September 24, 2014
Potential New Savings Vehicle for Disability Expenses
I attended the 529 Conference on September 15-17 in Orlando, Florida. The 529 Conference is a terrific event sponsored by Asset International where industry experts gather to discuss the latest developments in Section 529 college savings and prepaid plans. I had the opportunity to speak at the 529 Conference about the status of a proposed bill known as “Achieving a Better Life Experience Act” or “ABLE”.
For a number of years now, a dedicated group of legislators in the House and Senate have been working toward the goal of enacting legislation that would create a tax-favored account for the benefit of individuals with disabilities similar to 529 college plans.
Under the current version of the proposed ABLE legislation, a qualified ABLE program would be established and maintained by a state and would allow account owners to save up to $14,000 annually for the qualified disability expenses of a disabled beneficiary. Qualified disability expenses are defined broadly to include expenses for education, housing, transportation, employment training and support, assistive technology and personal support services, health, prevention and wellness, and other expenses to be adopted by IRS regulation. The exact details on how and when the accounts will be offered will not be known until after the proposed legislation becomes law.
According to an article published on DisabilityScoop.com, members of the U.S. Senate said Friday that they have reached a deal which will allow the ABLE Act to proceed. For more information, the article can be viewed at: http://www.disabilityscoop.com/2014/09/19/deal-savings-accounts/19689/.
We will continue to provide updates on the progress of this important legislation in this space.