The IRS regulations lay out what federal tax liabilities and protections are associated with ABLE The regulations allow states to add state tax liabilities and protections 3. Tax Benefits in Other States Six states allow a deduction or a credit for contributions to an ABLE account. Iowa, Missouri, Montana, and Nebraska all mirror the tax treatment of section 529 accounts; Utah and Oregon have somewhat different each state law and described the tax benefits in the relevant schemes. Below I’ve hyperlinked provision. Iowa: Section 78 allows a tax deduction per beneficiary per tax filer for contributions. The deduction allowed is the same as the deduction allowed for contributions to 529 accounts. In 2014 that amount, which is adjusted annually for inflation, was $3,098. Missouri: Section 166.625 allows an $8,000 tax deduction for single tax filers; $16,000 for joint tax filers. Montana: Section 11 allows a $3,000 income tax deduction for single tax filers and a $6,000 for joint tax filers Nebraska: Section 13 allows a $10,000 income tax deduction per tax return ($5,000 per year if married filing separately) Oregon: Section 5 allows a deduction for contributions made before the beneficiary turns 21 that is the lesser of: (1) $2,000 income tax deduction for single tax filers and a $4,000 deduction for joint tax filers for contributions and (2) the balance in the ABLE account at the end of the year that is carried over to the next year. Utah: Section 13 allows a 5% tax credit on the total amount of contributions. New York also has a deduction provision its bill, which is awaiting signature by the governor 4. Fiscal Impact of Tax Deductions in Maryland See Attachment E. Part 4: Additional Considerations
The IRS regulations lay out what federal tax liabilities and protections are associated with ABLE The regulations allow states to add state tax liabilities and protections 3. Tax Benefits in Other States Six states allow a deduction or a credit for contributions to an ABLE account. Iowa, Missouri, Montana, and Nebraska all mirror the tax treatment of section 529 accounts; Utah and Oregon have somewhat different schemes. Below I’ve hyperlinked each state law and described the tax benefits in the relevant provision. Iowa: Section 78 allows a tax deduction per beneficiary per tax filer for contributions. The deduction allowed is the same as the deduction allowed for contributions to 529 accounts. In 2014 that amount, which is adjusted annually for inflation, was $3,098. Missouri: Section 166.625 allows an $8,000 tax deduction for single tax filers; $16,000 for joint tax filers. Montana: Section 11 allows a $3,000 income tax deduction for single tax filers and a $6,000 for joint tax filers Nebraska: Section 13 allows a $10,000 income tax deduction per tax return ($5,000 per year if married filing separately) Oregon: Section 5 allows a deduction for contributions made before the beneficiary turns 21 that is the lesser of: (1) $2,000 income tax deduction for single tax filers and a $4,000 deduction for joint tax filers for contributions and (2) the balance in the ABLE account at the end of the year that is carried over to the next year. Utah: Section 13 allows a 5% tax credit on the total amount of contributions. New York also has a deduction provision its bill, which is awaiting signature by the governor 4. Fiscal Impact of Tax Deductions in Maryland See Attachment E. Part 4: Additional Considerations
ABLE%20Act%20Report%20Outline%209.18.docx