UPDATE: The tax plan signed into law on December 22, 2017 includes provisions related to 529 college savings plans and ABLE plans. Language in the bill includes the ability to rollover funds from a college savings plan to an ABLE plan. Details associated with this new legislation are currently being reviewed. Click here for more information.
In this blog series, we’re highlighting the questions our customer service team mostly frequently receives. Up next:
Can I rollover funds from a 529 college savings plan (or any tax-advantaged investment account) to an ABLE United account?
Currently, federal law (however, federal legislation moving in Congress would amend this section) only allows ABLE account rollovers from one qualified ABLE Program to another qualified ABLE Program. Therefore, individuals cannot rollover their Florida Prepaid College Plan, Florida 529 College Savings Plan, or any other tax-advantaged investment account such as a Roth-IRA or 401k into an ABLE United account. Current proposed legislation would amend Section 529 of the Internal Revenue Code to allow rollovers from qualified college 529 programs to qualified ABLE programs; but this legislation has not passed.
After hearing this information, people often ask, “What can I do with my Florida Prepaid College Plan or Florida 529 Savings Plan if the beneficiary has a disability?”
The good news is many Florida universities and colleges are offering inclusive educational services that provide individuals with intellectual disabilities an academic experience with a vocational focus in which individuals could use their Florida Prepaid Plan or Florida 529 Savings Plan. Additionally, schools have student disability resource centers to ensure reasonable accommodations are provided to help individuals with disabilities obtain a higher education.
Additionally, if the beneficiary of a Florida Prepaid Plan has a disability that would prevent them from attending an eligible educational institution, a notarized request along with a letter from the beneficiary’s physician can be submitted in order to receive a disability refund. Withdrawals from the Florida 529 Savings Plan may be classified as a disability withdrawal, but keep records to validate this type of withdrawal for the Internal Revenue Service in case they ask.
The information provided in this post is for general informational purposes only and does not constitute tax, financial, or legal advice. It is best to consult a professional to discuss your unique situation.
For information on how to rollover funds from an ABLE account into an ABLE United account, contact ABLE United customer service at 1-888-524-ABLE (2253) or by email, firstname.lastname@example.org.
If you have questions about The Florida Prepaid College Plan or the Florida 529 Savings Plan, an account specialist can be reached at 1-800-552-GRAD (4723) or by email, email@example.com
Stay tuned as we cover two more commonly asked questions about ABLE United.