modify PA personal income tax by enabling tax-free rollovers from PA 529 college savings plans to Roth IRAs.

Referred to Finance

Summary of Bill HB 2675 (2025-2026, Pennsylvania)

Purpose and intent

HB 2675 proposes amendments to the Pennsylvania Tax Reform Code of 1971, specifically refining how personal income tax treats different classes of income.

The bill’s memo indicates a focus on facilitating tax-free rollovers from Pennsylvania 529 accounts to Roth IRAs, signaling a potential expansion of rollover eligibility or tax treatment related to education savings accounts and retirement accounts.

Key provisions and changes (as indicated by available bill materials)

Amends the act of March 4, 1971 (Tax Reform Code of 1971) to further define and modify “classes of income” within the personal income tax framework.

The accompanying memo highlights a potential mechanism for tax-free rollovers from PA 529 college savings accounts to Roth IRA accounts. Although the exact statutory text is not provided here, the stated intent suggests:

Allowing or clarifying rollover pathways from PA 529 plans into Roth IRAs.
Potential tax treatment changes to these rollovers (e.g., maintaining tax-free status or specific eligibility conditions).

The precise statutory language and thresholds (e.g., eligible rollover limits, timing, sunset provisions, income limits, or age restrictions) are not detailed in the materials provided.

Who/what would be affected

Taxpayers subject to Pennsylvania personal income tax, particularly individuals with:

PA 529 college savings accounts.
Roth IRA accounts.

Beneficiaries and account owners who currently participate in 529 plans and/or Roth IRAs could see changes in how transfers between these accounts are treated for Pennsylvania tax purposes.

Tax preparers and financial institutions administering PA 529 plans, Roth IRAs, and related rollovers would need to apply the new provisions.

Procedural and timeline aspects

Prime sponsor: Representative Greg Scott (District 54).

Co-sponsors: Representatives Samuelson, Venkat, Hanbidge, Neilson, Rivera, Sanchez, and Kutz (spaning both Democratic and Republican members).

Status: Referred to the House Finance Committee on June 26, 2026.

Committee activity noted: A public hearing on HB 2675 (alongside HB 2639) occurred on June 30, 2026, indicating active committee consideration and potential future amendments or votes.

No floor votes or final passage timeline are provided in the available materials.

Additional context

The bill’s short title reiterates its goal to amend the Tax Reform Code with respect to personal income tax classes of income.

The sponsor memo specifically references “Tax-Free Rollovers from PA-529 Account to Roth IRA,” suggesting targeted changes to align PA tax treatment with that rollover concept.

Potential impacts to monitor

Whether rollovers from PA 529 plans to Roth IRAs would be exempt from Pennsylvania state taxes, and under what conditions.

Any limits on rollover amounts, frequency, or eligibility (e.g., age or account balance restrictions).

Interaction with federal tax treatment of such rollovers, given that Pennsylvania conforms to federal tax rules but has its own state tax treatment for retirement and education savings accounts.

Administrative guidance for financial institutions and CPAs/planners handling PA 529 to Roth IRA transactions.

If you’d like, I can monitor for updates on final passage, committee amendments, and the exact statutory text to provide a more granular clause-by-clause summary.