Author: Terry Severson, Director of Marketing, First National Bank
The Achieving a Better Life Experience (ABLE) Act was passed in 2014 to better provide individuals and families with a tax-deferred savings option for qualified disability-related expenses. As a refresher, the following tax reforms affecting ABLE accounts have provided Enable Savings Plan Alabama Account Owners with the added flexibility of:
- Annual Contribution Limit Increase: Certain employed Account Owners may exceed the Annual Contribution Limit by the lesser of:
- The compensation included in the Account Owner’s gross income for the taxable year, or
- The federal poverty line for a one-person household.
- Rollovers: Families can now roll over funds from a 529 plan to another family member’s ABLE account. However, the ABLE Rollovers and Transfers from Section 529 Plans must be for the same beneficiary as the 529 account or for a member of the same family as the 529 account holder. The total amount of rollovers from a section 529 plan count toward the total annual contribution limit.
Enable Alabama continuously strives to support the disability community in achieving financial independence. For questions about these tax reforms please contact us at 1-866-833-7949 or via email at email@example.com.
For further background and history about the ABLE Act please check out our past blog, “The ABLE Act is Turning 4: A Recap.”