Origin: For federal tax purposes, contributions made to ABLE accounts pursuant to Internal Revenue Code ("IRC" or "Code") § 529A grow tax-deferred and can be withdrawn tax-free if used for qualified disability expenses. Section 70115 of the OBBBA modifies the inflation adjustment formula for determining the annual limit for contributions to an ABLE account. It also makes permanent the increased contribution limit, which is limited to the lesser of the applicable federal poverty level for a one-person household in the prior year, or the beneficiary's compensation for the year. The OBBBA amendment to IRC § 529A is effective for taxable years beginning after December 31, 2025. Massachusetts conforms to IRC § 529A on a current Code basis, so Massachusetts will follow the inflation adjustment formula and the permanently increased contribution limit
Origin: P.L. 119-21, § 70115; IRC § 529A
Personal Income Tax
Deferrals of Gross Income
1.109
Exemption of Earnings of ABLE Accounts
For federal tax purposes, contributions made to ABLE accounts pursuant to Internal Revenue Code ("IRC" or "Code") § 529A grow tax-deferred and can be withdrawn tax-free if used for qualified disability expenses. Section 70115 of the OBBBA modifies the inflation adjustment formula for determining the annual limit for contributions to an ABLE account. It also makes permanent the increased contribution limit, which is limited to the lesser of the applicable federal poverty level for a one-person household in the prior year, or the beneficiary's compensation for the year. The OBBBA amendment to IRC § 529A is effective for taxable years beginning after December 31, 2025. Massachusetts conforms to IRC § 529A on a current Code basis, so Massachusetts will follow the inflation adjustment formula and the permanently increased contribution limit
P.L. 119-21, § 70115; <a href="https://www.law.cornell.edu/uscode/text/26/529A" target="_blank">IRC § 529A</a>
0.3
0.3
0.3
0.3
0.3
