On December 22, 2017, President Trump signed H.R 1, the Tax Cuts and Jobs Act, into law. Three provisions in the tax reform bill impact state ABLE programs as follows:
Rollovers from 529 college savings accounts into 529A (ABLE) accounts, up to the annual maximum contribution amount, are now permitted under federal law. The state tax treatment of these rollovers is currently being determined by each individual state.
Account owners who work and earn income are permitted to make contributions into their ABLE accounts in excess of the $15,000 annual contribution limit under certain circumstances. The designated beneficiary (ABLE account owner) is responsible for ensuring compliance with the ABLE contribution limits. State ABLE programs are in the process of implementing these changes and will provide updates accordingly.
The Federal Tax Savers Credit has been extended to include contributions to ABLE accounts with some limits.
Please consult with your tax advisor for any specific guidance tailored to your situation.
For more information about Montana ABLE (the "Member Plan"), call (888) 609-3461, or visit mt.savewithable.com to obtain Plan Disclosure Documents, which include investment objectives, risks, charges, expenses, and other important information about the Member Plan. Please read and consider the Plan Disclosure Documents carefully before investing.
Before investing in any ABLE program, you should consider whether your home state offers an ABLE program that provides its taxpayers with favorable state tax or other benefits that are only available through investment in the home state's ABLE program. You also should consult your financial, tax, or other adviser to learn more about how state-based benefits (or any limitations) would apply to your specific circumstances. You also may wish to directly contact your home state's ABLE program, or any other ABLE program, to learn more about those plans' features, benefits and limitations. Keep in mind that state-based benefits should be one of many appropriately weighted factors to be considered when making an investment decision.
The Member Plan is sponsored by the state of Montana and administered by the Montana Department of Public Health and Human Services. The Member Plan is intended to be a qualified ABLE plan offered through the National ABLE Alliance. Ascensus College Savings Recordkeeping Services, LLC, the Program Manager, and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping and administrative services. The Member Plan’s Investment Options are allocations to mutual funds, ETFs, banking products and/or other investments. Except for the Checking Option, investments in the Member Plan are not insured by the FDIC. Interests in the Member Plan are municipal securities and the value of your Account will vary with market conditions.
Investment returns will vary depending upon the performance of the Investment Options you choose. You could lose all or a portion of your money by investing in the Member Plan depending on market conditions. Account Owners assume all investment risks as well as responsibility for any federal and state tax consequences.
This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under federal or state tax laws. This material is not an offer to sell or a solicitation of an offer to buy any securities. Participation in the Member Plan does not guarantee that contributions and the investment return on contributions, if any, will be adequate to cover future expenses or that an account owner is eligible to participate in the Member Plan.