On December 19, 2014, the President signed into law the Tax Increase Preention Act of 2014. This legislation includes the Achieving a Better Life Experience Act of 2014 (ABLE Act). This act provides a new type of tax-advantage account for disabled persons under 529 Plan.
The law establishes a new section under section 529 of the Internal Revenue Code to be 529A, which applies for tax years beginning after December 31, 2014. However, what needs to be understood is that the signing of this law remains at the federal level. Individual states still need to propose legislation, which will not be finalized this year. A program will be created which will be administered by Florida's Prepaid College Board, but there will need to be a lot of regulations both at the state and federal levels.
What does that mean for you? At this time individuals can not open ABLE accounts until states implement them.
To learn more about the ABLE Act read this article by Hughes, Pittman & Gupton, LLP "The New Type of 529 Plan."
Additional article on the ABLE Act:
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