The Tax Cuts and Jobs Act signed into law on December 22, 2017 allows families who have saved money in 529 accounts in anticipation of paying for education expenses to roll over up to $15,000 each year from a 529 education account to a 529a ABLE account. The 529 education account must be for the same beneficiary as the ABLE account or for a member of the same family as the ABLE account holder.
As we have previously blogged, ABLE accounts allow certain individuals with disabilities and their families to save for disability related expenses, while maintaining eligibility for Medicaid and other means-tested public benefits programs. Unlike 529 accounts which limit distributions for education related expenses, ABLE accounts may be used for any “qualified disability expense” which includes not only education, but also housing, transportation, employment training and support, assistive technology and related services, personal support services, health, prevention and wellness, financial management and administrative services, legal fees, expenses for ABLE account oversight and monitoring, funeral and burial, and basic living expenses. The ability to roll over a 529 account to a 529a ABLE account may give you the flexibility you need to best provide for a loved one with a disability.
If you or someone you love has a disability and have questions about special needs planning, call us. We have the experience and knowledge you need to make the right decisions, help you identify and qualify for necessary public benefits, and plan for the future.