Thanks to the Tax Cuts and Jobs Act signed into law last year, families can now rollover funds from a 529 college savings account into an ABLE account. ABLE United recently completed the necessary legal changes to the program in order to start accepting these types of rollovers – and we’re excited to announce that this option is now available to our account holders!
It’s important to note that the Treasury stated that these rollovers are limited to a member of the family according to section 529 of the IRS code. Section 529 has a broader definition of “member of the family” than section 529a, which ABLE accounts fall under.
Section 529 defines member of the family as (1) a son or daughter, or a descendant of either; (2) a stepson or stepdaughter; (3) a brother, sister, stepbrother, or stepsister; (4) the father or mother, or an ancestor of either; (5) a stepfather or stepmother; (6) a son or daughter of a brother or sister; (7) a brother or sister of the father or mother; (8) a son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law; or (9) the spouse of the Beneficiary or the spouse of any individual described in (1) through (8) above.
This direction from the Treasury also allows for extended family with unused 529 college savings accounts the ability to contribute to a family member’s ABLE account and help them Achieve a Better Life Experience.
Now families who were saving for higher education expenses for their child with a disability have the opportunity to rollover funds to an ABLE account – although, these type of rollovers
do count towards the $15,000 annual maximum contribution limit. So, if there is a remaining balance in the 529 college savings account after completing this rollover, we encourage you to take advantage of initiating another rollover each calendar year.
To make things easier, we have provided a rollover form to help assist you in rolling over these accounts. For more information on how to save tax-free with ABLE United, watch our latest webinar or contact a customer service representative today at 1-888-524-2253.