529 Plans, Coverdell ESAs, and ABLE Accounts

Author: Barbara Weltman

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2027 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

This course will cover the rules for certain tax-advantaged savings plans, namely 529 plans, Coverdell education savings accounts (or ESAs), and ABLE accounts. The focus of this course is tax-advantaged education savings plans and ABLE accounts for disabled children. It explains the tax rules governing the four major phases for these plans: contributions, maintenance, distributions, and what happens when the beneficiary dies. It is vital to recognize that different tax treatments may apply at the state level, but these rules are not covered in any detail in this course.

Publication Date: April 2024

Designed For
Practitioners assisting in education planning

Topics Covered

• Federal tax rules and other considerations for 529 plans
• Advantages and disadvantages of 529 plans
• Tax rules for distributions from 529 plans
• Coverdell ESAs, including advantages and disadvantages
• Coverdell ESA distributions
• ABLE accounts, including proposed regulations and eligibility requirements
• Contribution limits of ABLE accounts
• ABLE account rollovers and distributions

Learning Objectives

• Describe the different types of tax-advantaged savings plans for education and disabled children
• Explain the differences between 529 prepaid tuition plans and 529 college savings plans
• List the types of qualified expenses for tax-free ABLE account distributions
• Identify how many times per year are investment changes allowed in 529 plans
• Identify the maximum annual contribution per beneficiary for a Coverdell ESA

Level
Overview

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None