Congress Eliminates ABLE Residency Requirement
On December 18, 2015, President Obama signed into law H.R. 2029, the Consolidated Appropriations Act of 2016, which – along with the Omnibus – included several provisions related to our nation's tax policy commonly referred to as the “Tax Extenders Package,” or more formally known as The Protecting Americans from Tax Hikes Act of 2015. Within this piece of legislation, was a provision to eliminate the residency requirement as mandated in the Achieving a Better Life Experience (ABLE) Act.
Prior to H.R. 2029’s enactment, a qualified ABLE beneficiary could only establish an ABLE account in their particular state of residency (provided that their state was even offering an ABLE program). By allowing ABLE beneficiaries the opportunity to enroll outside of their state, individuals will now have greater options in choosing which program best meets their needs. In addition, this could mean qualified persons may have the ability to open an ABLE account much sooner than previously anticipated. In fact, the ABLE National Resource Center anticipates the first programs to open no later than mid-2016. Further, we hope that having a more open market, with respect to state ABLE programs, will produce lower fees and incentivize states to include additional ABLE account-related tax benefits, such as a state income tax deduction for ABLE account contributions.
This is an exciting time for ABLE and millions of eligible beneficiaries and their families.