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Final regulations: Guidance concerning ABLE accounts (text of final regulations)

Guidance concerning ABLE accounts

The IRS today posted on its website a version of final regulations (T.D. 9923) concerning tax-advantaged savings programs under which contributions may be made to an “achieving a better life experience” (ABLE) account for the purpose of paying for the qualified disability expenses of the designated beneficiary of the account.

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Read the version of the final regulations [PDF 612 KB] (174 pages) provided by the IRS today.

Summary

Section 529A was added to the Code in December 2014, as an effort to address the special financial burdens borne by families raising children with disabilities and the fact that increased financial needs generally continue throughout the lifetime of an individual with a disability.

In June 2015, regulations under section 529A were proposed. Subsequently, measures under section 529A were amended by legislation—more recently, the contribution limits for ABLE accounts and other provisions of section 529A were modified by the 2017 U.S. tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act” (TCJA).

To address the TCJA modifications to section 529A, Notice 2018-62 (August 2018) announced the intent of Treasury and the IRS to issue proposed regulations to implement these changes, and described the anticipated rules to implement the statutory changes. The Treasury and IRS in October 2019 released those proposed regulations. Read TaxNewsFlash

The final regulations released by the IRS today indicate that over 200 comments were submitted in response to the proposed regulations. The version of the final regulations released today by the IRS includes the following statement:

This document is in the process of being submitted to the Office of the Federal Register (OFR) for publication and will be pending placement on public display at the OFR and publication in the Federal Register. The version of the final regulations released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.

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