Notice 2015-81: Savings programs for disabled individuals under section 529A

Savings programs for disabled individuals

The IRS today released an advance version of Notice 2015-81, reporting how the IRS and Treasury Department intend to respond to comments received with respect to proposed regulations, issued in June 2015, to implement provisions under the “Achieving Better Life Experience” (ABLE) programs.

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Changes expected in final regulations

The June 2015 proposed regulations were issued under section 529A as guidance for states and state agencies to establish and maintain a new type of tax-favored savings program, under which contributions may be made to the account of an eligible disabled individual to meet qualified disability expenses. Comment were requested. Read TaxNewsFlash-United States

 

Notice 2015-81 [PDF 59 KB] explains that comments received in response to the proposed regulations, raised concerns that proposed provisions requiring a qualified ABLE program to establish certain safeguards, if unchanged in the final regulations, would impose “substantial administrative and cost burdens” on the states administering qualified ABLE programs.

Accordingly, today’s IRS notice reports that the IRS intends to revise three provisions when the regulations are finalized with respect to requirements:

  • To establish safeguards to categorize distributions from ABLE accounts
  • To request the taxpayer identification number (TIN) of each contributor to an ABLE account
  • For disability certifications, and in particular the requirement to process disability certifications with signed physicians’ diagnoses

 

Read a related IRS release: IR-2015-130 (November 20, 2015)

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