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IRS Releases Notice on ABLE Act

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IRS Releases Notice on ABLE Act

March 13, 2015
On March 10, the Internal Revenue Service (IRS) issued Notice 2015-18, which provides guidance regarding states' establishment of 529A plans under the recently-enacted Achieving a Better Life Experience (ABLE) Act. The notice advises states that they need not wait until the Treasury Department issues federal regulations or guidance implementing the ABLE Act to enact their own state-specific legislation to establish the accounts. The IRS says that if states begin to operate ABLE accounts that conflict with forthcoming federal guidance, transition relief will be provided to ensure that account holders are not adversely impacted. The notice also cautions states to ensure that the owner of an ABLE account is the designated beneficiary of the account, and also to ensure that any person with signature authority over the account not have or acquire any beneficial interest in the account. 
 
Federal regulations or guidance regarding the ABLE Act are expected to be issued on or near June 19, 2015.