Section 529A Qualified ABLE Account Rules For Special Needs Beneficiaries. As a part of the “tax extenders” legislation passed at the end of 2014, Congress also passed the Achieving a Better Life Experience (ABLE) Act of 2014.Using the existing Section 529 college savings plans as a framework, the purpose of the ABLE Act was to create a new kind of tax-preferenced account under the newly ...
Executive Summary. Leveraging the success (and the systems and infrastructure) of tax-preferenced 529 college savings plans, in 2014 Congress passed the “Achieving a Better Life Experience” (ABLE) Act, which created a new “529A” version of the accounts, designed specifically to allow families to accumulate assets on a tax-preferenced basis for special needs beneficiaries.
It’s a significant change to the financial planning landscape for families of people with special needs. Account details. The 529A accounts authorized by the ABLE ... 529A plans will be ...
What is a 529A account? Between doctor visit co-pays, medical equipment, education, therapy and other necessary expenses, the cost of raising a special needs child can top the $2 million mark over the course of a lifetime. With the ABLE Act, families are able to save money for future expenses in a tax-deferred 529A account without having to ...
529 ABLE (529A) accounts. ... The only way families could get around this was to set up a special needs trust, which is often very costly to do. As a result, there has been little incentive to save, and many people with disabilities end up living below the poverty level. ... Contributions to a plan account are deductible, in an amount not to ...
In light of Autism Awareness Month, I wanted to take a minute to blog on something that’s really special, and really important for families with special needs members.While it is Autism Awareness Month, the subject of 529A accounts isn’t limited to those with Autism – rather it’s for all families with special needs members.
Because a college education may not be a good fit for some children with special needs, the Able Act allows parents to save money in a tax-free account as long as the funds are used for certain types of expenses (“qualified expenses”).
When a child with special needs is setting aside money for college, a 529 Plan may not be the best option. Here are some things to think about when family members ask about the best way to provide funds for a child with special needs' college education.
Non-Ohio taxpayers or residents should consider whether their home state plan offers any benefits not available through STABLE Account. Before you open an account, you should carefully read and understand the STABLE Account Plan Disclosure Statement and Participation Agreement.
However, families must spend a few thousand dollars for a lawyer to set up a special needs trust, and the trust doesn’t have the automatic tax advantages of a 529 plan, says Chris Chen, a financial planner in Waltham, Mass. An ABLE account, he says, will be more cost-effective, particularly for small contributions.