McRae: Changes coming for ABLE and Mississippi College and Career Savings
By Treasurer David McRae
While most of us here in Mississippi were enjoying cookouts, fireworks, and family gatherings this Fourth of July, President Trump was at work delivering real relief to working families. He signed into law a new round of tax cuts that not only eliminates taxes on tips and overtime but also strengthens the tools families use to save for education and support children with special needs. I wanted to share how these changes could benefit your family.
Let’s start with education savings plans, commonly known as 529 accounts. These plans have always been a smart way for families to prepare for their child’s future, but thanks to the Tax Cuts and Jobs Act of 2017, they became far more flexible. For the first time, parents could use the funds they saved for more than just a traditional four-year college. Two-year colleges, apprenticeship programs, and even K-12 private school tuition all became eligible.
This year’s tax-cut bill builds on those reforms. Families can now withdraw up to $20,000 per year for K-12 expenses – double the previous limit. And the definition of “education expense” has expanded as well. Books, tutoring, testing fees, and even educational therapies for students with disabilities are now covered. For older students, 529 accounts can also be used to pursue credentialing programs that provide valuable workforce skills.
ABLE accounts, designed to help families support loved ones with disabilities, also received a number of important upgrades. For one, families can now roll funds from a 529 into an ABLE account, giving you more flexibility to put your savings where it makes the most sense.
Additionally, beneficiaries are now allowed to contribute their own employment income above the annual contribution limit – meaning Mississippians with disabilities won’t be penalized for working hard. Finally, beneficiaries may also qualify for the Saver’s Credit, a benefit made permanent under the new law.
These changes make 529 and ABLE accounts more useful than ever before. If you’ve been considering opening one, now is the perfect time. My team at the Mississippi Treasury is here to help you understand your options and get started. Visit treasury.ms.gov/collegesavings or call us at (601) 359-5255 to learn more.
If you have questions about ABLE accounts, which are administered by the Mississippi Department of Rehabilitation Services, please visit mississippiable.com or call (888) 609-3469.
At the end of the day, these tax cuts put more money back in your pocket and expand opportunities for Mississippi families. That’s something worth celebrating long after the fireworks fade.
Mississippi Treasurer David McRae is the 55th Treasurer for the State of Mississippi. In this role, he helps manage the state’s cash flow, oversees College and Career Savings Mississippi, and has returned more than $140 million in unclaimed money to Mississippians. For more information, visit Treasury.MS.gov.
