In 2014 President Obama signed the ABLE Act into law. The act amended Section 529 of the Internal Revenue Service Code of 1986 to create tax-free savings accounts for individuals with disabilities. The bill eased financial strains faced by individuals with disabilities by making tax-free savings accounts available to cover qualified expenses such as education, housing and transportation.
In 2017 the President signed into law the ABLE to Work Act and the ABLE Financial Planning Act.
The ABLE to Work Act will:
- allow an ABLE account’s designated beneficiary to contribute an additional amount beyond the current limitation on contributions, up to the lesser of the Federal poverty line for a one-person household; or the individual’s compensation for the taxable year
- allow a designated beneficiary of an ABLE account to claim the saver’s credit (a nonrefundable tax credit for eligible taxpayers for qualified retirement savings contributions) for contributions made to his or her ABLE account
The ABLE Financial Planning Act will allow ABLE beneficiaries to roll over regular 529 accounts to 529A (ABLE) accounts up to the annual maximum contribution. This new law will be particularly beneficial for families who created 529 accounts before receiving a child’s diagnosis, or for teenagers who incur life-changing events that prevent them from using 529 funds for their original purpose.
21_Connect looks forward to working with Congress and other advocacy organizations to continue making progress toward better lives for our kiddos and our community.