afordable care actAfter eight long years urging passage by the US House and Senate, the ABLE Act was signed into law by President Obama in December of 2014.

But ten months later, no one has been able to open an ABLE Account. Why is that, and when will we be able to do so?

As they say: “These things take time.”

The IRS Code and Final Regulations

The act was ultimately enacted as an amendment to the Internal Revenue Service Code. The IRS Code is where the entitlement to open a college savings-529 plan resides and so this was a logical place for the new law creating ABLE Accounts.

Because the accounts are governed by IRS Code, the IRS had to first enact regulations specifying how the law would be implemented. Proposed regulations were drafted and published in June 2015 and interested individuals and organizations were offered the opportunity to submit comments by September 15, 2015. The NFXF joined with others in submitting comments.

Later this month, the IRS will hold a hearing to address the comments received. Next, the IRS will issue final regulations.

Each State Will Have Their Own Version of the ABLE Act

Meanwhile, the 50 states have begun work to pass each state’s version of the ABLE Act – some faster than others. Like 529 plans, ABLE Accounts will be governed by each individual state. Here is a list of all states currently in the process of passing a state ABLE Act and their proposed bills.

States Currently working on Implementing the Able Bill

At this time NO state has completed the process and thus there is nowhere in the US you can open an ABLE Account today. But we are making progress. Thirty-one states and counting have already enacted the necessary laws. Some states are forming partnerships with other states. Others are soliciting bids from private companies to manage their programs. As we had initially predicted, we anticipate that the first ABLE Accounts will start to be offered and opened in mid-2016.

Preparing for the ABLE Act

Once your state passes its own ABLE legislation, it will be necessary to carefully review the new law. Each state’s will have unique components. For instance, in Michigan, where ABLE has passed the House and Senate and is on the Governor’s desk awaiting signature, the bill will include a provision for financial literacy training and makes interest earned exempt from state income tax.

Banks, brokerages and financial professionals are also closely following the progress of each state’s bills so they too will be ready to advise and assist in setting up ABLE Accounts. If you have a relationship with such a trusted advisor, now would be a good time to let them know that you may be interested in opening an ABLE Account. In this way, your advisor or banker can more closely monitor progress in your state and advise you as soon as an ABLE Account can be opened.

We at the NFXF are keeping a close eye on this and and have joined the ABLE National Resource Center currently in formation at the National Disability Institute to keep you updated, answer your questions or direct you to someone who can.

We’ve Still Got Work To Do!

Of course, none of this would have been possible without the tireless work of our Fragile X advocates and countless others. Year after year they called, emailed and returned to our nation’s capital to make the case for passage of the Stephen Beck Jr. ABLE Act.

Speaking of which, mark your calendars for NFXF Advocacy Day on March 1-2, 2016, so you too have a voice in the next important policy changes that await us.


Jeffrey CohenJeffrey Cohen
is the NFXF’s director of public policy and government affairs. He has previously served as a member of the NFXF Board of Directors as well as the interim executive director of the NFXF. Jeffrey has two children living with FXS who are successfully transitioning into independent and productive adults. Jeffrey holds degrees in business administration and law.