Internal Revenue Bulletin 2020-50 (PDF rendition): IRS Revenue Rulings

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Bulletin No. 2020–50
December 7, 2020
HIGHLIGHTS
OF THIS ISSUE
These synopses are intended only as aids to the reader in
identifying the subject matter covered. They may not be
relied upon as authoritative interpretations.
EMPLOYEE PLANS
NOTICE 2020-83, page 1597.
This notice contains the 2020 Required Amendments List for
qualified individually designed plans and § 403(b) individually
designed plans.
EXEMPT ORGANIZATIONS
T.D. 9923, page 1554.
This document contains final regulations under section 529A
of the Internal Revenue Code that provide guidance regard-
ing programs under the Stephen Beck, Jr., Achieving a Better
Life Experience (ABLE) Act of 2014. Section 529A provides
rules under which States may establish and maintain a new
type of tax-favored savings program through which contri-
butions may be made to the account of an eligible disabled
individual to meet qualified disability expenses. These ac-
counts also receive favorable treatment for purposes of cer-
tain means-tested Federal programs. This document also
contains final regulations under the Tax Cuts and Jobs Act of
2017 (TCJA), which modified the contribution limits and oth-
er provisions of section 529A. In addition, these regulations
provide corresponding amendments to regulations under
sections 511 and 513, with respect to unrelated business
taxable income, sections 2501, 2503, 2511, 2642 and
2652, with respect to gift and generation-skipping transfer
taxes, and section 6011, with respect to reporting require-
ments.
INCOME TAX
REV. PROC. 2020-51, page 1599.
This revenue procedure provides a safe harbor for taxpayers
in one of two situations to allow them to deduct certain ex-
penses on their 2020 or later year return.
REV. RUL. 2020-26, page 1550.
Federal rates; adjusted federal rates; adjusted federal long-
term rate, and the long-term tax exempt rate. For purposes
of sections 382, 1274, 1288, 7872 and other sections of
the Code, tables set forth the rates for December 2020.
REV. RUL. 2020-27, page 1552.
This revenue ruling holds that a taxpayer cannot claim de-
ductions for certain payments on its 2020 return when the
taxpayer received Paycheck Protection Program (PPP) loan
proceeds and has requested PPP loan forgiveness, but has
not received notice from the lender whether the PPP loan has
been forgiven at the end of 2020.
Finding Lists begin on page ii.

The IRS Mission
Provide America’s taxpayers top-quality service by helping
them understand and meet their tax responsibilities and en-
force the law with integrity and fairness to all.
Introduction
The Internal Revenue Bulletin is the authoritative instrument
of the Commissioner of Internal Revenue for announcing of-
ficial rulings and procedures of the Internal Revenue Service
and for publishing Treasury Decisions, Executive Orders, Tax
Conventions, legislation, court decisions, and other items of
general interest. It is published weekly.
It is the policy of the Service to publish in the Bulletin all sub-
stantive rulings necessary to promote a uniform application
of the tax laws, including all rulings that supersede, revoke,
modify, or amend any of those previously published in the
Bulletin. All published rulings apply retroactively unless other-
wise indicated. Procedures relating solely to matters of inter-
nal management are not published; however, statements of
internal practices and procedures that affect the rights and
duties of taxpayers are published.
Revenue rulings represent the conclusions of the Service
on the application of the law to the pivotal facts stated in
the revenue ruling. In those based on positions taken in rul-
ings to taxpayers or technical advice to Service field offices,
identifying details and information of a confidential nature are
deleted to prevent unwarranted invasions of privacy and to
comply with statutory requirements.
Rulings and procedures reported in the Bulletin do not have the
force and effect of Treasury Department Regulations, but they
may be used as precedents. Unpublished rulings will not be
relied on, used, or cited as precedents by Service personnel in
the disposition of other cases. In applying published rulings and
procedures, the effect of subsequent legislation, regulations,
court decisions, rulings, and procedures must be considered,
and Service personnel and others concerned are cautioned
against reaching the same conclusions in other cases unless
the facts and circumstances are substantially the same.
The Bulletin is divided into four parts as follows:
Part I.—1986 Code.
This part includes rulings and decisions based on provisions
of the Internal Revenue Code of 1986.
Part II.—Treaties and Tax Legislation.
This part is divided into two subparts as follows: Subpart A,
Tax Conventions and Other Related Items, and Subpart B,
Legislation and Related Committee Reports.
Part III.—Administrative, Procedural, and Miscellaneous.
To the extent practicable, pertinent cross references to these
subjects are contained in the other Parts and Subparts. Also
included in this part are Bank Secrecy Act Administrative
Rulings. Bank Secrecy Act Administrative Rulings are issued
by the Department of the Treasury’s Office of the Assistant
Secretary (Enforcement).
Part IV.—Items of General Interest.
This part includes notices of proposed rulemakings, disbar-
ment and suspension lists, and announcements.
The last Bulletin for each month includes a cumulative index
for the matters published during the preceding months. These
monthly indexes are cumulated on a semiannual basis, and are
published in the last Bulletin of each semiannual period.
The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.
December 7, 2020 Bulletin No. 2020–50

Part I
Section 1274.—
Determination of Issue
Price in the Case of Certain
Debt Instruments Issued for
Property
(Also Sections 42, 280G, 382, 467, 468, 482, 483,
1288, 7520, 7872.)
Rev. Rul. 2020-26
This revenue ruling provides various
prescribed rates for federal income tax
purposes for December 2020 (the cur-
rent month). Table 1 contains the short-
term, mid-term, and long-term applica-
ble federal rates (AFR) for the current
month for purposes of section 1274(d)
of the Internal Revenue Code. Table 2
contains the short-term, mid-term, and
long-term adjusted applicable federal
rates (adjusted AFR) for the current
month for purposes of section 1288(b).
Table 3 sets forth the adjusted feder-
al long-term rate and the long-term
tax-exempt rate described in section
382(f). Table 4 contains the appropri-
ate percentages for determining the
low-income housing credit described in
section 42(b)(1) for buildings placed in
service during the current month. How-
ever, under section 42(b)(2), the appli-
cable percentage for non-federally sub-
sidized new buildings placed in service
after July 30, 2008, shall not be less
than 9%. Finally, Table 5 contains the
federal rate for determining the present
value of an annuity, an interest for life
or for a term of years, or a remainder or
a reversionary interest for purposes of
section 7520.
REV. RUL. 2020-26 TABLE 1
Applicable Federal Rates (AFR) for December 2020
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term
AFR 0.15%0.15%0.15% 0.15%
110% AFR 0.17%0.17%0.17%0.17%
120% AFR 0.18%0.18%0.18%0.18%
130% AFR 0.20%0.20%0.20%0.20%
Mid-term
AFR0.48%0.48%0.48%0.48%
110% AFR0.53%0.53%0.53%0.53%
120% AFR0.58%0.58%0.58%0.58%
130% AFR0.62%0.62%0.62%0.62%
150% AFR0.72%0.72%0.72%0.72%
175% AFR0.84%0.84%0.84%0.84%
Long-term
AFR1.31% 1.31%1.31%1.31%
110% AFR1.45%1.44%1.44%1.44%
120% AFR1.58%1.57%1.57%1.56%
130% AFR1.71%1.70%1.70%1.69%
REV. RUL. 2020-26 TABLE 2
Adjusted AFR for December 2020
Period for Compounding
AnnualSemiannualQuarterlyMonthly
Short-term adjusted AFR0.11%0.11%0.11%0.11%
Mid-term adjusted AFR0.36%0.36%0.36%0.36%
Long-term adjusted AFR0.99%0.99%0.99%0.99%
December 7, 2020 1550 Bulletin No. 2020–50

REV. RUL. 2020-26 TABLE 3
Rates Under Section 382 for December 2020
Adjusted federal long-term rate for the current month.99%
Long-term tax-exempt rate for ownership changes during the current month (the highest of
the adjusted federal long-term rates for the current month and the prior two months.)
.99%
REV. RUL. 2020-26 TABLE 4
Appropriate Percentages Under Section 42(b)(1) for December 2020
Note: Under section 42(b)(2), the applicable percentage for non-federally subsidized new buildings placed in service after July
30, 2008, shall not be less than 9%.
Appropriate percentage for the 70% present value low-income housing credit7.20%
Appropriate percentage for the 30% present value low-income housing credit 3.09%
REV. RUL. 2020-26 TABLE 5
Rate Under Section 7520 for December 2020
Applicable federal rate for determining the present value of an annuity, an interest for life or
a term of years, or a remainder or reversionary interest
.6%
Section 42.—Low-Income
Housing Credit
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.
Section 280G.—Golden
Parachute Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.
Section 382.—Limitation
on Net Operating Loss
Carryforwards and
Certain Built-In Losses
Following Ownership
Change
The adjusted applicable federal long-term rate
is set forth for the month of December 2020. See
Rev. Rul. 2020-26, page 1550.
Section 467.—Certain
Payments for the Use of
Property or Services
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.
Section 468.—Special
Rules for Mining and Solid
Waste Reclamation and
Closing Costs
The applicable federal short-term rates are set
forth for the month of December 2020. See Rev.
Rul. 2020-26, page 1550.
Section 482.—Allocation
of Income and Deductions
Among Taxpayers
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.

Section 483.—Interest on
Certain Deferred Payments
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.
Section 1288.—Treatment
of Original Issue Discount
on Tax-Exempt Obligations
The adjusted applicable federal short-term, mid-
term, and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.
Section 7520.—Valuation
Tables
The applicable federal mid-term rates are set
forth for the month of December 2020. See Rev.
Rul. 2020-26, page 1550.
Section 7872.—Treatment
of Loans With Below-
Market Interest Rates
The applicable federal short-term, mid-term,
and long-term rates are set forth for the month of
December 2020. See Rev. Rul. 2020-26, page 1550.

Bulletin No. 2020–50 1551 December 7, 2020

December 7, 2020 1552 Bulletin No. 2020–50
Deductibility of PPP
Expenses
Rev. Rul. 2020-27
ISSUE
May a taxpayer that received a loan
guaranteed under the Paycheck Protection
Program (PPP) authorized under section
7(a)(36) of the Small Business Act (15
U.S.C. 636(a)(36)) (covered loan), and
paid or incurred certain otherwise deduct-
ible expenses listed in section 1106(b) of
the Coronavirus Aid, Relief, and Econom-
ic Security Act (CARES Act), Pub. L. No.
116-136, 134 Stat. 281 (March 27, 2020)
deduct those expenses in the taxable year
in which the expenses were paid or in-
curred if, at the end of such taxable year,
the taxpayer reasonably expects to receive
forgiveness of the covered loan based on
the otherwise deductible expenses?
FACTS
In each of the following situations, the
taxpayer computes taxable income on the
basis of the calendar year for federal in-
come tax purposes and received a covered
loan from a private lender in 2020.
Situation 1. During the period beginning
on February 15, 2020, and ending on De-
cember 31, 2020 (covered period), Taxpay-
er A (A) paid expenses that are described in
section 161 of the Internal Revenue Code
(Code) and section 1106(a) of the CARES
Act (eligible expenses). These expenses in-
clude payroll costs that qualify under sec-
tion 1106(a)(8) of the CARES Act, interest
on a mortgage that qualifies as interest on
a covered mortgage obligation under sec-
tion 1106(a)(2) of the CARES Act, utility
payments that qualify as covered utility
payments under section 1106(a)(5) of the
CARES Act, and rent that qualifies as pay-
ment on a covered rent obligation under
section 1106(a)(4) of the CARES Act. In
November 2020, pursuant to the terms of
section 1106 of the CARES Act, A applied
to the lender for forgiveness of the covered
loan on the basis of the eligible expenses
it paid during the covered period. At that
time, and based on A’s payment of the eli-
gible expenses, A satisfied all requirements
under section 1106 of the CARES Act for
forgiveness of the covered loan. The lender
does not inform A whether the loan will be
forgiven before the end of 2020.
Situation 2. During the covered period,
Taxpayer B (B) paid the same types of
eligible expenses that A paid in Situation
1. B, unlike A, did not apply for forgive-
ness of the covered loan before the end of
2020, although, taking into account B’s
payment of the eligible expenses during
the covered period, B satisfied all other
requirements under section 1106 of the
CARES Act for forgiveness of the covered
loan. B expects to apply to the lender for
forgiveness of the covered loan in 2021.
L AW
Section 1102 and 1106 of the CARES
Act, established the PPP as a new loan
program administered by the U.S. Small
Business Administration (SBA) as part of
its section 7(a) Loan Program (15 U.S.C.
636(a)) that was designed to assist small
businesses nationwide adversely impacted
by the COVID–19 emergency to pay payroll
costs and other covered expenses. See Busi-
ness Loan Program Temporary Changes;
Paycheck Protection Program, 85 FR 20811
(April 15, 2020). Under the PPP, the SBA
is permitted to guarantee the full principal
amount of a covered loan. Under section
1102(a)(2) of the CARES Act, a covered
loan is a loan made under the PPP during
the covered period. A covered loan may be
forgiven under section 1106 of the CARES
Act, based on certain eligible expenses being
paid or incurred during the covered period.
The covered period for making loans
was initially the period beginning on
February 15, 2020 and ending on June
30, 2020. See section 1102(a)(2) of the
CARES Act. The Paycheck Protection
Program Flexibility Act of 2020, Pub. L.
No. 116-142, 134 Stat. 641 (June 5, 2020),
extended the end date of the covered peri-
od for making loans from June 30, 2020 to
December 31, 2020.
An individual or entity that is eligible
to receive a covered loan (eligible recip-
ient) can receive forgiveness of the full
principal amount of the covered loan up to
an amount equal to the following eligible
expenses that are paid or incurred during
the covered period: (1) payroll costs, (2)
interest on a covered mortgage obligation,
(3) any covered rent obligation payment,
and (4) any covered utility payment. See
section 1106(b) of the CARES Act.
Under section 1106(i) of the CARES
Act, for purposes of the Code “any
amount which (but for [section 1106(i)])
would be includible in gross income of
the eligible recipient by reason of forgive-
ness described in [section 1106](b) shall
be excluded from gross income.” Sec-
tion 1106(i) of the CARES Act excludes
the forgiven amounts from gross income
regardless of whether the income would
be (1) income from the discharge of in-
debtedness under section 61(a)(11) of the
Code, or (2) otherwise includible in gross
income under section 61 of the Code.
On May 2, 2020, the Department of the
Treasury and the Internal Revenue Service
(IRS) released Notice 2020-32, 2020-21
IRB 837 (May 18, 2020), which clarifies
that no deduction is allowed for an eligi-
ble expense that is otherwise deductible if
the payment of the eligible expense results
in forgiveness of a covered loan. Notice
2020-32 relied on section 265(a)(1) of
the Code and §1.265-1 of the Income Tax
Regulations, which provide that no deduc-
tion is allowed for any amount otherwise
allowable as a deduction to the extent the
amount is allocable to one or more classes
of income other than interest wholly ex-
empt from the taxes imposed by subtitle A
of the Code. See generally section 265(a)
(1); §1.265-1. This rule applies “whether
or not any amount of income of that class
or classes is received or accrued.” Id. The
term “class of exempt income” means any
class of income that is either wholly ex-
cluded from gross income under any pro-
vision of subtitle A of the Code or wholly
exempt from the taxes imposed by subtitle
A of the Code under the provisions of any
other law. See §1.265-1(b)(1).
Notice 2020-32 also relied on authori-
ties holding that deductions for otherwise
deductible expenses are disallowed if the
taxpayer receives reimbursement for such
expenses. Authorities addressing reim-
bursement further hold that an otherwise
allowable deduction is disallowed if there
is a reasonable expectation of reimburse-
ment. See Burnett v. Commissioner, 356
F. 2d 755 (5th Cir. 1966) cert. denied 385
U.S. 832 (1966); Canelo v. Commission-
er, 53 TC 217, 225-226 (1969), aff ’d 447
F.2d 484 (9th Cir.1971); Charles Baloian
Co. v. Commissioner, 68 T.C. 620 (1977);

Bulletin No. 2020–50 1553 December 7, 2020
Rev. Rul. 80-348, 1980-2 C.B. 60; Rev.
Rul. 79-263, 1979-2 C.B. 82.
In Burnett, a lawyer advanced expens-
es to clients that the clients were obligat-
ed to repay only to the extent the lawyer
was successful in obtaining recovery on
the client’s claim. The taxpayer argued
that the advances were deductible trade
or business expenses under section 162 of
the Code because there was no uncondi-
tional obligation on the part of the clients
to repay the advances. The court noted
that the taxpayer provided assistance only
to clients with claims that were likely to
be successful and that the advances were
“made to clients with the expectation, sub-
stantially realized, that they would be re-
covered.” 356 F.2d at 758. On that basis,
the court affirmed the Tax Court’s holding
that the advances were not deductible.
Similarly, in Canelo v. Commissioner, 53
TC 217, 225-226 (1969), aff ’d 447 F.2d
484 (9th Cir.1971), a personal injury law
firm advanced litigation costs on behalf
of its clients, and the clients had no obli-
gation to repay the costs unless their case
was successful. The law firm deducted the
litigation costs in the year paid and in-
cluded the reimbursed costs in income in
the year of reimbursement. The law firm
screened clients to reduce the risk that the
advanced costs would not be repaid and
took cases when there was a “good hope”
of recovery. The court determined that the
law firm’s advances operated as loans to
its clients for which the law firm had an
expectation of reimbursement. Therefore,
deductions for the advances under section
162 were not allowed. See also Herrick v.
Commissioner, 63 T.C. 562 (1975) (simi-
lar effect); Silverton v. Commissioner, T.C.
Memo. 1977-198 (1977) (similar effect).
Under the related “tax benefit rule,” if
a taxpayer takes a proper deduction and,
in a later tax year, an event occurs that is
fundamentally inconsistent with the prem-
ise on which the previous deduction was
based (for example, an unforeseen refund
of deducted expenses), the taxpayer must
take the deducted amount into income. See
section 111 of the Code (providing that
gross income does not include income at-
tributable to the recovery during a taxable
year of any amount deducted in any pri-
or taxable year to the extent such amount
did not reduce the amount of tax imposed
by chapter 1 of the Code). The Supreme
Court applied the tax benefit rule in Hills-
boro National Bank v. Commissioner, 460
U.S. 370 (1983). In that case, the Court
observed that “[t]he basic purpose of the
tax benefit rule is to achieve rough trans-
actional parity in tax ... and to protect the
Government and the taxpayer from the
adverse effects of reporting a transaction
on the basis of assumptions that an event
in a subsequent year proves to have been
erroneous. Such an event, unforeseen at
the time of an earlier deduction, may in
many cases require the application of the
tax benefit rule.” Id. at 383.
ANALYSIS
In both Situation 1 and Situation 2, A
and B each have a reasonable expectation
of reimbursement. At the end of 2020, the
reimbursement of A’s and B’s eligible ex-
penses, in the form of covered loan for-
giveness, is reasonably expected to occur
– rather than being unforeseeable – such
that a deduction is inappropriate. Compare
Canelo, 53 TC at 225-226 with Hillsboro,
460 U.S. at 383. Section 1106(b), (d), and
(g) of the CARES Act, and the supporting
loan forgiveness application procedures
published by the SBA, provide covered
loan recipients like A and B with clear and
readily accessible guidance to apply for
and receive covered loan forgiveness. See
www.sba.gov/funding-programs/loans/
coronavirus-relief-options/paycheck-pro-
tection-program. Under these procedures,
each taxpayer calculates the amount of its
covered loan forgiveness on the basis of
the eligible expenses paid or accrued in
the covered period and submits a com-
pleted form and supporting documenta-
tion to their covered loan lender. See PPP
Loan Forgiveness Application Form 3508.
Within 60 days of receipt of an application
for forgiveness, their covered loan lenders
must issue a decision regarding A and B’s
applications. See section 1106(g) of the
CARES Act. Accordingly, A’s and B’s el-
igible expenses are not deducible because
there is a reasonable expectation of reim-
bursement.
Section 265(a)(1) of the Code also dis-
allows any amount of A’s and B’s eligible
expenses otherwise allowable as a deduc-
tion under the Code, including section
161, to the extent the payment of such el-
igible expenses is allocable to tax-exempt
income in the form of the reasonably ex-
pected covered loan forgiveness. The fact
that the tax-exempt income may not have
been accrued or received by the end of the
taxable year does not change this result
because the disallowance applies whether
or not any amount of tax-exempt income
in the form of covered loan forgiveness
and to which the eligible expenses are al-
locable is received or accrued. See section
265(a)(1); §1.265-1(b)(1).
Situation 1.
Based on the foregoing, when A com-
pleted its application for covered loan
forgiveness, A knew the amount of its
eligible expenses that qualified for reim-
bursement, in the form of covered loan
forgiveness, and had a reasonable expec-
tation of reimbursement. The reimburse-
ment, in the form of covered loan forgive-
ness, was foreseeable. Therefore, pursuant
to the foregoing authorities, A may not
deduct A’s eligible expenses.
In the alternative, section 265(a)(1)
disallows a deduction of A’s otherwise
deductible eligible expenses because the
expenses are allocable to tax-exempt in-
come in the form of reasonably expected
covered loan forgiveness.
Situation 2.
Although B did not complete an ap-
plication for covered loan forgiveness in
2020, at the end of 2020, B satisfied all
other requirements under section 1106 of
the CARES Act for forgiveness of the cov-
ered loan and at the end of 2020 expected
to apply to the lender for covered loan
forgiveness of the covered loan in 2021.
Thus, at the end of 2020 B both knew the
amount of its eligible expenses that qual-
ified for reimbursement, in the form of
covered loan forgiveness, and had a rea-
sonable expectation of reimbursement.
The reimbursement in the form of covered
loan forgiveness was foreseeable. There-
fore, pursuant to the foregoing authorities,
B may not deduct B’s eligible expenses.
In the alternative, section 265(a)(1)
disallows a deduction of B’s otherwise
deductible eligible expenses because the
expenses are allocable to tax-exempt in-
come in the form of reasonably expected
covered loan forgiveness.

December 7, 2020 1554 Bulletin No. 2020–50
HOLDING
A taxpayer that received a covered
loan guaranteed under the PPP and paid
or incurred certain otherwise deductible
expenses listed in section 1106(b) of the
CARES Act may not deduct those expens-
es in the taxable year in which the expens-
es were paid or incurred if, at the end of
such taxable year, the taxpayer reasonably
expects to receive forgiveness of the cov-
ered loan on the basis of the expenses it
paid or accrued during the covered period,
even if the taxpayer has not submitted an
application for forgiveness of the covered
loan by the end of such taxable year.
EFFECT ON OTHER DOCUMENTS
This revenue ruling amplifies Notice
2020-32, 2020-21 IRB 837 (May 18,
2020).
DRAFTING INFORMATION
The principal authors of this reve-
nue ruling are Sarah Daya and Charles
Gorham of the Office of Associate Chief
Counsel (Income Tax & Accounting). For
further information regarding this revenue
ruling, contact Ms. Daya at (202) 317-
4891 (not a toll-free number).
26 CFR §1.529A added; 1.511-2 amended; 1.513-1
amended; 25.2501-1 amended; 25.2503-3 amended;
25.2503–6 amended; 25.2511-2 amended; 26.2642-
1 amended
T.D. 9923
DEPARTMENT OF THE
TREASURY
Internal Revenue Service
26 CFR Parts 1, 25, 26,
301, and 602
Guidance under Section
529A: Qualified ABLE
Programs
AGENCY: Internal Revenue Service
(IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains
final regulations that provide guidance
regarding programs under the Stephen
Beck, Jr., Achieving a Better Life Experi-
ence Act of 2014 (ABLE Act). The ABLE
Act provides rules under which States or
State agencies or instrumentalities may es-
tablish and maintain a Federal tax-favored
savings program for eligible individuals
with a disability who are the owners and
designated beneficiaries of accounts to
which contributions may be made to meet
qualified disability expenses. These ac-
counts also receive favorable treatment for
purposes of certain means-tested Federal
programs. In addition, these final regula-
tions provide corresponding amendments
to the unrelated business income tax reg-
ulations, the gift and generation-skipping
transfer tax regulations, and the electron-
ic filing requirements regulations. These
regulations affect eligible individuals that
are designated beneficiaries of accounts
established and maintained under the
ABLE Act.
DATES: Effective date: These final regu-
lations are effective November 19, 2020.
Applicability dates: For dates of appli-
cability, see §§ 1.511-2(e)(2), 1.513-(g),
1.529A-1(c), 1.529A-2(q), 1.529A-3(h),
1.529A-4(e), 1.529A-5(g), 1.529A-6(f),
1.529A-7(b), 1.529A-8(a), and 301.6011-
2(g).
FOR FURTHER INFORMATION
CONTACT: Concerning the final regula-
tions under section 529A, Taina Edlund,
(202) 317-4541, or Julia Parnell, (202)
317-4086; concerning the estate and gift
tax regulations, Lorraine Gardner, (202)
317-4645, or Daniel Gespass, (202) 317-
4632; concerning the reporting provisions
under section 529A, Isaac Brooks, (202)
317-6844 (not toll-free numbers).
SUPPLEMENTARY INFORMATION:
Background
This document contains final regula-
tions amending 26 CFR parts 1, 25, 26
and 301, to provide guidance under sec-
tion 529A of the Internal Revenue Code
(Code). Section 529A provides rules
under which States or State agencies
or instrumentalities may establish and
maintain a Federal tax-favored savings
program through which contributions may
be made to the account of an eligible indi-
vidual with a disability to meet qualified
disability expenses.
1. The ABLE Act
Section 529A was added to the Code
on December 19, 2014, by the ABLE Act,
which was enacted as part of the Tax In-
crease Prevention Act of 2014, Public
Law 113-295 (128 Stat. 4010). The stat-
utory requirements of section 529A apply
to taxable years beginning after December
31, 2014.
Congress recognized the special fi-
nancial burdens borne by families raising
children with disabilities and the fact that
increased financial needs generally con-
tinue throughout the lifetime of an indi-
vidual with a disability. Section 101 of the
ABLE Act confirms that one of the ABLE
Act’s purposes is to “provide secure fund-
ing for disability-related expenses on
behalf of designated beneficiaries with
disabilities that will supplement, but not
supplant, benefits” otherwise available to
those individuals, whether through private
sources, employment, public programs,
or otherwise. Before the enactment of
the ABLE Act, various types of Federal
tax-advantaged savings arrangements ex-
isted, but none adequately served the goal
of promoting saving for those supplemen-
tal financial needs.
Section 529A allows the creation of a
qualified ABLE program by a State (or
agency or instrumentality thereof) under
which a separate ABLE account may be
established for an eligible individual with
a disability who is the designated benefi-
ciary and owner of that account. General-
ly, contributions to an ABLE account are
subject to both an annual limit and a cu-
mulative limit, and, when made by a per-
son other than the designated beneficiary,
are treated as gifts to the designated bene-
ficiary. These gifts may be sheltered from
Federal gift tax by the annual per-donee
gift tax exclusion. Distributions from an
ABLE account for the qualified disability
expenses of the designated beneficiary are
not included in the designated beneficia-
ry’s gross income. However, the earnings
portion of distributions from an ABLE

Bulletin No. 2020–50 1555 December 7, 2020
account in excess of the qualified disabil-
ity expenses generally is includible in the
gross income of the designated beneficia-
ry. An ABLE account may be used for the
long-term benefit or short-term needs of
the designated beneficiary.
Section 103 of the ABLE Act, while
not a tax provision, is critical to achiev-
ing the goal of the ABLE Act of providing
financial resources for the benefit of indi-
viduals with disabilities. Because so many
of the programs that provide essential fi-
nancial, occupational, and other resources
and services to individuals with disabili-
ties are available only to persons whose
resources and income do not exceed rela-
tively low dollar limits, section 103 gener-
ally disregards a designated beneficiary’s
ABLE account (specifically, the account
balance, contributions to the account, and
distributions from the account) for pur-
poses of determining the designated bene-
ficiary’s eligibility for, and the amount of
any assistance or benefits provided under,
certain means-tested Federal programs.
However, in the case of the Supplemental
Security Income (SSI) program under title
XVI of the Social Security Act, distribu-
tions for certain housing expenses are not
disregarded, and the balance (including
earnings) in an ABLE account is consid-
ered a resource of the designated benefi-
ciary to the extent it exceeds $100,000.
Section 103 also addresses the impact of
an excess balance in an ABLE account on
the designated beneficiary’s eligibility for
benefits under the SSI program and Med-
icaid.
Finally, section 104 of the ABLE Act
addresses the treatment of ABLE accounts
in bankruptcy proceedings.
2. Guidance
A. Notice 2015-18
Shortly after the ABLE Act was en-
acted, the Department of the Treasury
(Treasury Department) and the IRS were
advised that several state legislatures were
in the process of enacting enabling legis-
lation, and ABLE programs might be in
operation in some states before guidance
under section 529A could be issued by the
Treasury Department and the IRS. In order
to prevent the lack of regulatory guidance
from discouraging states to enact enabling
legislation and create ABLE programs,
the Treasury Department and the IRS is-
sued Notice 2015-18, 2015-12 I.R.B. 765
(March 23, 2015). The Notice provided
that future section 529A guidance would
confirm that the owner of an ABLE ac-
count is the designated beneficiary of the
account, and that a person with signature
authority over the account (if other than
the account’s designated beneficiary) may
neither have nor acquire any beneficial
interest in the ABLE account and must
administer the account for the designated
beneficiary of the account. The Notice fur-
ther provided that, in the event that State
legislation creating an ABLE program
enacted in accordance with section 529A
prior to the issuance of guidance does not
fully comport with the guidance when
issued, the Treasury Department and the
IRS intended to provide transition relief
to give the States sufficient time to imple-
ment the changes necessary to avoid the
disqualification of the program and of the
ABLE accounts already established under
the program.
B. 2015 proposed regulations
On June 22, 2015, the Treasury De-
partment and the IRS published a notice
of proposed rulemaking (NPRM) in the
Federal Register (REG-102837-15; 80
FR 35602) proposing regulations under
section 529A regarding programs under
the ABLE Act (2015 proposed regula-
tions). The 2015 proposed regulations
set forth the requirements a program es-
tablished and maintained by a State, or
agency or instrumentality thereof, must
satisfy to be considered a qualified ABLE
program under section 529A. They cov-
ered the requirements for establishing an
ABLE account (including those that an
individual must satisfy to be an eligible
individual qualified to be the designated
beneficiary of an ABLE account) and the
requirements concerning contributions to
an ABLE account (including the limita-
tions on the amount and investment of
such contributions). In addition, the 2015
proposed regulations addressed the gift
and generation-skipping transfer (GST)
tax consequences of contributions to an
ABLE account, as well as the Federal in-
come, gift, and estate tax consequences
of distributions from, and changes in the
designated beneficiary of, an ABLE ac-
count. The 2015 proposed regulations also
provided guidance on requirements with
respect to rollovers and program-to-pro-
gram transfers from one ABLE account
to another and on the recordkeeping and
reporting requirements of a qualified
ABLE program. Finally, the 2015 pro-
posed regulations provided corresponding
amendments to regulations under sections
511 and 513 (with respect to unrelated
business taxable income), sections 2501,
2503, 2511, 2642, and 2652 (with respect
to gift and GST taxes), and section 6011
(with respect to electronic filing require-
ments).
C. Notice 2015-81
More than 200 written comments were
received in response to the 2015 proposed
regulations and a public hearing was held
on October 14, 2015. Numerous com-
menters asked the Treasury Department
and the IRS to issue interim guidance to
address three requirements under the pro-
posed regulations that they said would cre-
ate significant barriers to the development
of qualified ABLE programs by the States:
(i) the requirement to establish safeguards
to categorize distributions from an ABLE
account; (ii) the requirement to request
the taxpayer identification number (TIN)
of every contributor to an ABLE account;
and (iii) the requirement to process dis-
ability certifications with signed physi-
cians’ diagnoses.
In response to the request for interim
guidance, the Treasury Department and
the IRS published Notice 2015-81, 2015-
49 I.R.B. 784 (Dec. 7, 2015), advising
that the final regulations would address
these requirements in the following man-
ner: First, the final regulations would
eliminate the requirement that a qualified
ABLE program distinguish between types
of expenses. Second, the final regulations
would eliminate the requirement that a
qualified ABLE program must request
the TIN of each contributor at the time a
contribution is made if the program has a
system in place to identify and reject ex-
cess contributions and excess aggregate
contributions before they are deposited
into an ABLE account. Third, the final
regulations would permit a certification
of eligibility to satisfy the requirement for

December 7, 2020 1556 Bulletin No. 2020–50
filing a disability certification. A certifica-
tion of eligibility is a certification, under
penalties of perjury, that the individual
(or the individual’s agent under a power
of attorney or a parent or legal guardian
of the individual) has a signed physician’s
diagnosis, and that the signed diagnosis
will be retained and provided to the ABLE
program or the IRS on request.
3. The PATH Act Amendment
On December 18, 2015, Section 303 of
the Protecting Americans from Tax Hikes
Act of 2015 (the PATH Act), was enacted
as part of the Consolidated Appropriations
Act, 2016, Public Law 114-113 (129 Stat.
2242). The PATH Act amended section
529A(b)(1), effective for taxable years
beginning after December 31, 2014, by
removing the requirement that a State’s
qualified ABLE program allow the estab-
lishment of an ABLE account only for a
designated beneficiary who is a resident of
that State or of a contracting State.
4. The TCJA
The contribution limits and other pro-
visions of section 529A were modified by
the Tax Cuts and Jobs Act, Public Law
115-97, 131 Stat. 2054, (2017) (TCJA),
signed into law on December 22, 2017.
The TCJA amended section 529A(b)(2)
(B) to allow an employed designated ben-
eficiary described in new section 529A(b)
(7) to contribute, prior to January 1,
2026, an additional amount in excess
of the limit in section 529A(b)(2)(B)
(i) (the annual gift tax exclusion amount
in section 2503(b), formerly set forth in
section 529A(b)(2)(B)). This additional
permissible contribution is subject to its
own limit as described in section 529A(b)
(2)(B)(ii). Specifically, this additional
contributed amount may not exceed the
lesser of (i) the designated beneficiary’s
compensation as defined by section 219(f)
(1) for the taxable year, or (ii) an amount
equal to the poverty line for a one-person
household for the calendar year preceding
the calendar year in which the taxable year
begins. The TCJA also amended the sec-
tion 529A(b)(2) flush language to require
the designated beneficiary, or a person act-
ing on behalf of the designated beneficia-
ry, to maintain adequate records to ensure,
and to be responsible for ensuring, that the
requirements of section 529A(b)(2)(B)(ii)
are met.
New section 529A(b)(7)(A) identi-
fies a designated beneficiary eligible to
make this additional contribution as one
who is an employee (including a self-em-
ployed individual) with respect to whom
there has been no contribution made for
the taxable year to: a defined contribution
plan meeting the requirements of sections
401(a) or 403(a); an annuity contract de-
scribed in section 403(b); or an eligible
deferred contribution plan under section
457(b). Section 529A(b)(7)(B) defines the
term “poverty line” as having the meaning
provided in section 673 of the Communi-
ty Services Block Grant Act (42 U.S.C.
9902).
The TCJA also amended section 529
(regarding qualified tuition programs) to
allow, before January 1, 2026, a limited
amount to be rolled over to an ABLE ac-
count from the designated beneficiary’s
own section 529 qualified tuition program
(QTP) account or from the QTP account
of certain family members. The TCJA
added section 529(c)(3)(C)(i)(III), which
provides that a distribution from a QTP
made after December 22, 2017, and before
January 1, 2026, is not subject to income
tax if, within 60 days of the distribution, it
is transferred to an ABLE account of the
designated beneficiary or a member of the
family of the designated beneficiary. Un-
der section 529(c)(3)(C)(i), the amount of
any rollover to an ABLE account is limited
to the amount that, when added to all other
contributions made to the ABLE account
for the taxable year, does not exceed the
contribution limit for the ABLE account
under section 529A(b)(2)(B)(i), that is,
the annual gift tax exclusion amount un-
der section 2503(b). This limited rollover
is described in more detail in Notice 2018-
58, 2018-33 I.R.B. 305 (Aug. 13, 2018).
A. Notice 2018-62
To address the TCJA modifications to
section 529A, the Treasury Department
and the IRS published Notice 2018-62,
2018-34 I.R.B. 316 (Aug. 20, 2018),
which announced the intent of the Trea-
sury Department and the IRS to issue
proposed regulations to implement these
changes and describes the anticipated
rules to implement the statutory changes.
No comments were received in response
to the Notice.
B. 2019 proposed regulations
On October 10, 2019, the Treasury De-
partment and the IRS published an NPRM
in the Federal Register (REG-128246-
18; 84 FR 54529) to address the TCJA
modifications to section 529A (2019 pro-
posed regulations).
The 2019 proposed regulations con-
firmed that the employed designated ben-
eficiary, or the person acting on his or her
behalf, is solely responsible for ensuring
that the requirements in section 529A(b)
(2)(B)(ii) are met and for maintaining
adequate records for that purpose. In ad-
dition, to minimize burdens for the desig-
nated beneficiary and the qualified ABLE
program, the 2019 proposed regulations
provided that ABLE programs may allow
a designated beneficiary or the person act-
ing on his or her behalf to certify, under
penalties of perjury, that he or she is a des-
ignated beneficiary described in section
529A(b)(7) and that his or her contribu-
tions of compensation do not exceed the
limit set forth in section 529A(b)(2)(B)
(ii).
The 2019 proposed regulations also
clarified that the poverty line in section
529A(b)(7)(B) is to be determined by
using the poverty guidelines updated pe-
riodically in the Federal Register by the
U.S. Department of Health and Human
Services under the authority of 42 U.S.C.
9902(2). Those guidelines vary based on
locality. Specifically, there are separate
guidelines for (1) the contiguous 48 states
and the District of Columbia, (2) Alaska,
and (3) Hawaii. Because the Treasury
Department and the IRS concluded that
the poverty guideline that most closely
reflects the employed designated benefi-
ciary’s cost of living is the most relevant
for determining the contribution limit, the
2019 proposed regulations provided that
a designated beneficiary’s contribution
limit is to be determined using the poverty
guideline applicable in the state of the des-
ignated beneficiary’s residence.
Because section 529A(b)(2) provides
that rules similar to those set forth in sec-
tion 408(d)(4) regarding the return of ex-
cess contributions to an individual retire-

Bulletin No. 2020–50 1557 December 7, 2020
ment account or annuity apply to ABLE
accounts, the 2019 proposed regulations
provided that a qualified ABLE program
must return any contributions of the des-
ignated beneficiary’s compensation in ex-
cess of the limit in section 529A(b)(2)(B)
(ii) to the designated beneficiary.
The 2019 proposed regulations also
provided that it will be the sole respon-
sibility of the designated beneficiary (or
the person acting on the designated bene-
ficiary’s behalf) to identify and request the
return of any excess contribution of such
compensation income. Such returns of
excess compensation contributions must
be received by the employed designated
beneficiary on or before the due date (in-
cluding extensions) of the designated ben-
eficiary’s income tax return for the year in
which the excess compensation contribu-
tions were made. A failure to return excess
contributions within this time period will
result in the imposition on the designated
beneficiary of a 6 percent excise tax under
section 4973(a)(6) on the amount of ex-
cess compensation contributions.
Finally, in order to minimize adminis-
trative burdens for the designated bene-
ficiary and the qualified ABLE program,
for purposes of ensuring that the limit on
contributions made under section 529A(b)
(2)(B)(ii) is not exceeded, the 2019 pro-
posed regulations provided that a qualified
ABLE program may rely on self-certifica-
tions, made under penalties of perjury, of
the designated beneficiary or the person
acting on the designated beneficiary’s be-
half.
Six comments were received in re-
sponse to the 2019 proposed regulations.
No public hearing was requested or held.
Summary of Comments and
Explanation of Provisions
Approximately 200 comments were re-
ceived in response to the 2015 proposed
regulations. These comments, along with
the six comments received in response to
the 2019 proposed regulations, are dis-
cussed in this section. The Treasury De-
partment and the IRS, after consideration
of all of these comments and the changes
made to section 529A of the Code by the
PATH Act and the TCJA, adopt the 2015
and 2019 proposed regulations as amend-
ed by this Treasury decision. The com-
ments are available for public inspection
at www.regulations.gov or on request.
These final regulations provide guid-
ance on the requirements a program es-
tablished and maintained by a State, or
agency or instrumentality thereof, must
satisfy to be considered a qualified ABLE
program under section 529A. They also
address the requirements for establishing
an ABLE account, for qualifying as an eli-
gible individual and thus a qualified desig-
nated beneficiary of an ABLE account and
for contributions to an ABLE account, in-
cluding the limitations on the amount and
investment of such contributions. These
final regulations also provide rules regard-
ing changes in the designated beneficiary
of an ABLE account, and rollovers and
program-to-program transfers from one
ABLE account to another. In addition,
these final regulations provide guidance
on the gift and GST tax consequences of
contributions to an ABLE account, as well
as on the Federal income, gift, and estate
tax consequences of distributions from,
and changes in the designated beneficiary
of, an ABLE account. Finally, these final
regulations provide guidance on the re-
cordkeeping and reporting requirements
of a qualified ABLE program.
1. Qualified ABLE Programs
A. Established and maintained by a State
Consistent with section 529A(b)(1),
which defines an ABLE program as a
program established and maintained
by a State, or agency or instrumentali-
ty thereof, the final regulations, like the
2015 proposed regulations, provide that
a program is established by a State, or its
agency or instrumentality, if the program
is initiated by State statute or regulation,
or by an act of a State official or agency
with the authority to act on behalf of the
State. A program is maintained by a State,
or its agency or instrumentality, if all the
terms and conditions of the program are
set by the State, or its agency or instru-
mentality, and the State, or its agency or
instrumentality, is actively involved on an
ongoing basis in the administration of the
program, including supervising decisions
relating to the investment of assets con-
tributed to the program. The final regula-
tions set forth factors that are relevant in
determining whether a State, or its agency
or instrumentality, is actively involved in
the administration of the program. Among
those factors is the nature and extent of
the State’s role in selecting and overseeing
private contractors contracted to provide
administrative or other services.
B. Community Development Financial
Institutions
The Treasury Department and the IRS
understand that many of the States will
have the entity that currently administers
its section 529 qualified tuition program
(on which section 529A was loosely mod-
eled) also administer that State’s qualified
ABLE program. However, because of
greater administrative obligations, each
qualified ABLE program is likely to have
higher costs and lower revenue to offset
those costs than the same State’s qualified
tuition program. The 2015 proposed regu-
lations suggested that, by contracting with
one or more Community Development
Financial Institutions (CDFIs)
1
to perform
some or all of the duties involved in ad-
ministering the qualified ABLE program,
a State might be able to reduce its costs,
and the cost to each owner of an ABLE
account, because the CDFI might be able
to obtain corporate or other grants to cov-
er those costs. For example, a CDFI could
provide services to facilitate distributions,
collect and report social data, solicit grants
to defray the cost of administering the pro-
gram, and apply for a financial assistance
award from the CDFI Fund, an entity es-
tablished within the Treasury Department
to promote community development in
economically distressed communities.
Several commenters expressed con-
cerns that the reference to CDFIs in the
2015 proposed regulations may lead qual-
ified ABLE program administrators to
believe that CDFIs are the preferred, or
perhaps even the sole, entities with which
they may contract for administrative and
1
CDFIs (as defined in 12 U.S.C. 4702(5) and 12 CFR 1805.104) are certified by the CDFI Fund established under 12 U.S.C. 4703. The CDFI Program (authorized by 12 U.S.C. 4704-4707)
is administered by the Treasury Department. See the CDFI Fund’s website (www.cdfifund.gov) for more detailed information and a listing of CDFIs nationwide.

December 7, 2020 1558 Bulletin No. 2020–50
other services. These commenters asked
that the final regulations clarify that or-
ganizations other than CDFIs, such as
community banks, also may perform such
services. One commenter expressed con-
cern that CFDIs will not be located where
people with disabilities and their families
would have easy access to make deposits
or withdrawals. The same commenter also
expressed concern that CFDIs would be
overwhelmed by screening and verifying
people associated with ABLE accounts.
The Treasury Department and the IRS
note that the final regulations, like the
2015 proposed regulations, do not pro-
hibit States from contracting with private
contractors for various services. Howev-
er, to increase clarity, the final regulations
specifically provide that, while a qualified
ABLE program may contract with a CDFI
for services, a qualified ABLE program
also may contract with other private con-
tractors.
Some commenters requested that the
rules applicable to qualified ABLE pro-
grams be as consistent as possible with the
rules applicable to qualified tuition pro-
grams under section 529 in order to reduce
administrative burdens and costs. Numer-
ous others requested that the process and
reporting should be made as simple and
streamlined as possible for the individuals
with a disability and their families. Others
requested as much uniformity as possi-
ble among the qualified ABLE programs,
to facilitate the movement of ABLE ac-
counts from one program to another.
The Treasury Department and the IRS
are aware of the desirability of reducing
administrative burdens and costs. The fi-
nal regulations therefore are consistent
with the rules applicable to qualified tu-
ition programs, where appropriate. How-
ever, the final regulations allow certain
flexibility in the way each ABLE program
may implement the applicable require-
ments.
C. Consortia
Several commenters asked whether
qualified ABLE programs could join to-
gether to form a consortium for the pur-
pose of offering broader investment choic-
es, streamlined program administration,
and lower fees for account holders. The
Treasury Department and the IRS view
the States’ ability to streamline adminis-
tration and lower costs as helpful in facil-
itating the establishment and maintenance
of qualified ABLE programs. Therefore,
the final regulations provide that a quali-
fied ABLE program may be maintained by
two or more States or agencies or instru-
mentalities of a State. If a State or agency
or instrumentality of a State participates in
a consortium, the consortium’s program
is considered to be the program of each
member (State or agency or instrumentali-
ty of a State) of the consortium.
D. Residency requirement
As originally enacted, section 529A(b)
(1)(C) required a qualified ABLE program
to allow for the establishment of an ABLE
account only for a designated beneficiary
who is a resident of that State or of a con-
tracting State. Consistent with the statute,
the 2015 proposed regulations required
that an ABLE account for a designated
beneficiary may be established only under
the qualified ABLE program of the State
in which that designated beneficiary is
a resident or with which the State of the
designated beneficiary’s residence has
contracted for the provision of ABLE ac-
counts.
The 2015 proposed regulations provid-
ed that, if a State does not establish and
maintain a qualified ABLE program, it
could contract with another State to pro-
vide an ABLE program for its residents.
The 2015 proposed regulations defined
“contracting State” as a State without
a qualified ABLE program of its own,
which, in order to make ABLE accounts
available to its residents who are eligible
individuals, contracts with another State
that has a program.
Many commenters asked that the final
regulations clarify whether a State with-
out an ABLE program could contract with
more than one State having an ABLE pro-
gram. Another commenter asked whether
the Federal government would allow a
State without its own qualified ABLE pro-
gram to decline to contract with another
State, and thus deprive its residents of ac-
cess to ABLE accounts.
A few commenters were in support
of the residency requirement, but several
commenters expressed hope that Congress
would amend the ABLE Act to eliminate
the residency requirement. Commenters
pointed out that the residency requirement
prevents an otherwise eligible US citizen
living abroad from having an ABLE ac-
count, and that the accounts of non-resi-
dent US citizens in a disability savings ac-
count program created under foreign law
would not receive the same tax-sheltered
benefits under US law as are accorded to
ABLE accounts. Others argued that allow-
ing an eligible individual a choice of pro-
grams would ensure quality, competitive
fees, uniformity, and other benefits for the
eligible individual.
Several commenters suggested that the
final regulations permit a qualified ABLE
program to rely on a certification under
penalties of perjury by the designated
beneficiary regarding his or her state of
residence to establish that the residency
requirement has been satisfied.
After the Treasury Department and the
IRS received these comments, the PATH
Act repealed the residency requirement.
Therefore, the final regulations eliminate
all references to a residency requirement
and to a “contracting State.” A qualified
ABLE program may allow an ABLE ac-
count to be established for an eligible in-
dividual regardless of his or her residence
and, subject to the rules of the particular
qualified ABLE program, an eligible indi-
vidual may be the designated beneficiary
of an ABLE account under the qualified
ABLE program of any State. However,
the Treasury Department and the IRS note
that the final regulations do not prohibit
a State from limiting its program to State
residents nor do they require a State to
establish or participate in an ABLE pro-
gram.
2. ABLE Accounts
A. Establishment and signatory of an
ABLE account
Section 529A(e)(3) defines the term
“designated beneficiary” as the eligible
individual who established an ABLE ac-
count and is the owner of such account.
Consistent with section 529A(e)(3), the
2015 proposed regulations provided that
the designated beneficiary of an ABLE ac-
count is the individual who is the owner
of the ABLE account and who either es-
tablished the account at a time when he or

Bulletin No. 2020–50 1559 December 7, 2020
she was an eligible individual or who has
succeeded the original designated benefi-
ciary. Because not every eligible individ-
ual may have the capacity or otherwise be
able to establish an ABLE account on his
or her own behalf, the 2015 proposed reg-
ulations provided that the ABLE account
may be established on behalf of the eligi-
ble individual by his or her agent under a
power of attorney or, if none, by a parent
or legal guardian of the eligible individ-
ual. Similarly, the 2015 proposed regula-
tions also provided that if the designated
beneficiary is unable to, or chooses not
to, exercise signature authority over his
or her account, then signature authority
may be exercised by an agent under pow-
er of attorney or, if none, a parent or legal
guardian of the designated beneficiary.
The final regulations retain these provi-
sions with modifications.
One commenter suggested that the fi-
nal regulations clarify that “parent” refers
to the parent of an adult designated ben-
eficiary, as well as the parent of a minor.
The final regulations do not adopt this
suggestion because it is not necessary. A
person’s status as a parent is not changed
by the child’s attainment of the age of ma-
jority. Rather, a person’s status as a parent
is determined by reference to a familial re-
lationship that is not age dependent.
Numerous commenters asked that the
list of persons who may exercise signa-
ture authority over the ABLE account on
behalf of the designated beneficiary (sig-
natories) be expanded to provide greater
flexibility and to avoid the need for the
court appointment of a conservator or
other legal representative, particularly in
cases in which the designated beneficiary
has no parent available to serve as signa-
tory. One commenter suggested that there
is no reason to restrict the list to those act-
ing under a power of attorney or to legal
guardians to the exclusion of custodians
and other types of fiduciaries permitted
under applicable state law. One comment-
er pointed out that an individual eligible
for an ABLE account may not have a par-
ent, guardian, or agent under a power of
attorney who can and who is willing to
manage an account. Other commenters
suggested that the list of authorized sig-
natories be expanded to include grandpar-
ents, siblings, non-family members, the
trustees of a trust for which the designat-
ed beneficiary is the trust beneficiary, the
designated beneficiary’s representative
payee as recognized by the Social Secu-
rity Administration (SSA), and custodians
or others designated by the designated
beneficiary. One commenter explained
that concerns about fraud or abuse by SSA
representative payees would be alleviated
by the Strengthening Protections for So-
cial Security Beneficiaries Act of 2018,
Public Law 115-165 (132 Stat. 1257),
which increases the funding for the Rep-
resentative Payee program and strength-
ens procedures for addressing misuse or
misappropriation of funds by SSA rep-
resentative payees. Another commenter
suggested that someone other than the el-
igible individual be permitted to establish
the account if the eligible individual has
the legal capacity to do so but chooses to
have another person establish the account.
One commenter suggested that the law of
each individual State should be permitted
to govern who can be a signatory.
Some commenters suggested that the
designated beneficiary and/or the other
person with signature authority be per-
mitted to name a successor, that the des-
ignated beneficiary be allowed to delegate
to others not only signature authority over
his or her account but also the ability to es-
tablish the ABLE account, that the desig-
nated beneficiary be able to choose more
than one person to exercise signature au-
thority over his or her ABLE account, and
that the designated beneficiary be allowed
to designate a co-signer to serve concur-
rently with the designated beneficiary.
Commenters also requested that the final
regulations confirm that a parent with
signature authority over a minor child’s
ABLE account remains eligible to serve
after the designated beneficiary reaches
the age of majority.
Some commenters requested that the
ordering rule for determining the order in
which a person has the authority to be a
signatory be removed. These comment-
ers were concerned that the ordering rule
would impose obligations on the qualified
ABLE programs to verify the absence of
any other person with higher priority who
was both willing and able to so serve.
These commenters suggested that a pro-
gram be permitted to rely on the certifi-
cation, under penalties of perjury, of an
individual seeking to exercise signature
authority over an ABLE account regard-
ing that individual’s authority to act on
behalf of the designated beneficiary.
On the other hand, one commenter
supported the provision in the 2015 pro-
posed regulations regarding permissible
signatories. Another commenter ques-
tioned whether allowing the designated
beneficiary to designate another individu-
al (who may otherwise lack independent
authority to act on behalf of the designated
beneficiary) to exercise signature authori-
ty would be consistent with the designat-
ed beneficiary’s ownership of the ABLE
account. The commenter also noted that
allowing greater flexibility in the choice
of authorized signatory could increase
program costs.
The Treasury Department and the IRS
recognize that there may be situations in
which an eligible individual with legal
capacity may want another person to es-
tablish, or to serve as the person with sig-
nature authority over, the ABLE account
for that eligible individual. Therefore, the
final regulations clarify that an eligible in-
dividual with legal capacity may delegate
these responsibilities to any other person.
Furthermore, the Treasury Department
and the IRS recognize that expanding the
categories of individuals who may serve
as signatories of an ABLE account of a
designated beneficiary who lacks legal
capacity affords less cumbersome alterna-
tives to a court-appointed guardian in the
event the designated beneficiary has no
agent under a power of attorney or parent
to exercise signature authority. However,
the Treasury Department and the IRS also
recognize that expanding too widely the
universe of individuals who are allowed
to establish an ABLE account and serve as
the signatory of that ABLE account could
increase the risk of the impermissible es-
tablishment of multiple accounts for a sin-
gle individual or of having the designated
beneficiary’s only ABLE account being
established and managed by a person who
might not be the most appropriate person
to serve in that capacity.
In an effort to find an appropriate bal-
ance between these possibly competing
concerns, the final regulations provide
an expanded hierarchy of persons who
may establish an ABLE account for an
individual or exercise signature authori-
ty over that individual’s ABLE account.

December 7, 2020 1560 Bulletin No. 2020–50
That hierarchy consists of the individual
selected by the eligible individual or the
eligible individual’s agent under a power
of attorney, conservator or legal guard-
ian or conservator, the spouse, a parent,
a sibling, a grandparent, or a represen-
tative payee (whether an individual or
organization) appointed by the SSA, in
that order. It is noted that the represen-
tative payee is subject to all applicable
SSA rules.
Because each eligible individual is al-
lowed to have only one ABLE account,
the Treasury Department and the IRS
concluded that the ordering rule is nec-
essary to provide a clearer process for
determining who may establish the des-
ignated beneficiary’s only permissible
ABLE account. For this reason, the lim-
itation and ordering rule prescribing the
persons who may establish the account
and/or serve as a signatory is retained
in the final regulations. To further facili-
tate the establishment of ABLE accounts
without imposing undue burden on the
program or the eligible individuals, the
final regulations permit a qualified ABLE
program to accept a certification by an in-
dividual, under penalties of perjury, that
he or she is authorized to establish the
ABLE account for the benefit of the eli-
gible individual and that there is no other
willing and able person with a higher pri-
ority to do so.
The final regulations also allow a des-
ignated beneficiary with legal capacity to
remove and replace from time to time the
individual with signature authority over
that designated beneficiary’s ABLE ac-
count, and to name a successor signatory.
The final regulations also allow a person
with signature authority to name a suc-
cessor signatory, consistent with the same
ordering rule, if the designated beneficiary
lacks the legal capacity to do so.
A few commenters suggested that more
than one person be allowed to serve as au-
thorized co-signatories. The Treasury De-
partment and the IRS understand that this
could provide administrative flexibility,
so the final regulations allow a qualified
ABLE program to permit co-signatories
as long as each co-signatory would satisfy
the ordering rule if the other had refused
to so serve.
As in the 2015 proposed regulations,
the final regulations provide that, be-
cause individuals with signature au-
thority over an ABLE account would
be acting on behalf of the designated
beneficiary, references to actions of the
designated beneficiary, such as estab-
lishing or managing the ABLE account,
are deemed to include the actions of
any individual with signature authority
over the ABLE account. Further, the fi-
nal regulations continue to provide that,
except for the designated beneficiary of
the ABLE account, any person with sig-
nature authority over the account may
neither have, nor acquire, a beneficial in-
terest in the account during the lifetime
of the designated beneficiary, and must
administer the account for the benefit of
the designated beneficiary.
One commenter asked that the person
with signature authority over an ABLE
account be allowed to elect to establish
an ABLE account as a custodial account
under a Uniform Transfers to Minors Act
(UTMA) or the Uniform Gifts to Minors
Act (UGMA). The Treasury Department
and the IRS decline to adopt this sug-
gestion. The ABLE Act mandates very
different rules governing ABLE accounts
than those governing UTMA and UGMA
accounts under State laws. As a result, the
Treasury Department and the IRS con-
cluded it would not be possible to admin-
ister an ABLE account as mandated by
the ABLE Act if the account instead was
structured and administered as a UTMA
or UGMA account.
One commenter suggested that the final
regulations confirm that the provisions re-
garding authorized signatories do not limit
the ability of either the designated benefi-
ciary or the person with signature author-
ity to name other agents to, for instance,
obtain information, make electronic con-
tributions and investment option changes,
authorize withdrawals, or have full joint
control. With regard to shared full joint
control, the final regulations do not adopt
the suggestion. The Treasury Department
and the IRS have concluded that this re-
sponsibility is properly the obligation of
the person(s) with signature authority over
the account and should not be delegable.
However, the final regulations do not pro-
hibit the person(s) with signature authori-
ty from having co-signatories or from al-
lowing sub-accounts, each with a different
signatory, for specific purposes.
B. Limit on number of ABLE accounts of
a designated beneficiary
Section 529A(b)(1)(B) provides that
each eligible person may have only one
ABLE account. In addition, section
529A(c)(4) generally provides that, ex-
cept with respect to rollovers, once an
ABLE account has been established for
a designated beneficiary, no account sub-
sequently established for the same desig-
nated beneficiary may qualify as an ABLE
account. Accordingly, the 2015 proposed
regulations provided that, except in the
case of rollovers or program-to-program
transfers, a designated beneficiary would
be limited to one ABLE account at a time,
regardless of where located. The final reg-
ulations confirm that an eligible individ-
ual is not prohibited from establishing an
ABLE account merely because he or she
previously was the designated beneficiary
of an ABLE account that has been closed.
Consistent with the statutory provi-
sions, the 2015 proposed regulations pro-
vided that, except with respect to rollovers
and program-to-program transfers, if an
ABLE account is established for a des-
ignated beneficiary who already has an
ABLE account in existence, the additional
account would not be treated as an ABLE
account. The 2015 proposed regulations
also provided that, if an additional account
is established and all contributions made
to the additional account are returned in
accordance with the rules applicable to
excess contributions, the additional ac-
count would be treated as never having
been established. The final regulations re-
tain these provisions with one substantive
modification.
Section 103 of the ABLE Act gener-
ally exempts ABLE accounts from being
counted as a resource in determining the
designated beneficiary’s eligibility for,
or the amount of, certain public bene-
fits. Thus, an ABLE account has both tax
and nontax benefits. Several commenters
raised concerns regarding the treatment
of additional accounts for purposes of
the designated beneficiary’s eligibility for
public benefits. Although a tax regulation
cannot govern provisions administered by
other government agencies, the final regu-
lations appropriately provide guidance on
circumstances under which accounts are
treated as ABLE accounts.

Bulletin No. 2020–50 1561 December 7, 2020
As a result of the PATH Act’s amend-
ment to section 529A eliminating the re-
quirement that the account be opened in
the State of the designated beneficiary’s
residence, the Treasury Department and
the IRS concluded that there is now an
increased risk that an additional account
could be opened under a different quali-
fied ABLE program by a person with au-
thority to establish an account without the
knowledge of either the eligible individual
or another person with authority to estab-
lish an account, thus increasing the risk
that the eligible individual thereby could
lose his or her eligibility for his or her
public benefits. The Treasury Department
and the IRS also concluded that it is with-
in the scope of their regulatory authority
to attempt to prevent this potential harm
to the class of individuals that section
529A was enacted to benefit. According-
ly, the final regulations provide that, if an
additional account is established for the
eligible individual, the additional account
also is an ABLE account if either all con-
tributions made to the additional account
are returned to the contributor(s) under
the same rules applicable to the return
of excess contributions, or the additional
account is transferred into the designated
beneficiary’s preexisting ABLE account
with any excess contributions and excess
aggregate contributions being returned to
the contributor(s). If neither of these con-
ditions is satisfied on or before the due
date (including extensions) of the eligible
individual’s Federal income tax return for
the year in which the additional account
was established, the additional account
will cease to be an ABLE account imme-
diately after that return due date.
Like the 2015 proposed regulations,
the final regulations provide that, at the
time when an individual seeks to establish
an ABLE account, the qualified ABLE
program must obtain verification from the
individual, signed under penalties of per-
jury, that the individual neither knows nor
has reason to know that the eligible indi-
vidual for whom the ABLE account is be-
ing established has an existing ABLE ac-
count, other than an account the assets of
which will be rolled over or transferred to
the new account in a program-to-program
transfer. As noted previously, an eligible
individual is not prohibited from estab-
lishing an ABLE account merely because
he or she was the designated beneficiary
of an ABLE account that has been closed.
Some commenters asked whether any
penalty would be imposed on a qualified
ABLE program that allows an individual
to establish an ABLE account on the basis
of such certification if the same eligible
individual in fact does have a preexisting
ABLE account. The Treasury Depart-
ment and the IRS note that, in such an in-
stance, no penalty would be imposed on
the qualified ABLE program as long as
the program has complied with all of the
requirements of the regulations, including
in obtaining the necessary certifications.
As noted earlier in this section, if all of
the contributions to the additional account
are returned timely, the additional account
will be treated as an ABLE account.
C. Definition of one account
Several commenters asked that the
final regulations allow for the establish-
ment of one or more sub-accounts under
a master account of a single designated
beneficiary, and that the master account
(including all of its sub-accounts) would
constitute a single ABLE account. Each
sub-account would have a different in-
dividual with signature authority and
discretion to direct the investments in
that sub-account, provided that all of the
sub-accounts are treated as one account
for Federal tax and Federal means-tested
benefit purposes. These commenters ex-
pressed concern that, if qualified ABLE
programs are not given the discretion to
allow sub-accounts, fewer individuals
would be willing to contribute to a desig-
nated beneficiary’s account because they
would not have control over the manner
in which the contributions were invested
or used for the designated beneficiary. An-
other commenter expressed concern that
allowing sub-accounts could increase pro-
gram costs.
The Treasury Department and the
IRS view the ability of a program to al-
low different individuals to establish and
have signature authority over separate
sub-accounts under one master account
as being contrary to the only-one-account
rule under section 529A. Therefore, the fi-
nal regulations do not permit the kind of
arrangement described in the preceding
paragraph.
However, the final regulations do
permit, but do not require, an ABLE
program to allow the establishment of
sub-accounts within the sole ABLE ac-
count of the designated beneficiary. Such
a sub-account could be authorized by
either the designated beneficiary or the
person with signature authority over the
ABLE account. The signatory over the
ABLE account has sole authority over
the investment of the ABLE account, but
the final regulations permit a program to
allow the creation and maintenance of
separate funds within that account, each
to be used for one or more types of ex-
penditures and from which distributions
may be authorized by a person other than
the signatory. For example, a designat-
ed beneficiary may authorize a parent to
open and administer the ABLE account,
but also may authorize the maintenance
of a particular sub-account to be used for
the purchase of the designated beneficia-
ry’s groceries and entertainment expens-
es on an ongoing basis, and from which
the designated beneficiary (or a named
sibling, for example) may make distri-
butions for that purpose. Thus, different
persons may be authorized to make dis-
tributions from different sub-accounts.
All sub-accounts are aggregated as part
of the one ABLE account for all other
purposes, including, without limitation,
the contributions limits, limit on the
number of permissible investment direc-
tion changes, tax provisions, and report-
ing requirements.
D. Eligible individual
At the time an ABLE account is estab-
lished, the designated beneficiary of the
account must provide evidence that he or
she is an “eligible individual.” Consistent
with section 529A(e)(1), the 2015 pro-
posed regulations provided that an indi-
vidual is an eligible individual for a tax-
able year if he or she is either (i) entitled
during that year to benefits based on blind-
ness or disability under title II or XVI of
the Social Security Act, provided that such
blindness or disability occurred before the
date on which the individual attained age
26, or (ii) the subject of a disability cer-
tification filed with the Secretary of the
Treasury or his delegate (Secretary) for
that year.

December 7, 2020 1562 Bulletin No. 2020–50
The final regulations, like the 2015
proposed regulations, provide that the de-
termination that an individual is an eligi-
ble individual is made each taxable year
and applies for the entire year. The final
regulations, like the 2015 proposed reg-
ulations, provide that a qualified ABLE
program must specify the documentation
that an individual must furnish, both at the
time an account is established and thereaf-
ter, to ensure that the designated beneficia-
ry of the ABLE account is, and continues
to be, an eligible individual.
A few commenters requested clarifica-
tion as to whether an ABLE account may
be established for an individual with a
mental illness. The Treasury Department
and the IRS note that the statute does not
differentiate between a mental or physical
condition, and the final regulations retain
the language from § 1.529A-2(e)(1)(i)(A)
of the 2015 proposed regulations that pro-
vides that a mental impairment can meet
the requirements for a disability certifica-
tion.
One commenter asked whether a qual-
ified ABLE program could narrow the
types of physical or mental impairments
that would satisfy the requirements to be
an eligible individual to specific disabil-
ities, such as developmental disabilities.
The Treasury Department and the IRS
concluded that the statute does not permit
a qualified ABLE program to discriminate
on the basis of the nature of the disability,
and that Congress intended that all indi-
viduals meeting the definition of an eli-
gible individual under section 529A have
access to an ABLE account, regardless
of the nature of the individual’s disabili-
ty. Therefore, a qualified ABLE program
may not narrow the definition of an eligi-
ble individual by limiting the types of dis-
abilities that can be considered.
The Treasury Department and the IRS
considered whether to retain the term “en-
titled” for purposes of the definition of an
eligible individual under section 529A(e)
(1)(A). To clarify the definition of “eligi-
ble individual” under section 529A(e)(1)
(A) and its use of the word “entitled”, the
final regulations retain the term “entitled”
as provided in the statute, interpret it to
include eligibility for SSI benefits, and
define the term “eligible individual” to in-
clude an individual who either is receiving
SSI benefits based on blindness or a dis-
ability that occurred before age 26 or is a
person whose entitlement to such benefits
has been suspended due solely to excess
income or resources.
A few commenters suggested that
establishing an individual’s eligibility
should be the obligation of the Treasury
Department or the SSA and should not be
a burden shifted to the qualified ABLE
programs. In addition, one commenter
requested that a defined term, “qualified
proxy,” be added to the regulations to clar-
ify the procedures for establishing eligibil-
ity based on the individual’s entitlement to
SSI or SSDI benefits. Such a certification
would be signed under penalties of per-
jury by the designated beneficiary or a
“qualified proxy” who would certify as to
the beneficiary’s entitlement to these ben-
efits during the applicable tax year and as
to the onset of blindness or disability prior
to age 26. The commenter also suggested
that the certification either be accompa-
nied by a copy of a letter from the SSA
confirming eligibility for such benefits
or reference the existence of such a letter
and specifying the date of that letter. The
commenter suggested allowing a qualified
ABLE program to rely on an SSA certifi-
cation for purposes of determining wheth-
er an individual is an eligible individual
based on blindness or disability under title
II or XVI of the Social Security Act. Oth-
er commenters recommended that the ap-
plicant be asked to certify the date of the
most recent SSA benefit entitlement letter
or to show some easily available proof,
which the commenters suggested could be
verified through electronic data matches
between the IRS and the SSA.
The Treasury Department and the IRS
agree that a certification-based process
regarding eligibility by reason of entitle-
ment to benefits based on blindness or dis-
ability under title II or XVI of the Social
Security Act is the simplest way to facil-
itate the establishment of ABLE accounts
without unduly burdening individuals, the
program, the IRS, or the SSA. Additional-
ly, the Treasury Department and the IRS
concluded that it would be in everyone’s
best interests to permit an eligible individ-
ual to establish an ABLE account without
experiencing the delay that would result
from having to wait for the acceptance or
approval of a certification by a govern-
ment agency. Therefore, consistent with
Notice 2015-81, the final regulations pro-
vide that a qualified ABLE program may
establish entitlement with a certification,
under penalties of perjury, by the individ-
ual establishing the ABLE account that
the designated beneficiary of that account
is eligible for benefits under title II or XVI
of the Social Security Act and that the
blindness or disability that qualifies the
designated beneficiary for those benefits
occurred before the date on which he or
she attained age 26.
The other method of satisfying the
definition of an eligible individual is by
obtaining a disability certification and fil-
ing it with the Secretary. Consistent with
section 529A(e)(2)(A), the 2015 proposed
regulations provided that a disability certi-
fication is a certification deemed sufficient
by the Secretary, signed under penalties
of perjury, that an individual has a severe
physical or mental impairment that can be
expected to result in death or that has last-
ed (or can be expected to last) for a con-
tinuous period of not less than 12 months,
or that the individual is blind, and that the
blindness or impairment occurred before
age 26, which certification is accompanied
by a copy of a physician’s diagnosis relat-
ing to the blindness or impairment. One
commenter asked that the final regulations
clarify that a disability certification that
meets the requirements of the final regu-
lations will be “deemed sufficient by the
Secretary.” The Treasury Department and
the IRS agree, and the final regulations
affirm that a certification that meets the
requirements of a disability certification
as set forth in the final regulations is suf-
ficient to establish the requisite level of
physical or mental impairment described
in § 1.529A-2(e)(2).
The final regulations, like the 2015
proposed regulations, also provide that
a disability certification is deemed to be
filed with the Secretary once the qualified
ABLE program has received the disabili-
ty certification or a disability certification
is deemed to have been received under
the rules of the qualified ABLE program,
about which receipt the qualified ABLE
program must file information with the
IRS.
As was stated in Notice 2015-81, nu-
merous commenters, including States and
potential qualified ABLE program admin-
istrators, expressed concerns about their

Bulletin No. 2020–50 1563 December 7, 2020
responsibilities and potential liabilities for
receiving and safeguarding medical infor-
mation contained in a signed diagnosis,
particularly because they do not anticipate
having the expertise or ability to evaluate
that medical information. The comment-
ers emphasized that qualified ABLE pro-
grams would incur unmanageable costs
and burdens in trying to comply with ap-
plicable laws imposing system and other
requirements on those in possession of
medical records, as well as in implement-
ing systems to receive and store paper
documentation. The commenters also ex-
pressed the concern that, if these costs and
burdens are not minimized, some States
might not proceed with the implementa-
tion of qualified ABLE programs for their
residents. The commenters recommended
that a qualified ABLE program be permit-
ted to establish an ABLE account on the
basis of a certification by the person es-
tablishing the ABLE account, signed un-
der penalties of perjury, that the individual
who is to be the designated beneficiary
of the account has a qualifying condition
and otherwise satisfies the definition of an
eligible individual, and that a diagnosis
signed by a physician regarding the rele-
vant impairment or impairments has been
obtained. To facilitate the establishment of
qualified ABLE programs by the States,
commenters requested interim guidance
addressing the issue.
After consideration of these comments,
the Treasury Department and the IRS is-
sued Notice 2015-81, stating that a certi-
fication under penalties of perjury that the
individual (or the individual’s agent under
a power of attorney or legal guardian of
the individual) has a signed physician’s di-
agnosis, and that the signed diagnosis will
be retained and provided to the qualified
ABLE program or the IRS upon request,
would be adequate under the final regula-
tions to satisfy the requirements pertaining
to the filing of a disability certification to
establish eligibility for an ABLE account.
One commenter stated that the degree
of flexibility given to each state with re-
spect to the specific documentation that
will need to be filed to establish proof
of eligibility will place an undue burden
on the process and will create confusion
within the disability community. This
commenter and others asked that the IRS
provide standard forms to document eligi-
bility. Another commenter recommended
that the final regulations establish a maxi-
mum amount of required information and
documentation to make it easier for those
attempting to establish an ABLE account
to ensure they have everything required.
Other commenters asked that qualified
ABLE program administrators be required
to collect only information concerning the
basis of eligibility and a statement that the
blindness or disability occurred before
age 26. These commenters recommended
the use of an application with “check-off”
boxes allowing the applicant to indicate
whether his or her eligibility for an ABLE
account is based on SSI eligibility, SSDI
eligibility, or the filing of a disability cer-
tification. The commenters would require
the eligible individual to maintain records
and documentation supporting the catego-
ry of eligibility indicated on the applica-
tion form, and to sign the application form
under penalties of perjury.
The Treasury Department and the IRS
understand and appreciate the benefits of a
consistent and predictable disability docu-
mentation process, while recognizing that
a qualified ABLE program should be ac-
corded the flexibility to meet its own par-
ticular needs. Therefore, consistent with
Notice 2015-81, the Treasury Department
and the IRS added a safe harbor to the fi-
nal regulations. The safe harbor provides
that a qualified ABLE program may estab-
lish that an individual is an eligible indi-
vidual if the individual (or the person with
authority to establish that individual’s ac-
count) certifies under penalties of perjury:
(i) the basis for the individual’s status as an
eligible individual under § 1.529A-1(b)(8)
(entitlement for benefits based on blind-
ness or disability under title II or XVI of
the Social Security Act, or a disability cer-
tification); (ii) that the individual is blind
or has a medically determinable physical
or mental impairment as described in the
final regulations; (iii) that such blindness
or disability occurred before the date on
which the individual attained age 26 (and,
for this purpose, an individual is deemed
to attain age 26 on his or her 26th birth-
day); (iv) if the basis of the individual’s
eligibility is a disability certification, that
the individual has obtained and will retain
a copy of the written diagnosis relating to
the disability, accompanied by the name
and address of the diagnosing physician
and the date of the written diagnosis; (v)
that the individual has provided the appli-
cable diagnostic code from those listed on
Form 5498-QA that applies with respect
to the designated beneficiary’s disabili-
ty; (vi) that the person establishing the
account is the individual who will be the
designated beneficiary of the account or is
the person authorized under § 1.529A-2(c)
(1)(i) to establish the account; and (vi) if
required by the qualified ABLE program,
that the individual has provided the infor-
mation from a physician as to the catego-
rization of the disability that may be used
to determine, under the particular State’s
program, the appropriate frequency of re-
quired recertifications.
A few commenters, observing that
persons with developmental disabilities
are often diagnosed by licensed psychol-
ogists, clinical therapists, or certified
vocational rehabilitation counselors, re-
quested that the final regulations autho-
rize such professionals to sign the indi-
vidual’s diagnosis. While the Treasury
Department and the IRS understand the
commenters’ concerns, the final regula-
tions do not incorporate these sugges-
tions. Section 529A(e)(2)(A)(ii) requires
the individual’s diagnosis to be signed
by a physician meeting the criteria of
section 1861(r)(1) of the Social Security
Act, which means a doctor of medicine or
osteopathy, a doctor of dental surgery or
dental medicine, and, for some purposes,
a doctor of podiatric medicine, a doctor
of optometry, or a chiropractor.
In the case of a program-to-program
transfer, several commenters requested
that the final regulations allow the recip-
ient qualified ABLE program to assume at
the time of the transfer (in reliance on the
obligations of the transferor program) that
the designated beneficiary of the recipient
ABLE account is an eligible individual.
The final regulations do not incorporate
this suggestion because the Treasury De-
partment and the IRS concluded that the
obligation of a qualified ABLE program to
establish an account only for an eligible
individual is not delegable. Thus, the same
requirements for establishing an ABLE
account apply, regardless of whether the
account is funded initially with a pro-
gram-to-program transfer or otherwise,
including permitting a qualified ABLE
program to allow the designated benefi-

December 7, 2020 1564 Bulletin No. 2020–50
ciary to certify that he or she is an eligible
individual.
E. Disability standard
As directed in the ABLE Act, the Trea-
sury Department and the IRS consulted
with the Commissioner of Social Security
in developing the medical standards relat-
ing to disability certifications and determi-
nations of disability. The final regulations,
like the 2015 proposed regulations, pro-
vide that a person signing (under penalties
of perjury) a disability certification with
respect to an individual is certifying that
such individual has a medically determin-
able physical or mental impairment that
results in marked and severe functional
limitations and that can be expected to re-
sult in death or has lasted or can be expect-
ed to last for a continuous period of not
less than 12 months, or is blind. The dis-
ability certification also is a certification
that such blindness or disability occurred
before the date on which the individual at-
tained age 26.
Consistent with section 529A(e)(2)(A),
the 2015 proposed regulations defined the
phrase “marked and severe functional
limitations” as the standard of disabili-
ty in the Social Security Act for children
claiming benefits under the SSI program
based on disability, but without regard to
the age of the individual. Citing 20 CFR
416.906, the 2015 proposed regulations
clarified that this definition refers to a lev-
el of severity of an impairment that meets,
medically equals, or functionally equals
the listings in the Listing of Impairments
in appendix 1 of subpart P of 20 CFR part
404. An impairment is medically equiv-
alent to a listing if it is at least equal in
severity and duration to the severity and
duration of any listing. An impairment
that does not meet or medically equal
any listing may result in limitations that
functionally equal the listings if it results
in marked limitations in two domains of
functioning or an extreme limitation in
one domain of functioning, as explained
in 20 CFR 416.926a. Several commenters
commended the proposed regulation’s use
of this disability standard, saying that it
achieves the intended statutory result.
One commenter questioned wheth-
er physicians would accurately interpret
and apply the standard, and asked wheth-
er training for physicians would be pro-
vided. The Treasury Department and the
IRS note that, while the physician is to
provide the diagnosis, it is the designated
beneficiary or other person establishing
the ABLE account who is responsible for
certifying satisfaction of the standard of
medical disability, so no special training
of physicians by the SSA, the Treasury
Department, or the IRS is contemplated.
A few commenters noted that the defi-
nition of “marked and severe function-
al limitations” under 20 CFR 416.906
includes the statement that “if you file a
new application for benefits and you are
engaging in substantial gainful activity,
we will not consider you disabled.” These
commenters questioned whether that
statement suggests that a person is dis-
qualified from having an ABLE account if
he or she is gainfully employed. The Trea-
sury Department and the IRS agree that
the citation to the SSI regulation, with-
out any further clarification, may lead to
confusion. Therefore, the final regulations
adopt the proposed regulation’s definition
of “marked and severe functional limita-
tions,” but also provide that the standard
of disability under section 529A is applied
without regard to either the individual’s
age or whether the individual is engaged
in substantial gainful activity.
Some commenters requested that the
final regulations provide that a person
who does not meet the definition of an
eligible individual before attaining age
26, but who subsequently will develop
blindness or a disability of sufficient se-
verity to satisfy that definition as a result
of either a genetic disorder present at birth
or a condition that is diagnosed before at-
taining age 26 may qualify as an eligible
individual. One commenter asserted that
such an individual should be allowed to
prepare for a known future disability by
establishing an ABLE account. The Trea-
sury Department and the IRS also have
considered whether such an individual
should be able to qualify as an eligible
individual once the disorder or condition
causes blindness or a disability of suffi-
cient severity. While sympathetic to this
request, the Treasury Department and the
IRS concluded that the statutory require-
ment that the blindness or disability have
“occurred” before age 26 is not consistent
with the broader interpretations requested
or considered. There is no indication in the
statute or legislative history of the ABLE
Act that Congress intended to permit what
could be a significant expansion of the
definition of an eligible individual by in-
cluding a person who may never develop
the disability or whose condition is cured
or significantly alleviated by subsequent
medical discoveries. Accordingly, the fi-
nal regulations do not incorporate this
suggested change.
The 2015 proposed regulations provid-
ed that a condition listed in the “List of
Compassionate Allowances Conditions”
maintained by the SSA (currently at www.
socialsecurity.gov/compassionateallow-
ances/conditions.htm) would be deemed
to meet the requirements of a condition
sufficient for a disability certification
without a physician’s diagnosis if the
condition was present before the date on
which the individual attained age 26. In
the preamble to the 2015 proposed regu-
lations, the Treasury Department and the
IRS requested comments on other condi-
tions that might also be deemed sufficient
for a disability certification without the
need of a physician’s diagnosis.
Some commenters proposed that a
few additional specific conditions should
be treated similarly as qualifying dis-
abilities. One commenter suggested that
three additional types of spinal muscular
atrophy, a permanent disability that can
occur after age 26, should so qualify, in
addition to the two types already on the
List of Compassionate Allowances Condi-
tions. Another commenter suggested that
polymicrogyria qualifies under certain
conditions, while yet another commenter
pointed out that autism is typically a life-
long condition. One commenter suggested
that the regulations incorporate what was
described as the “non-exhaustive list of
impairments presumed to be disabilities
under the updated EEOC Title I regula-
tions of the Americans with Disabilities
Act (76 FR 16978).” While sympathetic
to the suggestions of these commenters,
the Treasury Department and the IRS are
not qualified to make the kind of decisions
that are made by the SSA when compil-
ing the List of Compassionate Allowances
Conditions. For that reason, the final reg-
ulations adopt the provision in the 2015
proposed regulations without change. The
Treasury Department and the IRS note

Bulletin No. 2020–50 1565 December 7, 2020
that the SSA periodically updates the List
of Compassionate Allowances Condi-
tions, so these commenters may want to
consider approaching the SSA with their
requests. The Office of Disability Policy
maintains a website and e-mail box for
soliciting and evaluating compassionate
allowance condition submissions from the
public at https://www.ssa.gov/compas-
sionateallowances/submit_potential_cal.
html.
F. Recertification
The 2015 proposed regulations provid-
ed that a qualified ABLE program could
choose different methods of ensuring a
designated beneficiary’s status as an eligi-
ble individual. That might include, for ex-
ample, imposing different periodic recer-
tification requirements for different types
of impairments, taking into consideration
whether an impairment is incurable and
the likelihood that a cure may be found.
The 2015 proposed regulations explained
that, while a qualified ABLE program
generally must require an annual recer-
tification that the designated beneficiary
continues to satisfy the definition of an
eligible individual, it may deem an annu-
al recertification to have been provided in
appropriate circumstances. For example,
a qualified ABLE program could deem
a one-time certification by an individual
that he or she has a permanent disability as
meeting the annual recertification require-
ment in subsequent years. In other cases, a
program could require the same evidence
that is required of an initial disability cer-
tification, or could incorporate some other
method of ensuring that the designated
beneficiary continuously qualifies as an
eligible individual.
While most commenters supported
the flexibility accorded qualified ABLE
programs to impose different periodic
recertification requirements for different
types of impairments, several comment-
ers recommended that there be as much
uniformity among qualified ABLE pro-
grams as possible. Some of these com-
menters asked that the final regulations
identify those illnesses or disabilities for
which there is no known cure and then
excuse them from any recertification re-
quirement. Many of these commenters
requested that the form used to establish
the ABLE account contain a box for the
diagnosing physician to check if the dis-
ability is unlikely to change within five
years, and require recertification only ev-
ery five years thereafter. Other comment-
ers suggested that there be a uniform
certification form with which a physician
could certify that an individual’s impair-
ment is unlikely to improve, in which
case the certification would be effective
for a certain number of years (for exam-
ple, 5 years or longer), after which time
a new certification form could be filed
for an additional number of years. Some
commenters suggested that the certifica-
tion of a “permanent,” “incurable,” or
“severe and sustained” disability should
be effective for a longer period of time
than the certification of a “moderate” or
“curable” disability, or that the disabili-
ty be classified as “severe”, “moderate”,
or “mild” with a different recertification
frequency for each, and that those classi-
fications would be certified when the ac-
count is established. Some commenters
suggested that there be a presumption of
continued eligibility until the designated
beneficiary notifies the qualified ABLE
program of his or her ineligibility. Other
commenters suggested that recertifica-
tion be waived as long as the designated
beneficiary’s SSDI or SSI benefits quali-
fy him or her for an ABLE account, while
still other commenters requested that the
annual recertification requirement be
waived for anyone with an incurable ill-
ness or disability. One commenter sug-
gested that the IRS partner with the SSA
to maintain lists of recertification criteria.
Other commenters pointed out that recer-
tification may be too burdensome.
The final regulations retain the rule set
forth in the 2015 proposed regulations
that a determination of eligibility must be
made annually unless the qualified ABLE
program adopts a different method of en-
suring a designated beneficiary’s continu-
ing status as an eligible individual. This
gives each qualified ABLE program broad
discretion to devise its own recertification
methods. This provision is broad enough
to permit many of the approaches sug-
gested by commenters, other than the sug-
gestions regarding the elimination of the
recertification requirement entirely. The
final regulations specify that a permissible
method may include a certification by the
designated beneficiary under penalties of
perjury.
The final regulations, like the 2015 pro-
posed regulations, also provide that even
if a qualified ABLE program imposes an
enforceable obligation on the designated
beneficiary or other person with signature
authority over the ABLE account to report
promptly any changes in the designated
beneficiary’s condition that would dis-
qualify the designated beneficiary as an
eligible individual, the qualified ABLE
program may provide that a certification
is valid until the end of the taxable year in
which the change in the designated benefi-
ciary’s condition occurred. One comment-
er asked for clarification that a qualified
ABLE program that adopts this approach
will not be deemed to be noncompliant
with the annual recertification require-
ment for any year in which the designated
beneficiary is no longer an eligible indi-
vidual but fails to report a change in sta-
tus to the program. The final regulations
confirm that a qualified ABLE program
that is compliant with the rules regarding
recertification will not cease to be a quali-
fied ABLE program if the designated ben-
eficiary fails to report a change in status.
G. Change in eligible individual status
The Treasury Department and the IRS
recognize that there will be instances
when an individual’s impairment abates
to the point that the individual no longer
qualifies as an eligible individual, either
temporarily or permanently. The 2015
proposed regulations provided that an
existing ABLE account will remain the
ABLE account of the designated benefi-
ciary even during years in which the des-
ignated beneficiary does not qualify as an
eligible individual. However, the 2015
proposed regulations also provided that,
beginning with the year immediately fol-
lowing the year in which that qualification
ceases, no additional contributions may be
made into that ABLE account. The final
regulations preserve these rules. Howev-
er, the 2015 proposed regulations provid-
ed that, beginning with that same year,
no amounts incurred would constitute a
qualified disability expense, regardless of
the nature of that expense. As explained
in the following paragraphs, the final reg-
ulations continue to provide that, in this

December 7, 2020 1566 Bulletin No. 2020–50
event, no expense will constitute a quali-
fied disability expense, but further provide
that this rule applies at all times when the
designated beneficiary does not qualify as
an eligible individual, including during
the portion of the year remaining after that
eligibility has been lost.
One commenter asked whether the
ABLE account could be used to pay for
medical treatments that may be necessary
to sustain the designated beneficiary’s
improved condition. Another comment-
er asked whether distributions from the
ABLE account to pay for medically nec-
essary procedures of a designated benefi-
ciary who is not an eligible individual are
subject to tax. One commenter suggested
that an ABLE account should be closed if
the designated beneficiary of the account
no longer has the qualifying blindness or
disability, and that the designated bene-
ficiary then should be subjected to long
term capital gains tax on the income por-
tion of any remaining funds in that ABLE
account, possibly payable over more than
a single year.
A condition in remission subsequently
can become active, so it is possible that
the designated beneficiary could again sat-
isfy the definition of an eligible individual
in the future. In addition, even though a
designated beneficiary may fail to quali-
fy as an eligible individual for purposes
of section 529A, that person still may be
relying on public benefits that could be
lost if the ABLE account were to lose its
special exclusion under section 103 of the
ABLE Act. For these reasons, the Trea-
sury Department and the IRS concluded
that it is appropriate to preserve the ABLE
account for the benefit of the designat-
ed beneficiary, even after the designated
beneficiary fails to qualify as an eligible
individual, in case he or she once again
becomes an eligible individual. Therefore,
like the 2015 proposed regulations, the fi-
nal regulations provide that, for any year
during which a designated beneficiary no
longer satisfies the definition of an eligi-
ble individual, his or her ABLE account
remains an ABLE account, to which all
of the non-tax provisions of the ABLE
Act continue to apply, and to which all
of the tax provisions continue to apply
except as otherwise provided with regard
to contributions and the tax treatment of
distributions. The ABLE account does not
have to terminate, and there is no deemed
distribution of the account balance for tax
purposes. Beginning on the first day of the
designated beneficiary’s first taxable year
following the year in which the designat-
ed beneficiary no longer satisfies the defi-
nition of an eligible individual, no con-
tributions to the ABLE account may be
accepted by the qualified ABLE program.
In addition, expenses will not be qualified
disability expenses if they are incurred at
a time when a designated beneficiary is
neither an individual with a disability nor
blind within the meaning of § 1.529A-1(b)
(8)(i) or § 1.529A-2(e)(1)(i), even if the
individual remains an eligible individual
through the end of the year in which the
individual ceases to be disabled or blind.
Therefore, although distributions still may
be made from an ABLE account to pay the
expenses of the designated beneficiary in-
curred during periods when the designated
beneficiary is no longer blind or disabled,
none of those expenses are qualified dis-
ability expenses and thus the earnings in-
cluded in those distributions are includi-
ble in the gross income of the designated
beneficiary. If the designated beneficiary
subsequently requalifies as an eligible in-
dividual, contributions to the designated
beneficiary’s ABLE account again will be
allowed, subject to the annual contribution
limit under section 529A(b)(2)(B) and the
aggregate contribution limit under section
529A(b)(6), and expenses again may con-
stitute qualified disability expenses.
3. Contributions to an ABLE Account
A. Source and nature
Like the 2015 proposed regulations,
the final regulations provide that any per-
son may make contributions to an ABLE
account, subject to annual and aggregate
contribution limits. One commenter sug-
gested that the final regulations explicitly
define the word “person” with reference
to the definition of “person” under sec-
tion 7701. Another commenter requested
clarification that contributors to an ABLE
account may include charitable organi-
zations described in section 501(c)(3) of
the Code, as well as special needs trusts
as described in 42 U.S.C. 1396p(d)(4) that
can be excluded from a person’s assets for
purposes of eligibility for certain Medic-
aid benefits. The Treasury Department and
the IRS note that the definition of “person”
in section 7701 applies throughout the
Code unless explicitly provided otherwise
or where manifestly incompatible with
the statutory intent and is thus applicable
in this context. The Treasury Department
and the IRS also note that a “person” un-
der section 7701 includes both trusts and
tax-exempt organizations. Accordingly, an
express statement in the regulatory text is
not necessary to achieve the commenter’s
purpose. Therefore, the final regulations
do not adopt these comments.
Like the 2015 proposed regulations,
the final regulations provide that all con-
tributions to an ABLE account must be
made in cash, and that a qualified ABLE
program may accept contributions in the
form of cash, check, money order, cred-
it card payment, electronic transfer, or
other similar method of payment. Many
commenters urged that the final regula-
tions continue to allow a qualified ABLE
program to accept contributions by credit
card, and the final regulations do so. One
commenter asked that the final regulations
clarify that a qualified ABLE program
may accept payroll deductions. The final
regulations accordingly clarify that cash
contributions may be made as after-tax
payroll deductions.
One commenter asked that the final
regulations clarify that a qualified ABLE
program may accept contributions direct-
ly from a corporation, and that employers
may contribute to the ABLE accounts of
their employees through matching con-
tribution programs. The Treasury De-
partment and the IRS note that the final
regulations provide that a qualified ABLE
program may accept contributions in the
form of after-tax payroll deductions and
do not prohibit other forms of contribu-
tions from a corporation or employer.
However, it is important to remember
that contributions made by an employer
to the ABLE account of its employee or
of a family member of the employee are
subject to the rules governing the taxation
of compensation. The final regulations
also clarify that the rules concerning the
tax treatment of contributions to an ABLE
account apply only for purposes of sec-
tion 529A. No inference is intended with
respect to the tax treatment of amounts
contributed to ABLE accounts for other

Bulletin No. 2020–50 1567 December 7, 2020
purposes of the Code, such as the tax treat-
ment of compensation.
Several commenters requested that
certain contributions be allowed without
regard to other applicable tax provisions.
For example, one commenter suggested
that a parent be allowed to withdraw as-
sets from his or her IRA and contribute the
assets to his or her child’s ABLE account
free of income tax on the IRA withdrawal.
Although there is no limit on the permis-
sible sources of contributions to an ABLE
account, the regulatory authority of the
Treasury Department and the IRS does not
extend to negating the tax consequences
that otherwise are applicable to amounts
used to make contributions.
B. Annual and aggregate contribution
limits
Consistent with section 529A(b)(2)
(B), the 2015 proposed regulations pro-
vided that the total amount of contri-
butions to an ABLE account during the
designated beneficiary’s taxable year
(excluding rollovers and program-to-pro-
gram transfers) could not exceed the
section 2503(b) gift tax annual exclu-
sion amount ($14,000 in 2015, 2016,
and 2017 and $15,000 in 2018, 2019,
and 2020) (annual contribution limit).
Although section 529A was effective for
taxable year 2015, no qualified ABLE
programs were operational in 2015.
Several commenters asked that the final
regulations allow a “make-up” contri-
bution for 2015 to be made in 2016, so
that, for 2016 only, the total amount that
may be contributed to an ABLE account
is $28,000. Setting the 2016 contribution
limit at $28,000, these commenters said,
would effectuate Congressional intent
to enable eligible individuals to benefit
from ABLE accounts beginning in 2015.
The final regulations do not incorporate
this suggestion as the statute is explicit
with regard to the annual contribution lim-
it and does not permit a carryover. Section
529A(b)(2) states that, except in the case
of a rollover, a qualified ABLE program
may not accept a contribution to an ABLE
account that would result in aggregate
contributions from all contributors to the
account for the taxable year exceeding the
Federal gift tax exclusion amount in effect
under section 2503(b) for that year.
One commenter asked that the final
regulations expressly state that a change
in the designated beneficiary of an ABLE
account to a member of the family of the
designated beneficiary effectuated without
a rollover or program-to-program transfer
is not a contribution subject to the annual
contribution limit. The final regulations
adopt this suggestion. The Treasury De-
partment and the IRS view such a change
of the designated beneficiary as the equiv-
alent of a rollover or program-to-program
transfer. Therefore, the annual contribu-
tion limit does not apply as long as the
successor designated beneficiary is both
an eligible individual and a sibling, step-
sibling, or half-sibling of the designated
beneficiary (collectively referred to as sib-
lings).
Section 529A(b)(2) provides that, for
purposes of applying the annual contribu-
tion limit imposed by that section, rules
similar to the rules of section 408(d)(4),
determined without regard to subpara-
graph (B) thereof, apply. Section 408(d)
(4) generally provides that a distribution
from an IRA is not taxable if it is the re-
turn of a contribution made during the tax-
able year, provided that the return of the
contribution is received by the IRA owner
on or before the due date (including ex-
tensions) of his or her income tax return
for that year, and if the amount returned
includes the earnings on the amount of
the contribution. However, the earnings
portion of the distribution is includible in
the recipient’s gross income for the year in
which the contribution was made.
One commenter suggested that the
reference to section 408(d)(4) should be
construed to calculate both the annual
contribution limit and the aggregate con-
tribution limit by not counting toward ei-
ther limit the amount of each contribution
withdrawn during that same year for qual-
ified disability expenses. Under this view,
total permissible contributions during any
year would equal the sum of the annual
contribution limit (currently $15,000) and
the total withdrawals during that year for
qualified disability expenses, thus giv-
ing the designated beneficiary the ability
to save amounts in the ABLE account in
excess of what is needed for current ex-
penses.
The final regulations do not incorpo-
rate this suggestion. The Treasury Depart-
ment and the IRS concluded that the mere
reference in section 529A(b)(2) to section
408(d)(4) cannot be read to increase the
permissible annual contributions by the
amounts distributed out of the ABLE ac-
count in the same year. The reference to
section 408(d)(4) provides a mechanism
for correcting the receipt of a contribu-
tion in excess of the annual contribution
limit. Under section 4973(h)(2), an excess
annual contribution timely returned in
accordance with the reference to section
408(d)(4) in section 529A(b)(2) is treated
as an amount not contributed, and there-
fore avoids the imposition of a six percent
excise tax under section 4973 on excess
annual contributions that are not timely
returned.
One commenter suggested that the fi-
nal regulations should allow an individu-
al’s benefits under the SSI program to be
directly deposited or otherwise transferred
to the ABLE account of which the individ-
ual is the designated beneficiary, without
being counted against the annual contribu-
tion limit. Another commenter suggested
that, in applying the annual contribution
limit, the final regulations should disre-
gard the amount of certain other items de-
posited into an ABLE account, such as the
payment of retroactive SSDI benefits, the
proceeds from a personal injury lawsuit,
or a family inheritance. Noting that large
sums of money received as a result of a
lawsuit settlement or inheritance are often
placed in special needs trusts, the com-
menter also recommended that the final
regulations permit transfers from a special
needs trust to an ABLE account. Another
commenter asked that the final regulations
not treat any earned income of the des-
ignated beneficiary that is deposited into
his or her ABLE account as a contribution
subject to the annual contribution limit
because such a transfer is not treated as a
completed gift for Federal tax purposes.
The final regulations do not incorpo-
rate these suggestions. The statute does
not differentiate between contributions
based on their nature or source. The Trea-
sury Department and the IRS concluded
that the statute is properly interpreted to
include all amounts contributed to an
ABLE account for the benefit of the des-
ignated beneficiary (other than a rollover,
program-to-program transfer, or pursuant
to a change of designated beneficiary) as

December 7, 2020 1568 Bulletin No. 2020–50
a contribution subject to the annual limit,
regardless of the source of the funds con-
tributed. The Treasury Department and the
IRS note that section 529A does not pre-
vent a transfer from a special needs trust
to an ABLE account subject to the annual
and aggregate contribution limits of sec-
tions 529A(b)(2)(B) and 529A(b)(6).
The 2015 proposed regulations provid-
ed that a qualified ABLE program is re-
quired to provide adequate safeguards to
prevent aggregate contributions on behalf
of a designated beneficiary in excess of
the limit established by the State on con-
tributions to its qualified tuition program
under section 529(b)(6) (aggregate con-
tribution limit). The 2015 proposed reg-
ulations included a safe harbor providing
that a qualified ABLE program satisfies
the aggregate contribution limit require-
ment if it refuses to accept any additional
contribution to an ABLE account once the
balance in the account reaches that limit.
Once the account balance falls below the
aggregate contribution limit, additional
contributions again may be accepted up to
the aggregate contribution limit. The Trea-
sury Department and the IRS concluded
that this safe harbor and the permissible
recommencement of contributions is ap-
propriate based on the nature and purpos-
es of a qualified ABLE program.
Most commenters were supportive of
the proposed safe harbor, which is the
same safe harbor in the proposed regula-
tions addressing the cumulative limit on
qualified tuition accounts under section
529. Some commenters also noted that
the safe harbor would be consistent with
the way most States administer their 529
programs, which would lower administra-
tive costs. One commenter observed that
the safe harbor avoids the disparities in-
herent in focusing solely on contributions,
which penalizes savers experiencing fi-
nancial market downturns while favoring
those experiencing financial gains. Some
commenters requested clarification that
the safe harbor could be applied each time
the account balance reaches the applicable
limit, and is not limited to just one appli-
cation. The final regulations, like the 2015
proposed regulations, provide that, once
the account balance falls below the ag-
gregate contribution limit, additional con-
tributions again may be accepted, again
subject to the aggregate contribution limit.
One commenter, however, expressed
concerns that the proposed safe harbor,
by substituting the account balance for
the aggregate contribution limit, renders
an ABLE account less attractive as a sav-
ings vehicle for the designated beneficia-
ry. The commenter noted that earnings on
contributions to the account may cause
the account balance to reach the aggregate
contribution limit long before aggregate
contributions to the account rise to that
limit. Therefore, the commenter recom-
mended replacing the safe harbor in the
2015 proposed regulations with a six-
month grace period during which a qual-
ified ABLE program could identify and
disgorge excess aggregate contributions.
The Treasury Department and the IRS
are also concerned, however, with the
opposite situation in which total contri-
butions have reached the aggregate con-
tribution limit but distributions and/or de-
creases in market value have reduced the
account balance to below the aggregate
contribution limit. In that case, without
the safe harbor, all further contributions
would be prohibited. Accordingly, the
Treasury Department and the IRS con-
tinue to view the proposed safe harbor as
potentially more favorable to the designat-
ed beneficiary than an approach focused
on cumulative contributions. In addition,
some commenters predicted that the safe
harbor would reduce the administrative
costs of qualified ABLE programs. There-
fore, the final regulations retain the safe
harbor provision but clarify that the safe
harbor may be applied an unlimited num-
ber of times and that, once contributions
recommence, they are subject to both the
annual and aggregate contribution lim-
its. The final regulations also change a
cross-reference that caused some confu-
sion among commenters.
The aggregate contribution limit is
likely to be different for each qualified
ABLE program because that limit is de-
termined by the limit established by each
particular State for contributions to its
qualified tuition program under section
529(b)(6). One commenter asked that the
final regulations permit rollovers and pro-
gram-to-program transfers of amounts in
excess of the transferee ABLE program’s
aggregate contribution limit if such
amount does not exceed the aggregate
contribution limit of the transferor ABLE
program, or, if it does, that it exceeds that
limit solely because of investment growth.
The commenter suggested that the trans-
feree ABLE program would reject ad-
ditional contributions until the account
balance falls below the aggregate contri-
bution limit set by the transferee ABLE
program. The final regulations adopt this
suggestion and exclude rollovers, pro-
gram-to-program transfers, and changes
to a new designated beneficiary who is an
eligible individual and a sibling of the for-
mer designated beneficiary for purposes of
the aggregate contribution limit, provided
that subsequent contributions are prohibit-
ed either under the general rule or the safe
harbor. The Treasury Department and the
IRS view this exclusion as consistent with
the account balance safe harbor.
C. Additional contribution limit and
applicable poverty line
Consistent with the TCJA amend-
ment to section 529A(b)(2)(B), the 2019
proposed regulations provided that an
employed or self-employed designated
beneficiary described in section 529A(b)
(7) may contribute to his or her ABLE ac-
count the lesser of the designated benefi-
ciary’s compensation for the taxable year
or an amount equal to the poverty line for
a one-person household for the calendar
year preceding the calendar year in which
the designated beneficiary’s taxable year
begins.
Section 529A(b)(7)(B) provides that
the term poverty line referred to in section
529A(b)(2)(B)(ii) has the same meaning
given to that term by section 673 of the
Community Services Block Grant Act (42
U.S.C. 9902). Consistent with the 2019
proposed regulations, the final regulations
provide that the poverty line in section
529A(b)(7)(B) is to be determined by
using the poverty guidelines updated pe-
riodically in the Federal Register by the
U.S. Department of Health and Human
Services under the authority of 42 U.S.C.
9902(2). Those guidelines vary based on
locality. Specifically, there are three sep-
arate guidelines: (1) the contiguous 48
states and the District of Columbia, (2)
Alaska, and (3) Hawaii. The 2019 pro-
posed regulations provided that a desig-
nated beneficiary’s contribution limit is to
be determined using the poverty guideline

Bulletin No. 2020–50 1569 December 7, 2020
applicable in the state of the designated
beneficiary’s residence.
One commenter suggested that the final
regulations should provide that the pov-
erty line on which the designated benefi-
ciary’s contribution limit is based should
be uniform throughout the United States
to avoid both confusion and an incentive
for a move to a state with a higher poverty
line. The Treasury Department and the IRS
have concluded that the poverty guideline
that most closely reflects the employed
designated beneficiary’s cost of living is
the most relevant for determining the con-
tribution limit, and that a move to a state
with a higher poverty line generally also
would subject the designated beneficiary
to a higher cost of living, thus effectively
negating any incentive to move. There-
fore, consistent with the 2019 proposed
regulations, the final regulations provide
that a designated beneficiary’s contribu-
tion limit is determined using the poverty
guideline applicable in the state of the des-
ignated beneficiary’s residence, and that
an employed or self-employed designated
beneficiary described in section 529A(b)
(7) may contribute to his or her ABLE ac-
count the lesser of the designated benefi-
ciary’s compensation for the taxable year
or an amount equal to the poverty line for
a one-person household for the calendar
year preceding the calendar year in which
the designated beneficiary’s taxable year
begins.
One commenter suggested that desig-
nated beneficiaries generally will not easi-
ly be able to determine the annual applica-
ble poverty line and requested that the IRS
require ABLE programs to provide notice
to designated beneficiaries each year of
the poverty line for each of the geographic
areas applicable for that year. Two com-
menters also expressed concern about the
statutory provision that makes the desig-
nated beneficiary responsible for ensuring
that these contributions of compensation
income do not exceed the applicable limit,
and pointed out that an uncorrected excess
contribution would be likely to jeopardize
the designated beneficiary’s qualification
for public benefits on which the desig-
nated beneficiary relies. They suggested
that supplemental information is needed
to assist the designated beneficiaries and
their advisors, and recommended that
ABLE programs be required not only to
provide annual updates on the applicable
poverty limits, but also general informa-
tion about the compensation contribution
limit, as well as notice to each designated
beneficiary when compensation contribu-
tions are approaching and/or have exceed-
ed the applicable level, and when other
contributions have reached the annual and
cumulative limits. Finally, a commenter
suggested that ABLE programs should al-
low ABLE beneficiaries to opt out of the
compensation contribution limit to assist
those designated beneficiaries who do not
want to incur any risk of exceeding the ap-
plicable limit.
The final regulations do not incorpo-
rate these suggestions. The Treasury De-
partment and the IRS note that the statute
does not require qualified ABLE programs
to provide any of the notices suggested by
the commenter and, in fact, requires the
designated beneficiary to be solely respon-
sible for monitoring the increased limit.
Furthermore, the Treasury Department
and the IRS are concerned that requiring
qualified ABLE programs to provide these
notices would be unduly burdensome and
would increase costs to the programs. Al-
though the final regulations do not impose
such notification requirements on qual-
ified ABLE programs, the Treasury De-
partment and the IRS acknowledge that it
may be helpful and a real service to desig-
nated beneficiaries if the ABLE programs
would make this information available to
designated beneficiaries, whether by in-
formation posted online or otherwise, and
suggest that ABLE programs are free to
provide such a service if they wish. Final-
ly, the Treasury Department and the IRS
note that, because making the additional
contribution of the designated beneficia-
ry’s compensation income is voluntary,
there is no need to opt out of the ability to
make such a contribution.
Another commenter requested that the
final regulations provide that an amount
not in excess of the new compensation
contribution limit may be contributed by
a person other than the designated bene-
ficiary. The commenter pointed out that
many employed designated beneficiaries
have to use their earned income to pay
their living expenses, thus leaving little
for saving in the ABLE account, and that,
without such a provision, another person’s
gift to match the designated beneficiary’s
earned income would have to be made
through the designated beneficiary’s ac-
count, which could adversely impact qual-
ification for public benefits. The Treasury
Department and the IRS understand the
potential problem but believe that such a
provision would be contrary to the explicit
language of the statute, requiring that such
contributions be made by the designated
beneficiary. Further, the legislative histo-
ry of the TCJA, like the statute, explicit-
ly states that additional amount must be
contributed by the designated beneficiary.
See H.R. Rep. No. 115-466, at 329 (2017)
(Conf. Rep.). Therefore, the final regula-
tions do not incorporate this suggestion.
The commenter also requested confir-
mation that a direct deposit of the desig-
nated beneficiary’s compensation income
to his or her ABLE account is a contribu-
tion “by” the designated beneficiary, as
well as confirmation that contributions
subject to the new compensation contri-
bution limit do not have to be made from
the designated beneficiary’s compensation
income. The Treasury Department and the
IRS agree. Money is fungible. In addi-
tion, the statute does not require that the
contributions come from the designated
beneficiary’s earned income; rather, the
designated beneficiary’s earned income is
one measure used to determine the addi-
tional contribution limit applicable to an
employed designated beneficiary’s own
contributions. The final regulations clarify
these two points.
One commenter asked whether a des-
ignated beneficiary’s compensation con-
tributions count towards the compensation
contribution limit even if the annual con-
tribution limit has not been reached. If the
new limit on compensation contributions
has been reached, the designated benefi-
ciary may continue to make additional
contributions until the annual or cumula-
tive contribution limits have been reached.
The Treasury Department and the IRS be-
lieve each qualified ABLE program has
the flexibility to determine how to identify
contributions from the designated benefi-
ciary that are compensation contributions
subject to the new contribution limit.
Finally, one commenter requested clar-
ification that, although contributions to
and distributions from an ABLE account
generally are not taken into account in
determining the designated beneficiary’s

December 7, 2020 1570 Bulletin No. 2020–50
qualification for certain public benefits,
the earned income of a designated ben-
eficiary that is deposited into his or her
ABLE account nevertheless is earned
income and, as such, may be counted in
calculating “substantial gainful activity”
of the designated beneficiary which, re-
gardless of its deposit into an ABLE ac-
count, may have an impact for purposes of
determining the designated beneficiary’s
qualification for those benefits. This is not
a tax issue and thus is beyond the scope of
these regulations.
D. Application of gift tax and GST to
contributions to an ABLE account
Contributions to an ABLE account are
completed gifts to the designated ben-
eficiary of that ABLE account. Gift tax
consequences may arise from a contribu-
tion to an ABLE account even though the
aggregate amount of contributions to that
ABLE account from all contributors must
not exceed the annual exclusion amount
under section 2503(b) applicable to any
single contributor. For example, if a con-
tributor makes gifts to an individual in ad-
dition to that contributor’s contributions
to the same individual’s ABLE account,
the contributor’s total gifts to such indi-
vidual in that year could give rise to a gift
tax liability.
Contributions can be made by any per-
son. The term person is defined in section
7701(a)(1) to include an individual, trust,
estate, partnership, associations, company,
or corporation. Therefore, for purposes of
section 529A(b)(1)(A), a person includes
an individual as well as each of the entities
described in section 7701(a)(1). Although
under section 2501(a)(1), the gift tax ap-
plies only to gifts by individuals, it applies
to gifts made directly or indirectly. As a
result, a gift made by a trust, estate, as-
sociation, company, corporation, or part-
nership is treated for gift tax purposes as
having been made by the owner(s) of that
entity. For example, a gift from a corpo-
ration to a designated beneficiary is treat-
ed as a gift from the shareholders of the
corporation to the designated beneficiary.
See § 25.2511-1(h)(1). Accordingly, the
final regulations adopt unchanged the pro-
visions of the 2015 proposed regulations
and provide that, for purposes of section
529A, a contribution by a corporation is
treated as a gift by its shareholders and a
contribution by a partnership is treated as
a gift by its partners. This rule also applies
to trusts, estates, associations, and compa-
nies. See section 2511 and § 25.2511-1(c)
and (h).
The legislative history of section 529A
suggests that a “person” described in sec-
tion 529A(b)(1)(A) who can make contri-
butions to an ABLE account includes the
designated beneficiary of an ABLE ac-
count. See 160 Cong. Rec. H7051, H8317,
H8318, H8321, H8322 (2014). A person
may transfer his or her own funds into an
ABLE account of which that person is the
designated beneficiary. Because an indi-
vidual cannot make a gift to himself or
herself, the final regulations, like the 2015
proposed regulations, provide that no con-
tribution by a designated beneficiary to his
or her own ABLE account is treated as a
completed gift. See § 25.2511-2(b) and
(c).
However, because the statute contem-
plates that the funds being deposited into
an ABLE account are taxable gifts, and
the contributions from the designated ben-
eficiary into his or her own ABLE account
were never treated as completed gifts to
the designated beneficiary, the 2015 pro-
posed regulations provided that, notwith-
standing section 529A(c)(2)(C), which
makes gift and GST taxes inapplicable to
the change of beneficiary of an ABLE ac-
count if the transferee is both an eligible
individual and a sibling of the former des-
ignated beneficiary, if the designated ben-
eficiary transfers the funds in the account
to any other person, including a sibling,
the designated beneficiary making the
transfer is the donor for gift tax purposes
and the transferor for GST tax purposes to
the extent of the funding provided by that
designated beneficiary and the accumu-
lated earnings thereon. Although the pro-
visions of section 529A(c)(2)(C) would
appear to apply to exclude the balance of
the account from gift and GST taxes if the
transfer was to a sibling, one commenter
asked why, in that case, the entire value
of the account would not be a taxable gift.
That commenter also objected to requir-
ing ABLE programs to track contributions
from the designated beneficiary for this
purpose as being too burdensome.
2
In light of these comments, the Trea-
sury Department and the IRS have recon-
sidered the approach of the 2015 proposed
regulations, taking into account the com-
ments describing the burden of separately
tracking contributions from the designated
beneficiary. The final regulations balance
the treatment of contributions as a com-
pleted gift and the exclusion of gifts to a
sibling of the designated beneficiary by
taking the least burdensome approach, as
requested by these commenters. Specifi-
cally, even though the portion of the ac-
count attributable to contributions from the
designated beneficiary is the only part of
the ABLE account that was not previously
treated as a gift, the designated beneficiary
is the owner of the entire account and the
gift and GST tax properly applies to the
entire account when there is a change of
designated beneficiary, but those taxes are
inapplicable if the new designated benefi-
ciary is a sibling of the former designated
beneficiary. Making this change makes
it unnecessary for a qualified ABLE pro-
gram to separately track contributions
made by the designated beneficiary. The
final regulations reflect this change.
E. Return of excess contributions and
excess aggregate contributions
The 2015 proposed regulations define
an “excess contribution” as the amount
by which the amount contributed during
the taxable year of the designated bene-
ficiary to an ABLE account exceeds the
limit in effect under section 2503(b) (the
gift tax annual exclusion amount) for the
calendar year in which the taxable year of
the designated beneficiary begins (annual
contribution limit). The 2015 proposed
regulations defined an “excess aggregate
contribution” as the amount contributed
2
Another commenter stated that requiring a qualified ABLE program to assign “earnings attributable to that contribution” would require the qualified ABLE program to track specific tax
lots for each contribution, which would be unduly burdensome. Therefore, the commenter recommended that the phrase “any earnings attributable to that contribution” be deleted. It is not
correct that earnings would have to be tracked to meet such a requirement, as the rules for calculating earnings attributable to a contribution would not need to require tracking earnings on a
particular investment but could be based on the proportionate increase in value of the account over the relevant period. See § 1.408-11. However, given that the Treasury Department and the
IRS agree that the entire account would be a taxable gift, it is not necessary to calculate earnings attributable to a contribution.

Bulletin No. 2020–50 1571 December 7, 2020
during the taxable year of the designated
beneficiary that causes the total amount
contributed since the establishment of
the ABLE account to exceed the limit in
effect under section 529(b)(6) or, in the
context of the safe harbor, a contribution
that causes the account balance to exceed
the limit in effect under section 529(b)(6)
(aggregate contribution limit).
Consistent with section 529A(c)(3)(C),
the 2015 proposed regulations provided
that, if an excess contribution or an ex-
cess aggregate contribution is deposited
into or allocated to the ABLE account of a
designated beneficiary, a qualified ABLE
program would be required to return that
excess contribution or excess aggregate
contribution, along with all net income
attributable to the excess amount, to the
person or persons who made the contribu-
tion. The 2015 proposed regulations pro-
vided rules for determining the net income
attributable to a contribution made to an
ABLE account, and also provided that ex-
cess contributions and excess aggregate
contributions must be returned to their
contributors on a last-in-first-out (LIFO)
basis. The 2015 proposed regulations also
required that a returned contribution be
received by the contributor on or before
the due date (including extensions) for
the Federal income tax return of the des-
ignated beneficiary for the taxable year in
which the excess contribution or excess
aggregate contribution was made. Failure
to return an excess contribution within
that time period will result in the imposi-
tion on the designated beneficiary of a 6
percent excise tax under section 4973(a)
(6) on the amount of the excess contribu-
tion. See section 4973(a)(6) and (h)(2).
However, the 2015 proposed regulations
impose an affirmative obligation on the
qualified ABLE program to ensure that
these excess contributions are returned on
a timely basis so that the excise tax never
will be imposed on the designated bene-
ficiary.
The 2015 proposed regulations also
provided that, if an excess contribution or
excess aggregate contribution and the net
income attributable to such contribution
are returned to a contributor other than
the designated beneficiary, the qualified
ABLE program is to notify the designated
beneficiary of such return at the time of
the return.
One commenter objected to the require-
ment that an excess contribution or excess
aggregate contribution be returned to the
person or persons who made the contribu-
tion, which, according to the commenter,
places a burden on the qualified ABLE
program to track the source, amount, and
date of each contribution. The commenter
suggested that it would be less burden-
some if excess contributions and excess
aggregate contributions were returned in-
stead to the designated beneficiary who,
in turn, would then be responsible for re-
turning the contribution to the appropriate
contributor. The Treasury Department and
the IRS decline to adopt this suggestion.
Requiring the designated beneficiary to
return contributions would be unduly bur-
densome to the designated beneficiary,
the person for whom many commenters
requested as much simplification as pos-
sible. More importantly, contributions
returned to the designated beneficiary are
likely to be counted as a resource of the
designated beneficiary for purposes of de-
termining his or her eligibility for benefits
under certain means-tested government
programs, thus potentially causing the
designated beneficiary to lose eligibility
for those critical benefits.
Another commenter asked that the fi-
nal regulations eliminate the requirement
to return any earnings on an excess con-
tribution or excess aggregate contribution
to the contributor, citing the cost and other
burdens of creating an automated process
to track individual contributions and cal-
culate the earnings thereon. The Treasury
Department and the IRS decline to adopt
this suggestion because section 529A(c)
(3)(C)(ii) requires the return of the net
income attributable to an excess contribu-
tion. The statute also requires that the net
income attributable to an excess contri-
bution be determined in the same manner
as in the case of withdrawn excess contri-
butions to IRAs. In addition, because this
determination is based on the change in
value of the account, it does not require
the tracking of earnings attributable to
each contribution. For more information
on how to determine the net income at-
tributable to an excess contribution, see
Publication 590-A, “Contribution to Indi-
vidual Retirement Arrangements (IRAs)”,
Worksheet 1-4, “Determining the Amount
of Net Income Due To an IRA Contribu-
tion and Total Amount To Be Withdrawn
From the IRA.” See also § 1.408-11.
A few commenters also recommended
that the final regulations explicitly state
that a qualified ABLE program need not
notify the designated beneficiary when it
rejects and returns an excess contribution
or excess aggregate contribution from an-
other contributor to the designated ben-
eficiary’s ABLE account as long as such
contribution was not deposited into or
allocated to the ABLE account. Because
such a contribution could not have gener-
ated any earnings in the ABLE account,
the Treasury Department and the IRS
concluded that there is no need for such
a contribution to generate any reporting
requirement. The final regulations clarify
that notification is not required if amounts
are rejected by the qualified ABLE pro-
gram before they are deposited into or
allocated to the designated beneficiary’s
ABLE account.
Another commenter criticized the re-
quirement that excess contributions be
returned on a LIFO basis, stating that a
LIFO approach could result in the return
of contributions made by the designated
beneficiary before contributions made by
another person, thereby making an ABLE
account less attractive as a financial plan-
ning tool for the designated beneficiary.
The commenter recommended that the
final regulations require that the qualified
ABLE program return contributions made
by persons other than the designated ben-
eficiary before returning any contribution
made by the designated beneficiary. The
Treasury Department and the IRS decline
to adopt this recommendation in the final
regulations. The Treasury Department and
the IRS note that a qualified ABLE pro-
gram may allow the designated beneficia-
ry or person with signature authority over
an ABLE account to place restrictions on
the contributors and/or the amounts con-
tributed to the account if the designated
beneficiary is concerned about the impact
of the unwanted contributions on financial
planning. In addition, adopting the sug-
gestion would impose additional burdens
on the qualified ABLE programs, that then
would be required to separately track con-
tributions from the designated beneficia-
ry (which several commenters opposed).
Moreover, many states have designed
their programs and administrative systems

December 7, 2020 1572 Bulletin No. 2020–50
to stop accepting contributions once the
total contributions or value of the account
reaches the applicable limit. Such a sys-
tem is not consistent with a rule other than
a LIFO rule.
F. Return of excess compensation
contribution
The 2019 proposed regulations de-
fined an excess compensation contribu-
tion as the amount by which the amount
contributed during the taxable year of an
employed designated beneficiary to the
designated beneficiary’s ABLE account
exceeds the limit in effect under section
529A(b)(2)(B)(ii) for the calendar year in
which that taxable year of the employed
designated beneficiary begins.
Consistent with section 529A(b)(2)
and the 2019 proposed regulations, if an
excess compensation contribution is de-
posited into or allocated to the ABLE
account of a designated beneficiary, the
qualified ABLE program must return the
excess contribution, along with all net
income attributable to the excess contri-
bution, as determined under the rules set
forth in § 1.408-11 (treating references to
an IRA as references to an ABLE account,
and references to returned contributions
under section 408(d)(4) as references to
excess compensation contributions), to
the employed designated beneficiary. Also
consistent with section 529A(b)(2) and
the 2019 proposed regulations, the final
regulations provide that it will be the sole
responsibility of the designated beneficia-
ry (or the person acting on the designated
beneficiary’s behalf) to identify and re-
quest the return of any excess contribu-
tion of such compensation income. Such
returns of excess compensation contribu-
tions must be received by the employed
designated beneficiary on or before the
due date (including extensions) of the des-
ignated beneficiary’s income tax return for
the year in which the excess compensation
contributions were made. A failure to re-
turn excess compensation contributions
within this time period will result in the
imposition on the designated beneficiary
of a 6 percent excise tax under section
4973(a)(6) on the amount of excess com-
pensation contributions.
Additionally, in order to minimize ad-
ministrative burdens for the designated
beneficiary and the qualified ABLE pro-
gram, for purposes of ensuring that the
limit on contributions made under section
529A(b)(2)(B)(ii) is not exceeded, the
final regulations, like the 2019 proposed
regulations, provide that the qualified
ABLE program may rely on self-certifi-
cations, made under penalties of perjury,
of the designated beneficiary or the per-
son acting on the designated beneficiary’s
behalf.
G. Request for the TIN of a contributor
Because a qualified ABLE program is
required to return to the contributor any
excess contribution or excess aggregate
contribution that is deposited into or al-
located to an ABLE account (along with
any net income attributable to the con-
tribution), the 2015 proposed regulations
required a qualified ABLE program to re-
quest the TIN of each contributor to the
ABLE account at the time a contribution
was made if the qualified ABLE program
did not already have a record of that per-
son’s correct TIN.
Numerous commenters expressed con-
cerns about the substantial burdens that
they anticipate this provision would place
upon qualified ABLE programs. Com-
menters noted that contributions are likely
to come from many sources and be made
in various ways (for example, payroll
deduction, check, debit, automated clear-
ing house (ACH) transfers, and others),
making it difficult as a practical matter to
obtain the TIN of the contributor. Com-
menters also conjectured that some con-
tributors, especially those making small
gifts, might be reluctant to make a con-
tribution if they were required to provide
their TIN.
As an alternative to the provision in the
2015 proposed regulations, one comment-
er suggested that the final regulations re-
quire the qualified ABLE program to pay
an excess contribution to the designated
beneficiary rather than the contributor,
thereby obviating the need to procure the
contributor’s TIN. As noted previously,
the Treasury Department and the IRS do
not agree with this suggestion, because the
designated beneficiary’s receipt of such an
excess amount could put the designated
beneficiary at risk of being disqualified for
his or her Federal benefits that are income
or resource based, a result that would be
inconsistent with the purposes of section
529A.
Other commenters suggested that a
qualified ABLE program be required to
collect a contributor’s TIN only if the pro-
gram does not have a system in place to
prevent an excess contribution or excess
aggregate contribution from being depos-
ited into an ABLE account. The comment-
ers expect that most qualified ABLE pro-
grams will adopt the automated systems
currently used by section 529 qualified
tuition programs either to reject such ex-
cess contributions before they are depos-
ited into a particular ABLE account, or to
escrow and immediately refund the excess
contributions, again before being deposit-
ed into or allocated to a particular account.
With such a system in place, qualified
ABLE programs should not need to return
net earnings on contributions, and thus
would not need the contributor’s TIN.
Other commenters recommended that the
obligation to request a contributor’s TIN
should arise only in the unlikely circum-
stance in which an excess contribution or
excess aggregate contribution has been
deposited into an individual’s ABLE ac-
count and has accrued earnings or losses.
One commenter suggested eliminating the
TIN requirement altogether, while another
suggested the collection of TINs should be
required only in the case of contributions
of more than a specified dollar amount.
Commenters requested interim guid-
ance on this issue to facilitate the estab-
lishment of qualified ABLE programs
by the States. In response, the Treasury
Department and the IRS issued Notice
2015-81, advising that it was anticipated
that the final regulations would modify
the requirement that a qualified ABLE
program request the TIN of a contribu-
tor at the time of the contribution. That
modification, which is adopted in the
final regulations, requires a qualified
ABLE program to request the TIN of a
contributor at the time a contribution is
made (assuming the qualified ABLE pro-
gram does not already have a record of
the contributor’s correct TIN) only if the
qualified ABLE program does not have a
system in place to identify and reject ex-
cess contributions and excess aggregate
contributions before they are deposited
into or allocated to an ABLE account. In

Bulletin No. 2020–50 1573 December 7, 2020
the event that a qualified ABLE program
has such a system in place but an excess
contribution or excess aggregate contri-
bution, nevertheless, is deposited into or
allocated to an ABLE account, the qual-
ified ABLE program then must request
the TIN of the contributor who made the
excess contribution or excess aggregate
contribution in order to permit the ABLE
program to file accurate and complete
required reporting of the earnings attrib-
utable thereto. A return of contributions
and earnings from the ABLE account is
a distribution, so the IRS and the con-
tributor must receive a Form 1099-QA,
“Distributions from ABLE Accounts”,
showing the contributor’s TIN.
4. Investment Direction
Consistent with section 529A(b)(4),
the 2015 proposed regulations provided
that a qualified ABLE program may not
allow the designated beneficiary of an
ABLE account to direct, either directly or
indirectly, the investment of any contribu-
tions to his or her account (or any earnings
thereon) more often than twice in any cal-
endar year. The 2015 proposed regulations
provided that a program does not violate
this requirement merely because it permits
a designated beneficiary or a person with
signature authority over a designated ben-
eficiary’s account to serve as one of the
program’s board members or employees,
or as a board member or employee of a
contractor that the program hires to per-
form administrative services.
One commenter inquired whether the
designated beneficiary would be allowed
to direct investments of contributions
more than twice a year due to a change
in the investment climate. Another com-
menter suggested that the designated ben-
eficiary be allowed to direct the invest-
ment of contributions in his or her ABLE
account at least monthly, while yet another
commenter recommended up to four per-
mitted changes per year. Because section
529A(b)(4) requires a qualified ABLE
program to limit the number of times any
designated beneficiary may, directly or in-
directly, direct the investment of any con-
tribution to no more than two times in any
calendar year, the Treasury Department
and the IRS do not adopt these sugges-
tions in the final regulations.
Some commenters asked that the final
regulations clarify that an investment di-
rection does not include the transfer of ac-
count assets from the investment portion
of an ABLE account to a money market
account or similar vehicle maintained by
the qualified ABLE program to process a
requested distribution. The Treasury De-
partment and the IRS agree with these
commenters that moving funds from an
investment fund into a cash fund within
the ABLE account in order to process a
distribution is not the kind of change in in-
vestment direction addressed by the stat-
utory limit, and have made the requested
clarification in the final regulations.
Another commenter suggested that
the final regulations clarify that a reallo-
cation of the assets in an ABLE account
among different broad-based investment
strategies offered on the qualified ABLE
program’s investment menu (such as a
reallocation from a diversified large cap
fund to a diversified bond fund, or from
a small cap fund to a target date fund)
does not constitute investment direction.
In the commenter’s view, the reallocation
of a portion of an ABLE account’s assets
among a set of broad-based investment
options offered by the qualified ABLE
program, such as diversified mutual funds,
age-based target date funds, or Federal-
ly-insured CDs, is not investment direc-
tion because the designated beneficiary is
not exercising control over the underlying
investments, as would be the case if he
or she were allowed to invest in specific
stocks or funds not offered as part of the
qualified ABLE program’s menu of broad-
based strategies. The commenter asserted
that, by offering a limited menu of broad-
based investment options, the qualified
ABLE program effectively makes the
investment decisions and that giving the
designated beneficiary the authority to
make periodic reallocations among these
options is not sufficient control to be con-
sidered an investment direction.
The Treasury Department and the IRS
do not agree with this commenter. The
Treasury Department and the IRS con-
cluded that a reallocation of an account’s
assets among different investment vehi-
cles or types of funds constitutes an in-
vestment direction within the meaning of
section 529A(b)(4), with two exceptions.
As addressed earlier in this section 4, the
first exception is the transfer of assets
within an ABLE account to a cash fund.
The second exception is an automatic
rebalancing of the assets in an ABLE ac-
count merely to maintain a particular asset
allocation. The Treasury Department and
the IRS concluded that such an adjustment
is not a change in investment direction; in-
stead, it is to preserve and effectuate an
investment allocation or direction selected
at some previous time that is needed be-
cause of the frequent fluctuations in mar-
ket values of investments. Accordingly,
the final regulations provide that neither
of these adjustments is a change in in-
vestment direction for purposes of section
529A(b)(4).
Some commenters asked how the an-
nual limit on investment direction ap-
plies to a successor designated benefi-
ciary in the year in which he or she first
succeeds to the ABLE account of the
former designated beneficiary. The Trea-
sury Department and the IRS understand
that the former and successor designated
beneficiaries may have different financial
situations, and, therefore, different invest-
ment needs. These final regulations apply
the contribution limits separately to each
designated beneficiary, and the Treasury
Department and the IRS concluded that it
would be most consistent with the purpose
of section 529A and its other provisions
to provide that the investment change
limitation also applies separately to each
designated beneficiary. As a result, the fi-
nal regulations provide that the successor
designated beneficiary is allowed to direct
the investment of contributions and earn-
ings in the ABLE account up to two times
in the calendar year in which he or she
becomes the designated beneficiary of the
ABLE account, regardless of whether the
former designated beneficiary previously
had done so in the same calendar year.
5. No Pledging of Interest as Security for
a Loan
Consistent with section 529A(b)(5), the
2015 proposed regulations provided that a
program will not be treated as a qualified
ABLE program unless the terms of the
program, or a state statute or regulation
that governs the program, prohibit any in-
terest in the program or any portion there-
of from being used as security for a loan.

December 7, 2020 1574 Bulletin No. 2020–50
A few commenters observed that many
ABLE accounts are likely to be transac-
tional in nature. One commenter asked
whether a checking account or a debit or
credit card can be issued to a designated
beneficiary and linked to his or her ABLE
account. Another commenter asked that
the final regulations clarify that advanc-
ing funds from an ABLE account to the
designated beneficiary – such as through a
checking account or debit card privileges
connected to the ABLE account – is nei-
ther a loan nor security for a loan. Another
commenter, observing that checking ac-
counts and debit cards likely will be asso-
ciated with ABLE accounts, noted that it
is unlikely that a qualified ABLE program
will be able to convert an account’s under-
lying investments into cash on the same
day as the transaction to be funded oc-
curs. In other contexts, these transactional
capabilities generally are effected by an
issuer’s zero interest advance for a short
period in order to fund the account or deb-
it card, followed by a reimbursement of
the issuer when the cash generated by the
liquidation of the investment is received
by the issuer. The commenter further ob-
served that these short-term advances are
distinguishable from third party loans and
requested that the final regulations clari-
fy that these short-term advances are not
loans. Similarly, the commenter request-
ed that the final regulations clarify that
an advance made to an ABLE account by
a qualified ABLE program before settle-
ment of a check or other money transfer
by a contributor is not a loan.
The Treasury Department and the
IRS agree that it is possible for an ABLE
program to permit the use of checking
accounts and debit cards to facilitate the
qualified ABLE program’s ability to make
qualified distributions. For purposes of
section 529A, the final regulations do not
treat these uses—which are necessary to
make funds available for qualified disabil-
ity expenses as intended— as pledging the
interest in the ABLE account as security
for a loan, provided that these uses do not
result in an advance of funds to a desig-
nated beneficiary in excess of the amount
in his or her ABLE account. Similarly, the
program administrator’s advance of funds
to satisfy a withdrawal request while the
proceeds from the sale of an account as-
set, sufficient to satisfy that withdrawal
request, clear or settle will not be treated
as a pledge or grant of security or as a loan
for purposes of this section. However,
whether a different particular arrangement
constitutes the use of an interest in a qual-
ified ABLE program as security for a loan
is a factual determination that is beyond
the scope of these regulations.
6. Distributions and Transfers
A. Qualified disability expenses
In accordance with section 529A(e)
(5), the 2015 proposed regulations de-
fined qualified disability expenses as any
expenses incurred at a time when the des-
ignated beneficiary of an ABLE account
is an eligible individual that relate to the
blindness or disability of the designated
beneficiary, including expenses that are
for the benefit of the designated beneficia-
ry in improving his or her health, indepen-
dence, or quality of life. Such expenses in-
clude, but are not limited to, expenses for
education, housing, transportation, em-
ployment training and support, assistive
technology and personal support services,
health prevention and wellness, financial
management and administrative services,
legal fees, expenses for oversight and
monitoring, funeral expenses, and other
expenses that may be identified from time
to time in future guidance published in the
Internal Revenue Bulletin. Such expens-
es include basic living expenses and are
not limited to items for which there is a
medical necessity or which solely benefit
the designated beneficiary. As an example
of a qualified disability expense, the 2015
proposed regulations included the expense
of buying, using, and maintaining a smart-
phone used by an individual with a mental
impairment to help her navigate and com-
municate more safely and effectively. In
the preamble to the 2015 proposed regu-
lations, the Treasury Department and the
IRS requested comments regarding the
types of expenses that should be consid-
ered qualified disability expenses and un-
der what circumstances.
Many commenters commended the
2015 proposed regulations’ expansive
definition of qualified disability expenses.
Commenters generally found the example
helpful. However, one commenter point-
ed out that the expense of maintaining a
smartphone could be considered a basic
living expense and need not be tied to any
particular disability or impairment to be
considered a qualified disability expense.
While acknowledging the difficulty
of compiling an exhaustive list of quali-
fied disability expenses, many comment-
ers suggested a wide variety of expenses
that they believed should be considered
qualified disability expenses. One com-
menter requested that the final regulations
provide more comprehensive guidance
on the scope of, and exclusions from, the
definition of qualified disability expenses
so that a designated beneficiary may cor-
rectly determine his or her tax liability.
Believing that most, if not all, expenses
of an eligible individual could be consid-
ered qualified disability expenses, another
commenter suggested defining types of
expenses that are not qualified disabili-
ty expenses. The commenter suggested
that expenses that do not directly benefit
the designated beneficiary, such as the
expense of a gift for someone other than
the designated beneficiary, are not quali-
fied disability expenses. One commenter
suggested that an online list of examples
be maintained and accessible to the pub-
lic. Another commenter recommended
that all disbursements be deemed to be for
qualified disability expenses until proven
otherwise.
The Treasury Department and the IRS
continue to view the definition of qualified
disability expenses as expansive. Whether
a particular expense is a qualified disabil-
ity depends on each designated beneficia-
ry’s unique circumstances and whether the
expense is for maintaining or improving
the health, independence, or quality of
life of the designated beneficiary. There-
fore, the Treasury Department and the IRS
cannot provide either a comprehensive list
of qualified disability expenses or a short
list of expenses that would not satisfy that
standard. The Treasury Department and
the IRS note that Congress did not de-
fine a qualified disability expense as any
expenditure for the benefit of an eligible
individual, nor did Congress define a qual-
ified disability expense as an expense that
benefits only the eligible individual. The
ABLE Act mandates different tax treat-
ment for those expenses that are qualified
disability expenses and those that are not.
Consequently, the final regulations retain

Bulletin No. 2020–50 1575 December 7, 2020
the 2015 proposed regulations’ broad, but
not unlimited, definition of a qualified dis-
ability expense.
One commenter requested that the
same permissible categories of expenses
be used to define a qualified disability ex-
pense for purposes of both section 529A
and SSA programs to provide consisten-
cy for disabled individuals. Because the
categories suggested in that comment are
identical to those included in the 2015 pro-
posed regulations, no change is required
in response to this comment. Further, be-
cause the Treasury Department and the
IRS have no authority with regard to any
program administered by the SSA, it is up
to SSA to decide whether or not to adjust
SSA’s definitions.
A few commenters asked that the final
regulations provide a process for appeal-
ing a determination on examination by
the IRS that a particular expense is not a
qualified disability expense. The Treasury
and the IRS note that an appeals process
already exists under the IRS’ examina-
tion procedures. For more information,
visit the IRS Office of Appeals’ website
at https://www.irs.gov/appeals/consider-
ing-an-appeal, or consult IRS Publication
5: Your Appeal Rights and How to Prepare
a Protest If You Don’t Agree.
The 2015 proposed regulations pro-
vided that a qualified ABLE program is
required to establish safeguards to permit
the identification of the amounts distrib-
uted for housing expenses as that term is
defined for purposes of the SSI program
of the SSA. One commenter requested a
more specific definition of housing ex-
penses, but other commenters noted that,
because the identification of housing ex-
penses is relevant only for purposes of
determining eligibility for certain Social
Security benefits and has no relevance for
Federal income tax purposes, any refer-
ence to classifying distributions as hous-
ing expenses should be eliminated from
the regulations. The Treasury Department
and the IRS agree, and the final regulations
do not require a qualified ABLE program
to identify or record whether distributions
were made for housing expenses.
Commenters also expressed concerns
regarding the requirement that a qualified
ABLE program must establish safeguards
to distinguish between distributions for
qualified disability expenses and other dis-
tributions. Commenters emphasized that
requiring a qualified ABLE program to
determine how a distribution will be used
prior to making the distribution would be
unduly burdensome for both the program
and the designated beneficiary, and they
explained that the actual use of a distri-
bution might not be known by the desig-
nated beneficiary and thus by the ABLE
program when the distribution is made.
The commenters recommended that any
requirement or suggestion that the quali-
fied ABLE program classify distributions
be removed from the regulations. The
Treasury Department and the IRS agree
that it would be burdensome and unad-
ministrable to require the qualified ABLE
programs to categorize and keep track of
the actual use of each distribution by the
designated beneficiary. Consistent with
Notice 2015-81, the final regulations do
not require, for any Federal income tax
purpose, a qualified ABLE program to
establish safeguards to distinguish be-
tween distributions used for the payment
of qualified disability expenses and other
distributions.
Commenters also expressed concerns
that the 2015 proposed regulations require
designated beneficiaries to report or to
justify the reason for each distribution at
the time of the distribution. Another com-
menter requested clarification that distri-
butions may be made for qualified disabil-
ity expenses through entities including
section 501(c)(3) charitable organizations
and special needs trusts as described in
42 U.S.C. 1396p(d)(4). The Treasury De-
partment and the IRS wish to clarify that
the statute, the 2015 proposed regulations,
and the final regulations do not require the
designated beneficiary to report his or her
qualified disability expenses to the qual-
ified ABLE program or to the IRS when
filing a tax return. However, just as with
qualified higher education expenses under
section 529, the designated beneficiary
will need to categorize distributions from
the ABLE account in order to properly de-
termine his or her Federal income tax ob-
ligations. Therefore, the designated bene-
ficiary should maintain adequate records
for determining and supporting his or her
qualified disability expenses for each tax-
able year. The final regulations clarify that
the payment of administrative or invest-
ment fees charged by a qualified ABLE
program is not a distribution. The Trea-
sury Department and the IRS note that
distributions may be made for all qualified
disability expenses of the designated ben-
eficiary, regardless of whether the payee is
an individual, organization, or trust.
B. Taxation of distributions
Consistent with section 529A(c)(1), the
2015 proposed regulations provide that, if
distributions do not exceed the designated
beneficiary’s qualified disability expenses
for the year, no amount is includible in the
designated beneficiary’s gross income.
Otherwise, the earnings portion of the dis-
tributions from the ABLE account as de-
termined under section 72, reduced by the
product of such earnings portion and the
ratio of the qualified disability expenses
for the year to the total distributions in that
year, is includible in the gross income of
the designated beneficiary to the extent not
otherwise excluded from income. For pur-
poses of applying section 72 to amounts
distributed from an ABLE account, the
2015 proposed regulations provided that:
(1) all distributions during a taxable year
are treated as one distribution; and (2) the
value of the contract, income on the con-
tract, and investment in the contract are
computed as of the close of the calendar
year in which the designated beneficiary’s
taxable year began.
For purposes of determining whether
distributions from an ABLE account ex-
ceed qualified disability expenses in any
given year, one commenter suggested
that the final regulations allow qualified
disability expenses incurred before April
15 of any given year to count as qualified
disability expenses for the immediately
preceding year. The commenter expressed
concern that a distribution taken late in
one year but not used to pay for qualified
disability expenses until the next year
could cause a designated beneficiary’s
distributions to exceed his or her quali-
fied disability expenses in the year of the
distribution. Another commenter recom-
mended that the final regulations require
a nexus between a distribution from an
ABLE account and the payment of qual-
ified disability expenses by prescribing a
period of time (for example, 60, 90, or 120
days) after a distribution is made during
which the proceeds must be used to pay

December 7, 2020 1576 Bulletin No. 2020–50
for a qualified disability expense. Some
commenters also raised questions regard-
ing the relevance of incurring versus pay-
ing the expenses for purposes of compar-
ing the total qualified disability expenses
to the total distributions in the designated
beneficiary’s taxable year.
The Treasury Department and the IRS
understand that a designated beneficiary
could take a distribution in anticipation
of an expense that does not materialize
and thus want to redeposit the distribution
into the ABLE account, or that an expense
incurred in one year may be billed and
paid in the following year. The Treasury
Department and the IRS concluded that,
for purposes of determining the desig-
nated beneficiary’s income tax liability,
the distributions from an ABLE account
should be compared to the qualified dis-
ability expenses that are paid, rather than
just incurred, during the year because it is
payments that appear in a taxpayer’s re-
cords and that generally determine income
tax consequences. However, to relieve the
possible disadvantage to a designated ben-
eficiary from a potential timing mismatch
of the distribution and the payment of the
expense, and to permit the redeposit of an
unused distribution, the Treasury Depart-
ment and the IRS agree that it is appro-
priate and helpful to allow a grace period.
Therefore, the final regulations provide
that a designated beneficiary may treat
qualified disability expenses paid by the
sixtieth day immediately following the
end of the designated beneficiary’s taxable
year as if they had been paid in the imme-
diately preceding taxable year, but any ex-
pense so treated may not be counted again
with respect to the year in which it is paid.
Section 529A(c)(1)(A) provides that
any distribution under a qualified ABLE
program is includible in the gross income
of the distributee in the manner provided
under section 72 to the extent not other-
wise excluded from gross income under
any other provision of the Code. Not-
ing the similarities between the taxation
of distributions under sections 529 and
529A, a few commenters recommended
that the method for determining the earn-
ings ratio of a distribution from an ABLE
account be made consistent with the rule
applicable to section 529 programs under
Notice 2001-81, which provided that the
Treasury Department and the IRS expect
that final regulations under section 529,
when issued, will require section 529
programs to determine the earnings por-
tion of each distribution from a section
529 account separately as of the date of
its distribution. The commenters advised
that the imposition of a different method
with respect to qualified ABLE programs
would require service providers to build
a separate recordkeeping system specif-
ic to ABLE accounts, thereby increasing
program costs. Moreover, determining
the earnings portion of a distribution as
of the date of distribution facilitates the
administration of partial rollovers and
program-to-program transfers, the earn-
ings of which must be calculated as of the
date of distribution rather than at the end
of the year. These commenters also ex-
plained that using the date of each distri-
bution rather than a year-end total would
not change the income tax impact on the
designated beneficiary because his or her
taxable income is determined by a ratio
applied to total earnings.
The Treasury Department and the IRS
agree with the commenters. Harmonizing
how the earnings ratio is determined under
section 529A with how it is determined
under section 529 should reduce admin-
istrative costs of the qualified ABLE pro-
grams, making the programs more cost-ef-
fective. Therefore, the final regulations
provide that the earnings ratio, as applied
to a particular distribution, is determined
as of the date of distribution, and is equal
to the amount of earnings attributable to
the account as of the date of distribution
divided by the total account balance on
that date.
C. Change of designated beneficiary
Section 529A(c)(1)(C) addresses the
tax consequences of a change of desig-
nated beneficiary of an ABLE account.
With respect to such a change, the 2015
proposed regulations described the cir-
cumstances in which amounts will be
includible in the designated beneficiary’s
income. The 2015 proposed regulations
provided that a change of designated ben-
eficiary is not treated as a distribution, and
therefore does not result in gross income,
but this rule applies only if the new des-
ignated beneficiary is both (1) an eligible
individual for his or her taxable year in
which the change is made and (2) a sibling
of the former designated beneficiary.
The 2015 proposed regulations re-
quired a qualified ABLE program to per-
mit a change in the designated beneficiary
of an ABLE account, but only during the
lifetime of the designated beneficiary, and
only if the successor designated beneficia-
ry is an eligible individual. Because the
designated beneficiary could be subject
to gift tax and/or GST tax if the successor
designated beneficiary is not a sibling of
the designated beneficiary, the Treasury
Department and the IRS requested com-
ments on whether the final regulations
should allow States to limit a permissible
successor designated beneficiary to a sib-
ling of the designated beneficiary.
Several commenters recommended that
the final regulations require any successor
designated beneficiary to be a sibling of
the designated beneficiary. However, one
commenter pointed out that a designated
beneficiary might not have a sibling who
is an eligible individual, and recommend-
ed that qualified ABLE programs not be
permitted to limit the successor designat-
ed beneficiary to a sibling who is an el-
igible individual, but recommended that
a change to any other eligible individual
require notice to the designated beneficia-
ry of the adverse tax implications for that
designated beneficiary. Another comment-
er asked whether a qualified ABLE pro-
gram could limit the successor designated
beneficiary to a sibling of the designated
beneficiary if the final regulations do not
impose that limitation.
The Treasury Department and the IRS
concluded that, although section 529A im-
poses income and transfer tax consequenc-
es on a change of designated beneficiary
if the successor designated beneficiary is
not an eligible individual who is a sibling
of the former designated beneficiary, the
statute does not prohibit such changes.
Therefore, the final regulations do not im-
pose such a restriction. However, in order
to minimize the potential that the desig-
nated beneficiary will have adverse tax
consequences, the final regulations permit
a qualified ABLE program to limit succes-
sor designated beneficiaries to a sibling,
provided that the successor designated
beneficiary also is an eligible individual.
If a successor designated beneficiary is
not a sibling of the former designated ben-

Bulletin No. 2020–50 1577 December 7, 2020
eficiary, the former designated beneficiary
will have received a deemed distribution
of the amount transferred to the successor
designated beneficiary that is subject to all
of the tax provisions in section 529A(c).
One commenter suggested that the final
regulations define “member of the family”
broadly, as in the proposed regulations
under section 529, to include descendants
and ancestors of the designated beneficia-
ry, rather than only a sibling. The Treasury
Department and the IRS note that the term
“member of the family” is expressly de-
fined by section 529A(e)(4). Therefore,
the final regulations do not expand the
meaning of that term to also include de-
scendants and ancestors of the designated
beneficiary.
Several commenters asked that the
final regulations allow the designated
beneficiary or the person with signature
authority over an ABLE account to desig-
nate an individual, who is both an eligible
individual and a sibling of the designated
beneficiary, to be the successor designated
beneficiary of the account, effective upon
the death of the designated beneficiary.
Commenters suggested that such a desig-
nation should be conditioned on the named
successor designated beneficiary being an
eligible individual at the time of the desig-
nated beneficiary’s death. One commenter
suggested permitting the naming of a sec-
ondary successor designated beneficiary.
Commenters suggested that, if the succes-
sor designated beneficiary already has an
ABLE account, the funds of the deceased
designated beneficiary’s ABLE account
should be rolled into the ABLE account of
the successor designated beneficiary, and
one commenter requested that the final
regulations exempt such a rollover from
the restriction under section 529A(c)(1)
(C)(iii) preventing more than one rollover
to the same designated beneficiary within
a 12-month period. One commenter asked
that the final regulations allow a reason-
able bereavement period (for example,
one year) after the death of the designated
beneficiary, during which the guardian of
the deceased designated beneficiary, the
executor of his or her estate, or a court
could transfer the ABLE account to a
sibling of the deceased designated bene-
ficiary who is then an eligible individual.
Finally, one commenter asked that the fi-
nal regulations allow the distribution of a
deceased designated beneficiary’s ABLE
account to the section 529 account of his
or her child or to a health savings account
for his or her family.
The Treasury Department and the
IRS recognize the difficulties faced by
the family, friends, and caregivers of a
designated beneficiary at the end of the
designated beneficiary’s life. In order to
alleviate some of these difficulties, the
final regulations allow a qualified ABLE
program to permit a successor designated
beneficiary to be named during the life-
time of the designated beneficiary that
will take effect upon the death of the des-
ignated beneficiary. The designation must
be made before the designated beneficia-
ry’s death. If no successor designated ben-
eficiary is named, the assets in the ABLE
account are payable to the estate of the
deceased designated beneficiary. Before
any transfer to the successor designated
beneficiary, however, the ABLE account
is subject to the Federal estate tax imposed
by chapter 11 of the Code upon the estate
of the deceased designated beneficiary, as
well as to the payment of any outstanding
qualified disability expenses of the dece-
dent and any State claim under section
529A(f).
D. Rollovers and program-to-program
transfers
Under section 529A(c)(1)(C), a roll-
over from an ABLE account is not treat-
ed as a distribution includible in the gross
income of the distributee. The 2015 pro-
posed regulations defined a rollover as an
amount withdrawn from the ABLE ac-
count of a designated beneficiary and con-
tributed, within 60 days of the date of the
withdrawal, to another ABLE account of
the designated beneficiary, or to the ABLE
account of an eligible individual who is a
sibling of the designated beneficiary, pro-
vided that, in the case of a contribution to
the ABLE account of the same designated
beneficiary, no rollover has been made to
an ABLE account of the designated bene-
ficiary within the prior 12 months.
The 2015 proposed regulations also
provided that a program-to-program trans-
fer is not a distribution and is not inclu-
dible in income. A “program-to-program
transfer” is the direct transfer of the entire
balance of an ABLE account that will be
closed upon completion of the transfer
into an ABLE account of the same des-
ignated beneficiary, or the direct transfer
of part or all of the balance to an ABLE
account of another eligible individual
who is a sibling of the former designat-
ed beneficiary, without any intervening
distribution or deemed distribution to the
designated beneficiary or former desig-
nated beneficiary. In the preamble to the
2015 proposed regulations, the Treasury
Department and the IRS stated that a pro-
gram-to-program transfer may be prefer-
able to a rollover in protecting the desig-
nated beneficiary’s eligibility for benefits
under Federal and State means-tested
programs. A program-to-program trans-
fer also could facilitate the transfer of in-
formation concerning contributions and
accumulated earnings. In light of these
expected benefits, the Treasury Depart-
ment and the IRS requested comments
as to whether and to what extent a qual-
ified ABLE program should be permitted
to require that funds from another State’s
ABLE program be accepted only through
program-to-program transfers.
Many commenters expressed approval
of the rules allowing program-to-program
transfers, but several of these commenters
recommended that the final regulations
continue to allow the use of a rollover
as a means of transferring funds from
one qualified ABLE program to another.
Consistent with section 529A(c)(1)(C),
the final regulations continue to permit
rollovers and do not require the use of a
program-to-program transfer. However,
the Treasury Department and the IRS rec-
ognize that qualified ABLE programs may
differ in determining how best to adminis-
ter their programs. For example, a quali-
fied ABLE program may choose to require
that a transfer of funds from one ABLE
account to another under the program or
to or from an ABLE account under anoth-
er qualified ABLE program be by a pro-
gram-to-program transfer.
Like the 2015 proposed regulations,
the final regulations provide that, upon a
rollover or program-to-program transfer,
all the attributes of the former ABLE ac-
count relevant for purposes of calculating
the investment in the account and apply-
ing the cumulative limits on contributions
are applicable to the recipient account.
The portion of the rollover or transfer

December 7, 2020 1578 Bulletin No. 2020–50
amount that constituted investment in the
account from which the distribution or
transfer was made becomes an investment
in the recipient ABLE account. Similar-
ly, the portion of the rollover or transfer
amount that constituted earnings of the
account from which the distribution or
transfer was made constitutes earnings of
the recipient account. For purposes of the
annual contribution limit, contributions do
not include program-to-program transfers
or rollovers.
Several commenters asked that the fi-
nal regulations permit a tax-free rollover
from a qualified tuition account under sec-
tion 529 to an ABLE account for the same
designated beneficiary. The commenters
believe that such a provision would be
particularly important to the designated
beneficiary of a qualified tuition account
who becomes disabled and is unable to
attend college. Since the issuance of the
2015 proposed regulations, the TCJA
amended section 529 to permit, before
January 1, 2026, a limited rollover from a
section 529 account to an ABLE account
of the same designated beneficiary or a
member of his or her family as defined
expansively under section 529 to include,
among others, a designated beneficiary’s
ancestors and descendants. The Treasury
Department and the IRS issued Notice
2018-58, 2018-33 I.R.B. 305 (Aug. 13,
2018) announcing how they intended to
provide clarification regarding the roll-
over provision. In light of this change, the
final regulations define “contribution” to
include this limited rollover from such a
section 529 account.
Similarly, one commenter asked that fi-
nal regulations permit the tax-free rollover
from the ABLE account of an individual
to a qualified tuition account under sec-
tion 529 for the benefit of a child of that
individual. The Code does not provide for
a tax-free transfer from a qualified ABLE
account to a qualified tuition account un-
der section 529 because such a distribu-
tion would not be for a qualified disability
expense. Accordingly, this comment is not
adopted in the final regulations.
E. Post-death payments
Consistent with section 529A(f), the
2015 proposed regulations required that
a portion or all of the balance remaining
in the ABLE account of a deceased des-
ignated beneficiary (after providing for
the payment of all outstanding qualified
disability expenses of the designated ben-
eficiary) be distributed to a State that files
a claim against the designated beneficiary
or against the ABLE account with respect
to benefits provided to the designated
beneficiary under that State’s Medicaid
plan (Medicaid reimbursement claim).
The payment of such claim is limited to
the amount of the total medical assistance
paid for the designated beneficiary after
the establishment of the ABLE account
over the amount of any premiums paid
to a Medicaid Buy-In program under any
State Medicaid plan.
One commenter asked for confirmation
that a State’s ABLE program will not fail
to qualify as a qualified ABLE program
merely because State law prohibits the
State’s Medicaid agency from filing Med-
icaid reimbursement claims. The Treasury
Department and the IRS agree that a State
law mandating that the State’s Medicaid
agency refrain from filing Medicaid reim-
bursement claims will not jeopardize the
status of the State’s ABLE program as a
qualified ABLE program. Section 529A(f)
does not require a State to file a Medicaid
reimbursement claim.
Commenters asked whether a qualified
ABLE program may make distributions,
including payment on an existing contract
for funeral expenses, before it receives
a State Medicaid reimbursement claim.
Commenters also asked whether a quali-
fied ABLE program has an obligation to
determine the validity or accuracy of a
state’s Medicaid reimbursement claim or
whether multiple States are able to file a
claim.
Consistent with section 529A, the final
regulations provide that a qualified ABLE
program may satisfy a State’s Medicaid
reimbursement claim only after providing
for the payment of any outstanding qual-
ified disability expenses of the deceased
designated beneficiary, including the des-
ignated beneficiary’s funeral and burial
expenses, whether or not the subject of a
pre-death contract for those services. The
final regulations do not impose an obli-
gation on the qualified ABLE program to
verify the validity or accuracy of a State’s
Medicaid reimbursement claim. However,
as noted previously, the payment of any
claim is limited to the amount of total
medical assistance paid for the designated
beneficiary after the establishment of the
ABLE account, net of any premiums paid
(whether from the ABLE account or oth-
erwise by or on behalf of the designated
beneficiary) to a State Medicaid Buy-In
program. In addition, no obligation is im-
posed on the qualified ABLE program to
determine whether claims could be filed
by multiple States. After the expiration of
the applicable statute of limitations for fil-
ing Medicaid claims against the designat-
ed beneficiary’s estate, a qualified ABLE
program may distribute the balance of the
ABLE account to the successor designat-
ed beneficiary or, if none, to the deceased
designated beneficiary’s estate.
The 2015 proposed regulations re-
quired a qualified ABLE program to file an
annual information return on Form 1099-
QA, or any successor form, with respect to
each ABLE account from which any dis-
tribution is made during the calendar year,
on which is reported the aggregate amount
of distributions from the ABLE account
during the calendar year. One commenter
asked whether a qualified ABLE program
should report the payment of a Medicaid
reimbursement claim on Form 1099-QA.
The final regulations clarify that the term
“distribution” does not include a payment
in satisfaction of a Medicaid reimburse-
ment claim. Therefore, the payment is not
reported on Form 1099-QA.
7. Gift and Generation-Skipping Transfer
(GST) Taxes
The final regulations, like the 2015
proposed regulations, provide that contri-
butions to an ABLE account by a person
other than the designated beneficiary are
treated as completed gifts to the desig-
nated beneficiary of the account, and that
such gifts are neither gifts of a future in-
terest nor a qualified transfer under sec-
tion 2503(e). Accordingly, no distribution
from an ABLE account to the designated
beneficiary of that account is treated as a
taxable gift. Finally, consistent with sec-
tion 529A(c)(2)(C), neither gift nor GST
taxes apply to the change of designated
beneficiary of an ABLE account if the
new designated beneficiary is an eligible
individual who is a sibling of the former
designated beneficiary.

Bulletin No. 2020–50 1579 December 7, 2020
8. Unrelated Business Income Tax
A qualified ABLE program generally is
exempt from Federal income taxation. A
qualified ABLE program is subject, how-
ever, to the unrelated business income tax
imposed under section 511 on its unrelated
business taxable income. For purposes of
this tax, certain administrative and other
fees do not constitute unrelated business
taxable income to the ABLE program.
One commenter asked for clarification
regarding the definition and possible ap-
plication of the unrelated business income
tax.
Further guidance on the unrelated busi-
ness income tax provisions of the Code
already is set forth in the regulations
under sections 511 through 514. Those
rules generally are applicable to qualified
ABLE programs and other tax-exempt
entities. If any unrelated business income
tax liability exists, the tax is paid by the
qualified ABLE program. If it has any un-
related taxable income, a qualified ABLE
program is required to file Form 990-T,
“Exempt Organization Business Income
Tax Return,” as though it were an orga-
nization described in §§ 1.6012-2(e) and
1.6012-3(a)(5).
One commenter stated that the report-
ing requirements in the 2015 proposed
regulations are burdensome to ABLE
account holders, and recommended that
the final regulations eliminate the need
for any individual to file a Form 990-T.
Form 990-T is for the use of a qualified
ABLE program to report and pay tax on
its unrelated business taxable income un-
der section 512, if any, and is not for the
use of individuals such as the designated
beneficiaries of ABLE accounts.
9. Recordkeeping and Reporting
Requirements
As in the 2015 proposed regulations,
the final regulations set forth recordkeep-
ing and reporting requirements. A quali-
fied ABLE program must maintain records
that enable the program to account to the
Secretary with respect to all contributions,
distributions, returns of excess contri-
butions or additional accounts, income
earned, and account balances for any des-
ignated beneficiary’s ABLE account. In
addition, a qualified ABLE program must
report to the Secretary the establishment
of each ABLE account, including the
name, address, and TIN of the designat-
ed beneficiary, information regarding the
disability certification or other basis for
eligibility of the designated beneficiary,
and other relevant information regarding
each account. Information regarding con-
tributions is reported on Form 5498-QA,
“ABLE Account Contribution Informa-
tion.” Information regarding distributions
from ABLE accounts is reported on Form
1099-QA, “Distributions from ABLE Ac-
counts.” The final regulations and instruc-
tions to the Forms 1099-QA and 5498-QA
contain more detail on how the informa-
tion must be reported.
One commenter stated that the report-
ing requirements in the 2015 proposed reg-
ulations would increase the cost to quali-
fied ABLE programs of offering ABLE
accounts, and therefore recommended that
the final regulations eliminate the require-
ment to file Form 5498-QA. The Treasury
Department and the IRS note that Form
5498-QA is necessary to allow the qual-
ified ABLE program to provide the notice
of establishment of an ABLE account
required under section 529A(d)(3), to re-
port contributions to an ABLE account
required under section 529A(d)(1), and
to report other information necessary for
the public reports required under section
529A(d)(2). Because the statute requires
this reporting, the final regulations do not
incorporate this suggestion. Additionally,
the filing of Form 5498-QA satisfies cer-
tain statutory requirements regarding the
disability certification.
The 2015 proposed regulations pro-
vided that the qualified ABLE program is
required to furnish a statement to the des-
ignated beneficiary of the ABLE account
for which it is required to file a Form
5498-QA, which statement is required to
include, among other things, the name,
address, and TIN of the designated benefi-
ciary. One commenter recommended that
final regulations permit the exclusion of
the TIN of the designated beneficiary from
the statement required to be furnished to
the designated beneficiary. The Treasury
Department and the IRS confirm that a
qualified ABLE program may truncate the
TIN of the designated beneficiary (by re-
placing the first five digits of the 9-digit
number with asterisks or Xs) on the copy
of the Form 5498-QA (or substitute state-
ment) that is provided to the designated
beneficiary, but must include the full, un-
truncated TIN on the return it files with
the IRS. See the General Instructions for
Certain Information Returns.
In addition, section 529A(b)(3) requires
that a qualified ABLE program provide
separate accounting for each designated
beneficiary. Separate accounting requires
that contributions for the benefit of a des-
ignated beneficiary, as well as earnings
attributable to those contributions, are
allocated to that designated beneficiary’s
account. Whether or not a program ordi-
narily provides each designated beneficia-
ry an annual account statement showing
the income and transactions related to the
account, the program must give this infor-
mation to the designated beneficiary upon
request.
The preamble to the 2015 proposed
regulations stated that section 529A(d)
(4) provides that, for purposes of section
4 of the ABLE Act, States are required to
submit electronically to the Commissioner
of Social Security, on a monthly basis and
in the manner specified by the Commis-
sioner of Social Security, statements on
relevant distributions and account balanc-
es from all ABLE accounts. Commenters
remarked that such reporting requirements
may be unduly burdensome on qualified
ABLE programs, and will require desig-
nated beneficiaries of ABLE accounts to
justify all expenditures on a nearly con-
tinuous basis to the qualified ABLE pro-
gram. One commenter suggested that the
designated beneficiary self-certify, under
penalties of perjury, at the time of a dis-
tribution, that the distribution will be used
for (i) housing expenses, (ii) other quali-
fied disability expenses, or (iii) non-qual-
ifying expenses, which information the
qualified ABLE program could use to re-
port the designated beneficiary’s housing
expenses to the SSA. The final regulations
do not require that housing or other quali-
fied disability expenses be reported to the
IRS by either the designated beneficiary
or the ABLE program. The Treasury De-
partment and the IRS note that the report-
ing requirement in section 529A(d)(4)
concerns reporting by the qualified ABLE
program to the SSA, not to the IRS, and
thus is beyond the appropriate scope of
these regulations.

December 7, 2020 1580 Bulletin No. 2020–50
10. Transition Relief
Notice 2015-18 and the preamble to the
2015 proposed regulations stated that the
Treasury Department and the IRS intend
to provide transition relief to enable qual-
ified ABLE programs and ABLE accounts
established before the issuance of final
regulations to be brought into compliance
with the requirements of the final regu-
lations. One commenter asked that State
legislatures and qualified ABLE programs
be given a period of not less than one full
taxable year after the issuance of final
regulations to bring their legislation and
programs into full compliance with Fed-
eral standards. Another commenter asked
that the final regulations provide transition
relief to qualified ABLE programs that be-
gin operations within the six-month period
following the issuance of final regulations,
while still another asked that the relief be
provided for programs that launch during
the transition period.
The final regulations provide transition
relief for all qualified ABLE programs,
including programs that begin operation
after the publication of the final regula-
tions. The final regulations provide that,
generally, a program and each account es-
tablished under that program will be treat-
ed as a qualified ABLE program and as an
ABLE account, respectively, during the
transition period, provided that the pro-
gram is established and operated in accor-
dance with a reasonable, good faith inter-
pretation of section 529A. Establishment
and operation in accordance with the reg-
ulations under section 529A as proposed
in 80 FR 35602 and as supplemented by
Notice 2015-81, 2015-49 I.R.B. 784, and
84 FR 54529 is deemed to be establish-
ment and operation in accordance with a
reasonable, good faith interpretation of
section 529A. However, such a program
and all accounts established under that
program must meet the requirements of
these final regulations before the later of
November 21, 2022, or the first day of the
qualified ABLE program’s first taxable
year beginning after the close of the first
regular session of the State legislature that
begins after November 19, 2020. If a State
has a two-year legislative session, each
calendar year of the session is deemed to
be a separate regular session of the State
legislature.
One commenter expressed concern for
individuals who are eligible to establish an
ABLE account under the 2015 proposed
regulations but who later fail to meet the
eligibility criteria under the final regula-
tions. The commenter suggested that the
final regulations allow such individuals to
be “grandfathered” into a qualified ABLE
program provided the individual continues
to meet the eligibility requirements under
the 2015 proposed regulations. Because
the definition of an eligible individual and
the criteria for establishing satisfaction of
that definition has not been changed in the
final regulations, the Treasury Department
and the IRS do not adopt this suggestion.
11. Miscellaneous
Numerous comments were received
concerning programs administered by the
SSA or the Centers for Medicare & Med-
icaid Services (CMS). For example, sev-
eral of these comments requested confir-
mation that the provisions of section 103
of the ABLE Act, which exclude ABLE
accounts from the assets and income of
the designated beneficiary in determina-
tions of eligibility for certain public ben-
efits, continue to apply in certain specific
situations not addressed in the 2015 pro-
posed regulations. Because these are not
tax issues, the final regulations do not ad-
dress these and other comments regarding
matters that are outside of the jurisdiction
of the Treasury Department and the IRS.
The IRS, however, has shared these com-
ments with the SSA and the CMS.
A few other comments were received
regarding non-legal issues that are not
within the scope of these final regulations.
Several other minor changes were made
throughout the final regulations to in-
crease clarity and consistency and to com-
ply with Federal Register requirements,
none of which substantively change the
2015 or 2019 proposed regulations.
Special Analyses
This regulation is not subject to review
under section 6(b) of Executive Order
12866 pursuant to the Memorandum of
Agreement (April 11, 2018) between the
Department of the Treasury and the Office
of Management and Budget regarding re-
view of tax regulations.
1. Paperwork Reduction Act
The collection of information con-
tained in these final regulations has been
reviewed and approved by the Office of
Management and Budget in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. 3507(d)) under control
numbers 1545-2262 and 1545-2293. The
collections of information in this final
regulation are in §§ 1.529A-2, 1.529A-
5, 1.529A-6, and 1.529A-7. The collec-
tion of information flows from sections
529A(d)(1), (d)(2), (d)(3), (e)(1), and
(e)(2) of the Code. Section 529A(d)(1)
requires qualified ABLE programs to
provide reports to the Secretary and to
designated beneficiaries with respect to
contributions, distributions, the return of
excess contributions, and such other mat-
ters as the Secretary may require. Section
529A(d)(2) directs the Secretary to make
available to the public reports containing
aggregate information, by diagnosis and
other relevant characteristics, on contri-
butions and distributions from the qual-
ified ABLE program. Section 529A(d)
(3) requires qualified ABLE programs to
provide notice to the Secretary upon the
establishment of an ABLE account, con-
taining the name of the designated bene-
ficiary and such other information as the
Secretary may require. Section 529A(e)
(1) requires that a disability certification
with respect to certain individuals be filed
with the Secretary. Section 529A(e)(2)
provides that the disability certification
include a certification to the satisfaction
of the Secretary that the individual has a
described medically determinable phys-
ical or mental impairment that occurred
before the date on which the individual
attained age 26, as well as a copy of a
physician’s diagnosis. The burden under
§§ 1.529A-5, 1.529A-6, and 1.529A-
7 is reflected in the burden under Form
5498-QA, “ABLE Account Contribu-
tion Information,” and Form 1099-QA,
“Distributions from ABLE Accounts,”
respectively.
An agency may not conduct or sponsor,
and a person is not required to respond to,
a collection of information unless it dis-
plays a valid control number.
Books or records relating to a collec-
tion of information must be retained as
long as their contents may become mate-

Bulletin No. 2020–50 1581 December 7, 2020
rial in the administration of any internal
revenue law. Generally, tax returns and
return information are confidential, as re-
quired by 26 U.S.C. 6103.
2. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. chapter 6), it is hereby cer-
tified that the collection of information in
these regulations will not have a signif-
icant economic impact on a substantial
number of small entities. This certifica-
tion is based on the fact that these regu-
lations will not impact a substantial num-
ber of small entities. These regulations
primarily affect states and individuals
and therefore will not have a significant
economic impact on a substantial num-
ber of small entities. Pursuant to section
7805(f) of the Code, the NPRMs preced-
ing these regulations were submitted to
the Chief Counsel for the Office of Ad-
vocacy of the Small Business Adminis-
tration for comment on their impact on
small business. No comments were re-
ceived from the Chief Counsel for the
Office of Advocacy of the Small Busi-
ness Administration.
Drafting Information
The principal authors of these regu-
lations are Terri Harris and Julia Parnell
of the Office of Associate Chief Counsel
(Employee Benefits, Exempt Organiza-
tions, and Employment Taxes). However,
other personnel from the Treasury Depart-
ment and the IRS participated in the de-
velopment of these regulations.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record-
keeping requirements.
26 CFR Part 25
Gift taxes, Reporting and recordkeep-
ing requirements.
26 CFR Part 26
Estate taxes, Reporting and record-
keeping requirements.
26 CFR Part 301
Employment taxes, Estate taxes, Ex-
cise taxes, Gift taxes, Income taxes, Pen-
alties, Reporting and recordkeeping re-
quirements.
26 CFR Part 602
Reporting and recordkeeping require-
ments.
Amendments to the Regulations
Accordingly, 26 CFR parts 1, 25, 26,
301, and 602 are amended as follows:
PART 1—INCOME TAXES
Paragraph 1. The authority citation for
part 1 is amended by adding an entry for
§§ 1.529A-0 through 1.529A-8 in numeri-
cal order to read in part as follows:
Authority: 26 U.S.C. 7805, unless oth-
erwise noted.
* * * * *
Sections 1.529A-0 through 1.529A-8
also issued under 26 U.S.C. 529A(g).
* * * * *
Par. 2. Section 1.511-2 is amended by
adding paragraph (e) to read as follows:
§ 1.511-2 Organizations subject to tax.
* * * * *
(e) ABLE programs—(1) Unrelated
business taxable income. A qualified ABLE
program described in section 529A and §
1.529A-1(b)(14) generally is exempt from
Federal income taxation, but is subject to
taxes imposed by section 511 relating to
the imposition of tax on unrelated busi-
ness income. A qualified ABLE program is
required to file Form 990-T, “Exempt Or-
ganization Business Income Tax Return,”
if such filing would be required under the
rules of §§ 1.6012-2(e) and 1.6012-3(a)(5)
if the ABLE program were an organization
described in those sections.
(2) Applicability date. This paragraph
(e) applies to taxable years beginning after
December 31, 2020.
Par. 3. Section 1.513-1 is amended as
follows:
1. Redesignating the first full sentence
following the heading in paragraph
(d)(4)(i) as (d)(4)(i)(A);
2. Redesignating the second sentence in
paragraph (d)(4)(i) as (d)(4)(i)(B) in-
troductory text;
3. Adding a heading to newly designat-
ed paragraph (d)(4)(i)(A);
4. In newly designated paragraph (d)(4)
(i)(B), adding a heading and remov-
ing from the introductory text “princi-
ple” and adding “paragraph (d)(4)(i)”
in its place;
5. Redesignating undesignated Exam-
ples 1 through 3 following newly
designated paragraph (d)(4)(i)(B) in-
troductory text as paragraphs (d)(4)(i)
(B)(1) through (3); and
6. Adding paragraph (d)(4)(i)(B)(4).
The additions read as follows:
§ 1.513-1 Definition of unrelated trade
or business.
* * * * *
(d) * * *
(4) * * *
(i) * * *
(A) In general. * * *
(B) Examples. * * *
(4) Example 4. P is a qualified ABLE program
described in section 529A and § 1.529A-1(b)(14).
P receives amounts in order to establish or main-
tain ABLE accounts, as administrative or mainte-
nance fees and other similar fees including service
charges. Because the payment of these amounts is
essential to the operation of a qualified ABLE pro-
gram, the income generated from the activity does
not constitute gross income from an unrelated trade
or business.
* * * * *
Par. 4. An undesignated center heading
and §§ 1.529A-0 through 1.529A-8 are
added immediately following § 1.528-10
to read as follows:
Qualified able Programs
§ 1.529A-0 Table of contents.
§ 1.529A-1 Exempt status of qualified
ABLE program and definitions.
§ 1.529A-2 Qualified ABLE program.
§ 1.529A-3 Tax treatment.
§ 1.529A-4 Gift, estate, and genera-
tion-skipping transfer taxes.
§ 1.529A-5 Reporting of the establishment
of and contributions to an ABLE account.
§ 1.529A-6 Reporting of distributions
from and termination of an ABLE account.
§ 1.529A-7 Electronic furnishing of state-
ments to designated beneficiaries and con-
tributors.

December 7, 2020 1582 Bulletin No. 2020–50
§ 1.529A-8 Applicability dates and tran-
sition relief.
Qualified able Programs
§ 1.529A-0 Table of contents.
This section lists the following cap-
tions contained in §§ 1.529A-1 through
1.529A-8.
§ 1.529A-1 Exempt status of qualified
ABLE program and definitions.
(a) In general.
(b) Definitions.
(1) ABLE account.
(2) Contribution.
(3) Designated beneficiary.
(4) Disability certification.
(5) Distribution.
(6) Earnings.
(7) Earnings ratio.
(8) Eligible individual.
(9) Excess contribution.
(10) Excess aggregate contribution.
(11) Investment in the account.
(12) Member of the family.
(13) Program-to-program transfer.
(14) Qualified ABLE program.
(15) Qualified disability expenses.
(16) Rollover.
(c) Applicability date.
§ 1.529A-2 Qualified ABLE program.
(a) In general.
(b) Established and maintained by a
State or agency or instrumentality of a
State.
(1) Established.
(2) Maintained.
(i) In general.
(ii) Multiple States, agencies, or instru-
mentalities.
(3) Community Development Finan-
cial Institutions (CDFIs).
(c) Establishment of an ABLE account
and signature authority.
(1) Establishment of the ABLE ac-
count.
(2) Signature authority.
(3) Only one ABLE account.
(4) Beneficial interest.
(d) Eligible individual.
(1) Documentation.
(2) Frequency of recertification.
(3) Loss of qualification as an eligible
individual.
(e) Disability certification.
(1) In general.
(2) Marked and severe functional lim-
itations.
(3) Compassionate allowance list.
(4) Additional guidance.
(5) Restriction on use of certification.
(f) Change of designated beneficiary.
(1) In general.
(2) Change effective upon death.
(g) Contributions.
(1) Permissible property.
(2) Annual contributions limit.
(3) Cumulative limit.
(4) Return of excess contributions, ex-
cess compensation contributions, and ex-
cess aggregate contributions.
(5) Restriction of contributors.
(h) Qualified disability expenses.
(1) In general.
(2) Example.
(i) Separate accounting.
(j) Program-to-program transfers.
(k) Carryover of attributes.
(1) In general.
(2) Annual contribution limit.
(3) Investment direction limit.
(l) Investment direction.
(m) No pledging of interest as security.
(n) No sale or exchange.
(o) Post-death payments.
(p) Reporting requirements.
(q) Applicability date.
§ 1.529A-3 Tax treatment.
(a) Taxation of distributions.
(1) In general.
(2) Additional period.
(b) Additional exclusions from gross
income.
(1) Rollover.
(2) Program-to-program transfers.
(3) Change of designated beneficiary.
(4) Payments to creditors post-death.
(c) Computation of earnings.
(d) Additional tax on amounts includi-
ble in gross income.
(1) In general.
(2) Exceptions.
(e) Tax on excess contributions.
(f) Filing requirements.
(g) No inference outside section 529A.
(h) Applicability date.
§ 1.529A-4 Gift, estate, and generation-
skipping transfer taxes.
(a) Contributions.
(1) In general.
(2) Generation-skipping transfer (GST)
tax.
(3) Designated beneficiary as contrib-
utor.
(b) Distributions.
(c) Transfer to another designated ben-
eficiary.
(d) Transfer tax on death of designated
beneficiary.
(e) Applicability date.
§ 1.529A-5 Reporting of the
establishment of and contributions to an
ABLE account.
(a) In general.
(b) Additional definitions.
(1) Filer.
(2) TIN.
(c) Requirement to file return.
(1) Form of return.
(2) Information included on return.
(3) Time and manner of filing return.
(d) Requirement to furnish statement.
(1) In general.
(2) Time and manner of furnishing
statement.
(3) Copy of Form 5498-QA.
(e) Request for TIN of designated ben-
eficiary.
(f) Penalties.
(1) Failure to file return.
(2) Failure to furnish TIN.
(g) Applicability date.
§ 1.529A-6 Reporting of distributions
from and termination of an ABLE
account.
(a) In general.
(b) Requirement to file return.
(1) Form of return.
(2) Information included on return.
(3) Information excluded.
(4) Time and manner of filing return.
(c) Requirement to furnish statement.
(1) In general.
(2) Time and manner of furnishing
statement.
(3) Copy of Form 1099-QA.
(d) Request for TIN of contributor(s).
(1) In general.

Bulletin No. 2020–50 1583 December 7, 2020
(2) Exception.
(e) Penalties.
(1) Failure to file return.
(2) Failure to furnish TIN.
(f) Applicability date.
§ 1.529A-7 Electronic furnishing of
statements to designated beneficiaries
and contributors.
(a) Electronic furnishing of statements.
(1) In general.
(2) Consent.
(3) Required disclosures.
(4) Format.
(5) Notice.
(6) Access period.
(b) Applicability date.
§ 1.529A-8 Applicability dates and
transition relief.
(a) Applicability dates.
(b)Transition relief.
(1) In general.
(2) Transition period.
(3) Compliance after transition period.
§ 1.529A-1 Exempt status of qualified
ABLE program and definitions.
(a) In general. A qualified ABLE pro-
gram described in section 529A is exempt
from Federal income tax, except for the
tax imposed under section 511 on any
unrelated business taxable income of that
program. See § 1.511-2(e).
(b) Definitions. For purposes of sec-
tion 529A, this section and §§ 1.529A-2
through 1.529A-8—
(1) ABLE account means an account
established under a qualified ABLE pro-
gram and owned by the designated benefi-
ciary of that account.
(2) Contribution means any payment
directly allocated to an ABLE account for
the benefit of a designated beneficiary, in-
cluding amounts transferred to an ABLE
account between December 22, 2017, and
January 1, 2026, from a qualified tuition
program described in section 529.
(3) Designated beneficiary means the
individual for whom the account was es-
tablished at a time when he or she was an
eligible individual or who has succeeded
the former designated beneficiary in that
capacity (successor designated benefi-
ciary). The designated beneficiary is the
owner of the ABLE account. If the des-
ignated beneficiary is not able to exercise
signature authority over his or her ABLE
account or chooses to have an ABLE ac-
count established but not to exercise sig-
nature authority, references to the desig-
nated beneficiary with respect to his or her
actions include actions by the person with
signature authority over the account. See §
1.529A-2(c)(1) and (2).
(4) Disability certification means a
certification to establish a certain level
of an individual’s physical or mental im-
pairment that meets the requirements de-
scribed in § 1.529A-2(e).
(5) Distribution means any payment
from an ABLE account. However, a pro-
gram-to-program transfer, a Medicaid
reimbursement under § 1.529A-2(o), or a
payment of administrative or investment
fees charged by a qualified ABLE pro-
gram is not a distribution.
(6) Earnings attributable to an ABLE
account are the excess of the total account
balance on a particular date over the in-
vestment in the account as of that date.
(7) Earnings ratio as applied to a par-
ticular distribution means the amount of
earnings attributable to the ABLE account
as of the date of the distribution, divided
by the total account balance on that same
date.
(8) Eligible individual for a taxable
year means an individual who either:
(i) Is receiving benefits under title II
or XVI of the Social Security Act based
on blindness or disability or whose enti-
tlement to such benefits under title XVI
has been suspended solely due to excess
income or resources, provided that such
blindness or disability occurred before the
date on which the individual attained age
26 (and, for this purpose, an individual is
deemed to attain age 26 on his or her 26th
birthday); or
(ii) Is the subject of a disability certifi-
cation filed with the Secretary of the Trea-
sury or his delegate (Secretary) for that
taxable year.
(9) Excess contribution means the
amount by which the amount contributed
during the taxable year of the designated
beneficiary to an ABLE account exceeds
the limit in effect under section 2503(b)
for the calendar year in which the taxable
year of the designated beneficiary begins.
(10) Excess aggregate contribution
means—
(i) The amount contributed during the
taxable year of the designated beneficiary
that causes the total of amounts contrib-
uted since the establishment of the ABLE
account (or of an ABLE account for the
same designated beneficiary that was
rolled into the current ABLE account) to
exceed the limit in effect under section
529(b)(6); or
(ii) In the context of the safe harbor in
§ 1.529A-2(g)(3), the amount contributed
that causes the account balance to exceed
the limit in effect under section 529(b)(6).
(11) Investment in the account means—
(i) The sum of all contributions made
to the ABLE account, reduced by the ag-
gregate amount of contributions included
in distributions, if any, made from the ac-
count; or
(ii) In the case of a rollover contribu-
tion into an ABLE account, the amount
of the rollover contribution that constitut-
ed the amount described in paragraph (b)
(11)(i) of this section with respect to the
ABLE account from which the rollover
contribution was made.
(12) Member of the family means a
sibling, whether by blood or by adoption,
and includes a brother, sister, stepbrother,
stepsister, half-brother, and half-sister.
(13) Program-to-program transfer
means—
(i) The direct transfer of the entire bal-
ance of an ABLE account into an ABLE
account of the same designated benefi-
ciary after which the transferor ABLE
account is closed upon completion of the
transfer; or
(ii) The direct transfer of part or all of
the balance to an ABLE account of anoth-
er eligible individual who is a member of
the family of the former designated ben-
eficiary.
(14) Qualified ABLE program means
a program established and maintained by
a State, or agency or instrumentality of a
State, under which an ABLE account may
be established by and for the benefit of the
account’s designated beneficiary who is
an eligible individual, and that meets the
requirements described in § 1.529A-2.
(15) Qualified disability expenses
means any expenses incurred at a time
when the designated beneficiary is an eli-
gible individual that relate to the blindness

December 7, 2020 1584 Bulletin No. 2020–50
or disability of the designated beneficiary
of an ABLE account, including expenses
that are for the benefit of the designated
beneficiary in maintaining or improving
his or her health, independence, or quality
of life. See § 1.529A-2(h). However, any
expenses incurred at a time when a des-
ignated beneficiary is neither disabled nor
blind within the meaning of § 1.529A-1(b)
(8)(i) or § 1.529A-2(e)(1)(i), even if the
designated beneficiary is an eligible indi-
vidual for that entire taxable year, do not
relate to blindness or disability and there-
fore are not qualified disability expenses.
(16) Rollover means a contribution to
an ABLE account of a designated benefi-
ciary (or of an eligible individual who is
a member of the family of the designat-
ed beneficiary) of all or a portion of an
amount distributed from the designated
beneficiary’s ABLE account, provided the
contribution is made within 60 days of the
date of the withdrawal and, in the case of
a rollover to the designated beneficiary’s
ABLE account, no rollover has been made
to an ABLE account of the designated
beneficiary within the 12 month period
immediately preceding the rollover to the
ABLE account.
(c) Applicability date. This section ap-
plies to calendar years beginning on or
after January 1, 2021. See § 1.529A-8 for
the provision of transition relief.
§ 1.529A-2 Qualified ABLE program.
(a) In general. A qualified ABLE pro-
gram is a program established and main-
tained by a State, or an agency or instru-
mentality of a State, that satisfies all of
the requirements of this section and under
which—
(1) An ABLE account may be estab-
lished for the purpose of meeting the qual-
ified disability expenses of the designated
beneficiary of the account;
(2) A designated beneficiary is limited
to only one ABLE account at a time ex-
cept as otherwise provided in paragraph
(c)(3) of this section;
(3) Any person may make contribu-
tions to such an ABLE account, subject to
the limitations described in paragraph (g)
of this section; and
(4) Distributions (other than returns of
contributions as described in paragraph
(g)(4) of this section) may be made only
to or for the benefit of the designated ben-
eficiary of the ABLE account.
(b) Established and maintained by a
State or agency or instrumentality of a
State—(1) Established. A program is es-
tablished by a State or its agency or in-
strumentality if the program is initiated by
State statute or regulation or by an act of a
State official or agency with the authority
to act on behalf of the State.
(2) Maintained—(i) In general. A pro-
gram is maintained by a State or an agen-
cy or instrumentality of a State if—
(A) The State or its agency or instru-
mentality sets all of the terms and con-
ditions of the program, including but not
limited to who may contribute to the pro-
gram, who may be a designated beneficia-
ry of the program, and what benefits the
program may provide; and
(B) The State or its agency or instru-
mentality is actively involved on an on-
going basis in the administration of the
program, including supervising the im-
plementation of decisions relating to the
investment of assets contributed under
the program. Factors that are relevant in
determining whether a State or its agency
or instrumentality is actively involved in
the administration of the program include,
but are not limited to: whether the State or
its agency or instrumentality provides ser-
vices to designated beneficiaries that are
not provided to persons who are not des-
ignated beneficiaries; whether the State or
its agency or instrumentality establishes
detailed operating rules for administer-
ing the program; whether officials of the
State or its agency or instrumentality play
a substantial role in the operation of the
program, including selecting, supervising,
monitoring, auditing, and terminating the
relationship with any private contractors
that provide services under the program;
whether the State or its agency or instru-
mentality holds the private contractors
that provide services under the program
to the same standards and requirements
that apply when private contractors han-
dle funds that belong to the State or its
agency or instrumentality or provide ser-
vices to the State or its agency or instru-
mentality; whether the State or its agency
or instrumentality provides funding for
the program; and whether the State or its
agency or instrumentality acts as trustee
or holds program assets directly or for the
benefit of the designated beneficiaries. For
example, if the State or its agency or in-
strumentality exercises the same authority
over the funds invested in the program as
it does over the investments in or pool of
funds of a State employees’ defined bene-
fit pension plan, then the State or its agen-
cy or instrumentality will be considered
actively involved on an ongoing basis in
the administration of the program.
(ii) Multiple States, agencies, or instru-
mentalities. A program may be maintained
by two or more States or the agencies or
instrumentalities of two or more States
if the program meets the requirements of
paragraph (b)(2)(i) of this section for each
of the States represented. If a State or an
agency or instrumentality of a State par-
ticipates in such a consortium of States or
agencies or instrumentalities of States, the
consortium’s program is considered to be
the program of each State represented.
(3) Community Development Financial
Institutions (CDFIs). In addition to having
the ability to contract with private contrac-
tors as provided in paragraph (b)(2)(i)(B)
of this section, a State or its agency or in-
strumentality or qualified ABLE program
may contract with one or more Commu-
nity Development Financial Institutions
(CDFIs) (as defined in 12 U.S.C. 4702(5)
and 12 CFR 1805.104) to perform some or
all of the services described in paragraphs
(b)(2)(i)(A) and (B) of this section.
(c) Establishment of an ABLE account
and signature authority—(1) Establish-
ment of the ABLE account—(i) In general.
A qualified ABLE program must provide
that an ABLE account may be established
only for an eligible individual.
(A) The ABLE account may be estab-
lished by the eligible individual;
(B) The ABLE account may be estab-
lished by a person selected by the eligible
individual; or
(C) If an eligible individual (whether a
minor or adult) is unable to establish his
or her own ABLE account, an ABLE ac-
count may be established on behalf of the
eligible individual by the eligible individ-
ual’s agent under a power of attorney or,
if none, by a conservator or legal guard-
ian, spouse, parent, sibling, grandparent of
the eligible individual, or a representative
payee appointed for the eligible individ-
ual by the Social Security Administration
(SSA), in that order.

Bulletin No. 2020–50 1585 December 7, 2020
(ii) Authority. A qualified ABLE pro-
gram may accept a certification, made un-
der penalties of perjury, from the person
seeking to establish an ABLE account as
to the basis for the person’s authority to
establish the ABLE account, and that there
is no other person with a higher priority,
under paragraphs (c)(1)(i)(A), (B), and
(C) of this section, to establish the ABLE
account.
(2) Signature authority—(i) Signatory.
In general, the designated beneficiary will
have signature authority over his or her
ABLE account. However, if an individual
other than the designated beneficiary es-
tablishes the account in accordance with
paragraph (c)(1)(i)(B) or (C) of this sec-
tion, such individual will have signature
authority.
(A) At any time, the designated benefi-
ciary may remove and replace any person
with signature authority over the desig-
nated beneficiary’s ABLE account. The
replacement may be the designated bene-
ficiary or any other person selected by the
designated beneficiary.
(B) The designated beneficiary may
designate a successor to the person with
signature authority. In the absence of any
designation of a successor by the desig-
nated beneficiary, a person with signature
authority over the designated beneficiary’s
ABLE account may designate a successor,
consistent with the ordering rules in para-
graph (c)(1)(i)(C) of this section.
(ii) Co-signatories. A qualified ABLE
program may permit an ABLE account
to have co-signatories, consistent with
paragraph (c)(1)(i)(C) of this section. If
co-signatories are permitted, all of the
other provisions of this paragraph (c)(2)
continue to apply, and references to the
signatory refer to the co-signatories acting
separately or jointly, as determined by that
qualified ABLE program.
(iii) Authority over sub-accounts. The
person with signature authority over the
ABLE account may appoint and from time
to time may remove, replace, or name a
successor for any person with signature
authority over a sub-account described in
paragraph (c)(3)(iii) of this section.
(3) Only one ABLE account—(i) In
general. Except as provided in paragraph
(c)(3)(ii) of this section, a designated ben-
eficiary is limited to one ABLE account
at a time, regardless of where located. To
ensure that this requirement is met, a qual-
ified ABLE program must obtain a verifi-
cation, signed under penalties of perjury
by the person establishing the ABLE ac-
count, that the individual establishing the
ABLE account neither knows nor has rea-
son to know that the eligible individual al-
ready has an existing ABLE account (other
than an ABLE account that will terminate
with the rollover or program-to-program
transfer of its assets into the new ABLE
account) before that program can permit
the establishment of an ABLE account
for that eligible individual. In the case of
a rollover, the ABLE account from which
amounts were distributed must be closed
as of the 60th day after the date of the
distribution in order to allow the account
receiving the rollover to be treated as an
ABLE account.
(ii) Treatment of additional accounts.
If an individual is the designated benefi-
ciary of an ABLE account established in
accordance with paragraph (c)(1) of this
section, no other account subsequently es-
tablished for that individual under a qual-
ified ABLE program (additional account)
will be an ABLE account. The preceding
sentence does not apply to an additional
account, and that additional account is an
ABLE account, if—
(A) The additional account is estab-
lished for the purpose of receiving a roll-
over or program-to-program transfer;
(B) All of the contributions to the addi-
tional account are returned in accordance
with the rules that apply to the return of
excess contributions and excess aggregate
contributions under paragraph (g)(4) of
this section; or
(C) All amounts in the additional ac-
count are transferred to the designated
beneficiary’s preexisting ABLE account
and any excess contributions and excess
aggregate contributions are returned in ac-
cordance with the rules that apply to the
return of excess contributions and excess
aggregate contributions under paragraph
(g)(4) of this section.
(iii) Sub-accounts. A qualified ABLE
program may establish an ABLE account
(primary account) that may include mul-
tiple sub-accounts. The person with sig-
nature authority over the ABLE account,
at any time and from time to time, may
create one or more sub-accounts, may
transfer funds in the ABLE account to
one or more of the sub-accounts, and may
close one or more of the sub-accounts, to
facilitate the acquisition of certain goods
or services for the designated beneficia-
ry. Each sub-account may have a differ-
ent person with signature authority over
that sub-account, appointed in accordance
with the rules of paragraph (c)(2)(iii) of
this section, and that person’s authority is
limited to making distributions from that
sub-account. The primary account and
the sub-accounts collectively constitute a
single ABLE account and therefore must
be aggregated for all purposes, including
without limitation the limit on the number
of permissible changes in investment di-
rection under paragraph (l) of this section,
the contribution limits under paragraphs
(g)(2) and (3) of this section, the computa-
tion of gross income and other tax provi-
sions, and the reporting requirements.
(iv) Investment options. A qualified
ABLE program may offer different invest-
ment options within each ABLE account
without violating the only-one-ABLE-
account rule in this paragraph (c)(3). For
example, an ABLE account may include a
cash fund as well as one or more stock or
bond funds.
(4) Beneficial interest. A person other
than the designated beneficiary with sig-
nature authority over the ABLE account
of the designated beneficiary may neither
have nor acquire any beneficial interest in
the ABLE account during the lifetime of
the designated beneficiary and must ad-
minister the ABLE account for the benefit
of the designated beneficiary of the ac-
count.
(d) Eligible individual—(1) Docu-
mentation—(i) In general. Whether an
individual is an eligible individual is de-
termined for each taxable year of that indi-
vidual, and that determination applies for
the entire year. A qualified ABLE program
must specify the documentation that an in-
dividual must provide, both at the time an
ABLE account is established and thereaf-
ter, in order to ensure that the designated
beneficiary of the ABLE account is, and
continues to be, determined an eligible
individual. For purposes of determining
whether an individual is an eligible in-
dividual, a disability certification as de-
scribed in paragraph (e)(1) of this section
will be deemed to be filed with the Secre-
tary once the qualified ABLE program has

December 7, 2020 1586 Bulletin No. 2020–50
received the disability certification or a
disability certification has been deemed to
have been received under the rules of the
qualified ABLE program, which informa-
tion the qualified ABLE program will file
in accordance with the filing requirements
under § 1.529A-5(c)(2)(iv).
(ii) Safe harbor. A qualified ABLE pro-
gram may establish that an individual is
an eligible individual if the person estab-
lishing the ABLE account certifies under
penalties of perjury—
(A) The basis for the individual’s sta-
tus as an eligible individual (entitlement
to benefits based on blindness or disability
under title II or XVI of the Social Security
Act, or a disability certification described
in paragraph (e)(1) of this section);
(B) That the individual is blind or has a
medically determinable physical or men-
tal impairment as described in paragraph
(e)(1)(i) of this section;
(C) That such blindness or disability
occurred before the date on which the in-
dividual attained age 26 (and, for this pur-
pose, an individual is deemed to attain age
26 on his or her 26th birthday);
(D) If the basis of the individual’s el-
igibility is a disability certification, that
the individual has received and agrees to
retain a written diagnosis as described in
paragraph (e)(1)(iii) of this section, ac-
companied by the name and address of the
diagnosing physician and the date of the
written diagnosis;
(E) The applicable diagnostic code
from those listed on Form 5498-QA (or in
the instructions to such form) identifying
the type of the individual’s impairment;
(F) That the person establishing the
account is the individual who will be the
designated beneficiary of the account or
is the person authorized under paragraph
(c)(1)(i) of this section to establish the ac-
count; and
(G) If required by the qualified ABLE
program, the information provided by the
diagnosing physician as to the categori-
zation of the disability that may be used
to determine, under the particular State’s
program, the appropriate frequency of re-
quired recertifications.
(2) Frequency of recertification—(i)
In general. A determination of eligibility
must be made annually unless the qualified
ABLE program adopts a different meth-
od of ensuring a designated beneficiary’s
continuing status as an eligible individual.
Alternative methods may include, without
limitation, the use of certifications by the
designated beneficiary under penalties of
perjury, and the imposition of different
recertification frequencies for different
types of impairments.
(ii) Considerations. In developing its
rules on recertification, a qualified ABLE
program may take into consideration
whether an impairment is incurable and,
if so, the likelihood that a cure may be
found in the future. For example, a quali-
fied ABLE program may provide that the
initial certification will be deemed to be
valid for a stated number of years, which
may vary with the type of impairment.
Even if the qualified ABLE program im-
poses an enforceable obligation on the
designated beneficiary or other person
with signature authority over the ABLE
account to promptly report changes in
the designated beneficiary’s condition
that would result in the designated ben-
eficiary’s failing to satisfy the definition
of an eligible individual, the designated
beneficiary will be considered an eligi-
ble individual until the end of the tax-
able year in which the change in the
designated beneficiary’s condition oc-
curred. A qualified ABLE program that
is compliant with the rules regarding re-
certification will not be considered to be
noncompliant solely because a designat-
ed beneficiary fails to comply with this
enforceable obligation.
(3) Loss of qualification as an eligible
individual. If the designated beneficiary
of an ABLE account ceases to be an el-
igible individual, then for each taxable
year in which the designated beneficiary
is not an eligible individual, the account
will continue to be an ABLE account, the
designated beneficiary will continue to be
the designated beneficiary of the ABLE
account (and will be referred to as such),
and the ABLE account will not be deemed
to have been distributed. However, be-
ginning on the first day of the designated
beneficiary’s first taxable year for which
the designated beneficiary does not satis-
fy the definition of an eligible individual,
additional contributions to the designated
beneficiary’s ABLE account must not be
accepted by the qualified ABLE program.
In addition, no expense incurred at a time
when a designated beneficiary is neither
disabled nor blind within the meaning of §
1.529A-1(b)(8)(i) or § 1.529A-2(e)(1)(i),
whichever had applied, is a qualified dis-
ability expense even if the individual is an
eligible individual for the rest of the year
under paragraph (d)(1)(i) of this section.
If the designated beneficiary subsequently
again satisfies the definition of an eligible
individual, contributions to the designat-
ed beneficiary’s ABLE account again may
be accepted, subject to the contribution
limits under section 529A, and expenses
that are incurred thereafter may meet the
definition of a qualified disability expense
in § 1.529A-1(b)(15) and paragraph (h) of
this section.
(e) Disability certification—(1) In gen-
eral. Except as provided in paragraph (e)
(3) of this section or in additional guid-
ance described in paragraph (e)(4) of this
section, a disability certification with re-
spect to an individual, that will be deemed
filed with the Secretary as provided in
paragraph (d)(1)(i) of this section, and is
deemed satisfactory to the Secretary, is a
certification signed under penalties of per-
jury by the individual, or by another indi-
vidual establishing the ABLE account for
the individual, that—
(i) Certifies that the individual—
(A) Has a medically determinable
physical or mental impairment that results
in marked and severe functional limita-
tions (as defined in paragraph (e)(2) of this
section), and that—
(1) Can be expected to result in death;
or
(2) Has lasted or can be expected to last
for a continuous period of not less than 12
months; or
(B) Is blind (within the meaning of
section 1614(a)(2) of the Social Security
Act);
(ii) Certifies that such blindness or dis-
ability occurred before the date on which
the individual attained age 26 (and, for
this purpose, an individual is deemed to
attain age 26 on his or her 26th birthday);
and
(iii) Includes a certification that the in-
dividual has obtained and will continue
to retain a copy of the individual’s diag-
nosis relating to the individual’s relevant
impairment or impairments, signed by a
physician meeting the criteria of section
1861(r)(1) of the Social Security Act (42
U.S.C. 1395x(r)) and including the name

Bulletin No. 2020–50 1587 December 7, 2020
and address of the diagnosing physician
and the date of the diagnosis.
(2) Marked and severe functional lim-
itations. For purposes of paragraph (e)
(1) of this section, the phrase marked
and severe functional limitations means
the standard of disability in the Social
Security Act for children claiming Sup-
plemental Security Income for the Aged,
Blind, and Disabled (SSI) benefits based
on disability (see 20 CFR 416.906), but
without regard to age or to whether the
individual engages in substantial gain-
ful activity. Specifically, this is a level
of severity that meets, medically equals,
or functionally equals the severity of
any listing in appendix 1 of subpart P of
20 CFR part 404. See 20 CFR 416.906,
416.924 and 416.926a. Such phrase also
includes any impairment or standard of
disability identified in future guidance
published in the Internal Revenue Bulle-
tin (see § 601.601(d)(2) of this chapter).
Consistent with the regulations promul-
gated by the SSA, the level of severity
is determined by taking into account the
effect of the individual’s prescribed treat-
ment. See 20 CFR 416.930.
(3) Compassionate allowance list.
Conditions listed in the “List of Compas-
sionate Allowances Conditions” main-
tained by the SSA are deemed to meet the
requirements of section 529A(e)(1)(B)
regarding the filing of a disability certi-
fication, if the condition was present and
produced marked and severe functional
limitations before the date on which the
individual attained age 26. To establish
that an individual with such a condition
satisfies the definition of an eligible in-
dividual, the individual must identify
the condition and certify to the qualified
ABLE program both the presence of the
condition and its resulting marked and
severe functional limitations prior to age
26, in a manner specified by the qualified
ABLE program.
(4) Additional guidance. Additional
guidance on conditions deemed to meet
the requirements of section 529A(e)(1)(B)
may be identified in future guidance pub-
lished in the Internal Revenue Bulletin.
See § 601.601(d)(2) of this chapter.
(5) Restriction on use of certification.
No inference may be drawn from a dis-
ability certification described in this para-
graph (e) for purposes of establishing eli-
gibility for benefits under title II, XVI, or
XIX of the Social Security Act.
(f) Change of designated beneficiary—
(1) In general. A qualified ABLE program
must permit a change in the designated
beneficiary of an ABLE account made
during the life of the designated bene-
ficiary. At the time when the change be-
comes effective, the successor designated
beneficiary must be an eligible individual.
However, a qualified ABLE program may
limit the change in designated beneficiary
to a member of the family as defined in §
1.529A-1(b)(12) of the current designated
beneficiary.
(2) Change effective upon death. A
qualified ABLE program may permit a
change in the designated beneficiary of an
ABLE account, made during the life of the
designated beneficiary, to take effect upon
the death of the designated beneficiary.
The amount to be transferred pursuant
to such a beneficiary designation is first
subject to the payment of any qualified
disability expenses incurred before the
designated beneficiary’s death but not yet
paid and those described in paragraph (o)
of this section, and is subject to the provi-
sions of § 1.529A-4.
(g) Contributions—(1) Permissible
property. Except in the case of a pro-
gram-to-program transfer or a change in
designated beneficiary to a new designat-
ed beneficiary who is an eligible individ-
ual and a member of the family of the for-
mer designated beneficiary, contributions
to an ABLE account may be made only
in cash. A qualified ABLE program may
allow cash contributions to be made in
the form of a check, money order, credit
card, electronic transfer, after-tax payroll
deduction, or similar method.
(2) Annual contributions limit—(i) In
general. Except as provided in paragraph
(g)(2)(ii) of this section, a qualified ABLE
program must provide that no contribution
to an ABLE account will be accepted to
the extent such contribution, when added
to all other contributions (whether from
the designated beneficiary or one or more
other persons) to that ABLE account made
during the designated beneficiary’s taxable
year causes the total of such contributions
during that year to exceed the amount in
effect under section 2503(b) for the cal-
endar year in which the designated benefi-
ciary’s taxable year begins. See paragraph
(k)(2) of this section for purposes of ap-
plying the rules in this paragraph (g)(2) to
rollovers, program-to-program transfers,
and designated beneficiary changes.
(ii) Additional contributions by an em-
ployed designated beneficiary—(A) In
general. An employed designated benefi-
ciary defined in paragraph (g)(2)(iii)(A)
of this section may contribute amounts
up to the limit specified in paragraph (g)
(2)(ii)(B) of this section in addition to the
amount specified in paragraph (g)(2)(i) of
this section. Although a designated bene-
ficiary’s contributions subject to this com-
pensation income limit do not have to be
made from that compensation income, any
contribution of the designated beneficia-
ry’s compensation income made directly
by the designated beneficiary’s employer
is a contribution made by the designated
beneficiary. Once the designated benefi-
ciary has made contributions equal to the
limit described in paragraph (g)(2)(ii)(B)
of this section, additional contributions by
the designated beneficiary may be made if
permissible under paragraph (g)(2)(i) of
this section.
(B) Amount of additional permissible
contribution. Any additional contribution
made by the designated beneficiary pursu-
ant to paragraph (g)(2)(ii)(A) of this sec-
tion is limited to the lesser of—
(1) The designated beneficiary’s com-
pensation as defined by section 219(f)(1)
for the taxable year; or
(2) An amount equal to the applicable
poverty line, as defined in paragraph (g)
(2)(iii)(B) of this section, for a one-person
household for the calendar year preceding
the calendar year in which the designated
beneficiary’s taxable year begins.
(iii) Additional definitions. In addition
to the definitions in § 1.529A-1(b), the
following definitions also apply for the
purposes of this section—
(A) Employed designated beneficiary
means a designated beneficiary who is an
employee (including an employee within
the meaning of section 401(c)), with re-
spect to whom no contribution is made for
the taxable year to—
(1) A defined contribution plan (with-
in the meaning of section 414(i)) with
respect to which the requirements of sec-
tions 401(a) or 403(a) are met;
(2) An annuity contract described in
section 403(b); and

December 7, 2020 1588 Bulletin No. 2020–50
(3) An eligible deferred compensation
plan described in section 457(b).
(B) Applicable poverty line means the
amount provided in the poverty guidelines
updated periodically in the Federal Regis-
ter by the U.S. Department of Health and
Human Services under the authority of 42
U.S.C. 9902(2) for the State of residence
of the employed designated beneficiary. If
the designated beneficiary lives in more
than one State during the taxable year, the
applicable poverty line is the poverty line
for the State in which the designated ben-
eficiary resided longer than in any other
State during that year.
(C) Excess compensation contribution
means the amount by which the amount
contributed during the taxable year of
an employed designated beneficiary to
the designated beneficiary’s ABLE ac-
count exceeds the limit in effect under
section 529A(b)(2)(B)(ii) and paragraph
(g)(2)(ii)(B) of this section for the calen-
dar year in which the taxable year of the
employed designated beneficiary begins.
(iv) Example. The provisions of
paragraph (g)(2)(ii) of this section may be
illustrated by the following example: In
2020, A, an employed designated benefi-
ciary as defined in paragraph (g)(2)(iii)(A)
of this section, lives in Hawaii. A’s com-
pensation, as defined by section 219(f)(1),
for 2020 is $20,000. The poverty line for
a one-person household in Hawaii was
$14,380 in 2019. Because A’s compensa-
tion exceeded the applicable poverty line
amount, A’s additional permissible contri-
bution in 2019 is limited to $14,380, the
amount of the 2019 applicable poverty
line.
(v) Ensuring contribution limit is
met—(A) Responsibility. The employed
designated beneficiary, or the person act-
ing on his or her behalf, is solely respon-
sible for ensuring that the requirements in
section 529A(b)(2)(B)(ii) and paragraph
(g)(2)(ii) of this section are met and for
maintaining adequate records for that pur-
pose.
(B) Certification. A qualified ABLE
program may allow a designated benefi-
ciary (or the person acting on his or her
behalf) to certify, under penalties of per-
jury, and in the manner specified by the
qualified ABLE program that—
(1) The designated beneficiary is an
employed designated beneficiary; and
(2) The designated beneficiary’s con-
tributions of compensation are not excess
compensation contributions.
(3) Cumulative limit—(i) In general.
A qualified ABLE program must provide
adequate safeguards to prevent aggre-
gate contributions on behalf of a desig-
nated beneficiary in excess of the limit
established by that State under section
529(b)(6). For purposes of the preceding
sentence, aggregate contributions on be-
half of a designated beneficiary include
contributions to any prior ABLE account
maintained by any State or its agency or
instrumentality for the same designat-
ed beneficiary, or any former designated
beneficiary to the extent his or her ABLE
account funds were transferred to the
designated beneficiary’s ABLE account.
The transfer of a designated beneficiary’s
ABLE account from one qualified ABLE
program to another with a lower cumu-
lative limit will not violate this rule, but
qualified ABLE programs must prohibit
subsequent contributions under this gen-
eral rule. For purposes of this paragraph
(g)(3), contributions do not include roll-
overs, program-to-program transfers or a
designated beneficiary change to a new
designated beneficiary who is an eligible
individual and member of the family of
the former designated beneficiary as de-
fined in § 1.529A-1(b)(12).
(ii) Safe harbor. A qualified ABLE pro-
gram maintained by a State or its agency
or instrumentality satisfies the require-
ment under section 529A(b)(6) if it refus-
es to accept any additional contribution to
an ABLE account (except as provided to
the contrary in paragraph (g)(3)(i) of this
section) while the balance in that account
equals or exceeds the limit established by
that State under section 529(b)(6). Never-
theless, without regard to the categories of
transfers that caused the account balance
to exceed the State limit, once the account
balance falls below that limit, additional
contributions, subject to the annual con-
tributions limit under paragraph (g)(2) of
this section and the limit established by
such State under section 529(b)(6), again
may be accepted.
(4) Return of excess contributions, ex-
cess compensation contributions, and ex-
cess aggregate contributions. If an excess
contribution as defined in § 1.529A-1(b)
(9), an excess compensation contribution
as defined in paragraph (g)(2)(iii)(C) of
this section, or an excess aggregate con-
tribution as defined in § 1.529A-1(b)(10)
is deposited into or allocated to the ABLE
account of a designated beneficiary, a
qualified ABLE program must return that
excess contribution, excess compensation
contribution, or excess aggregate contribu-
tion, including all net income attributable
to that contribution, as determined under
the rules set forth in § 1.408-11 (treating
references to an IRA as references to an
ABLE account and references to returned
contributions under section 408(d)(4)
as references to excess contributions or
excess aggregate contributions), to the
person or persons who made that contri-
bution. Each excess contribution, excess
compensation contribution, and excess
aggregate contribution must be returned
to its contributor(s) on a last-in-first-out
basis until the entire excess, along with
all net income attributable to such excess,
has been returned. In the case of an excess
compensation contribution, the employed
designated beneficiary, or the person act-
ing on the employed designated beneficia-
ry’s behalf, is responsible for identifying
any excess compensation contribution
and for requesting the return of the ex-
cess compensation contribution. Returned
contributions must be received by the con-
tributor(s) on or before the due date (in-
cluding extensions) of the Federal income
tax return of the designated beneficiary for
the taxable year in which the excess con-
tribution or excess aggregate contribution
was made. See § 1.529A-3(a) for Federal
income tax considerations for the contrib-
utor(s). If an excess contribution or excess
aggregate contribution and the net income
attributable to the excess contribution or
excess aggregate contribution are returned
to a contributor other than the designated
beneficiary, the qualified ABLE program
must notify the designated beneficiary of
such return at the time of the return. No
notification is required if amounts are
rejected by the qualified ABLE program
before they are deposited into or allocat-
ed to the designated beneficiary’s ABLE
account.
(5) Restriction of contributors. A qual-
ified ABLE program may allow the desig-
nated beneficiary, from time to time, to re-
strict who may make contributions to the
designated beneficiary’s ABLE account.

Bulletin No. 2020–50 1589 December 7, 2020
(h) Qualified disability expenses—(1)
In general. Qualified disability expens-
es are expenses incurred that relate to
the blindness or disability of the desig-
nated beneficiary of the ABLE account
and are for the benefit of that designated
beneficiary in maintaining or improving
his or her health, independence, or qual-
ity of life. See § 1.529A-1(b)(15). Such
expenses include, but are not limited to,
expenses related to the designated bene-
ficiary’s education, housing, transporta-
tion, employment training and support,
assistive technology and related services,
personal support services, health, pre-
vention and wellness, financial manage-
ment and administrative services, legal
fees, expenses for oversight and monitor-
ing, and funeral and burial expenses, as
well as other expenses that may be identi-
fied from time to time in future guidance
published in the Internal Revenue Bulle-
tin. See § 601.601(d)(2) of this chapter.
Qualified disability expenses include ba-
sic living expenses and are not limited to
items for which there is a medical neces-
sity or which solely benefit an individual
with a disability.
(2) Example. The following example
illustrates this paragraph (h): B, an indi-
vidual, has a medically determined mental
impairment that causes marked and severe
limitations on B’s ability to navigate and
communicate. A smart phone would en-
able B to navigate and communicate more
safely and effectively, thereby helping B
to maintain B’s independence and to im-
prove B’s quality of life. Therefore, the
expense of buying, using, and maintaining
a smart phone that is used by B would be
a qualified disability expense.
(i) Separate accounting. A program
will not be treated as a qualified ABLE
program unless it provides separate ac-
counting for each ABLE account. Sepa-
rate accounting requires that contributions
for the benefit of a designated beneficiary
and any earnings attributable thereto must
be allocated to that designated beneficia-
ry’s ABLE account. Whether or not a pro-
gram provides each designated beneficia-
ry an annual account statement showing
the total account balance, the investment
in the account, the accrued earnings, and
the distributions from the account, the
program must give this information to the
designated beneficiary upon request.
(j) Program-to-program transfers. A
qualified ABLE program may permit a
change of qualified ABLE program or
a change of designated beneficiary by
means of a program-to-program transfer
as defined in § 1.529A-1(b)(13). In that
event, subject to any contrary provisions
or limitations adopted by the qualified
ABLE program, rules similar to the rules
of § 1.401(a)(31)-1, Q&A-3 and 4 (which
apply for purposes of a direct rollover
from a qualified plan to an eligible retire-
ment plan) apply for purposes of deter-
mining whether an amount is paid in the
form of a program-to-program transfer.
(k) Carryover of attributes—(1) In
general. Upon a rollover, program-to-pro-
gram transfer, or change of designated
beneficiary, all of the attributes of the
former ABLE account relevant for pur-
poses of calculating the investment in the
account are applicable to the recipient
ABLE account. The portion of the roll-
over or transfer amount that constituted
investment in the account from which the
distribution or transfer was made is added
to investment in the recipient ABLE ac-
count. In addition, the portion of the roll-
over or transfer amount that constituted
earnings of the account from which the
distribution or transfer was made is add-
ed to the earnings of the recipient ABLE
account.
(2) Annual contribution limit. Upon a
rollover or program-to-program transfer,
for purposes of applying the annual con-
tribution limit under paragraph (g)(2) of
this section to the transferee account, an-
nual contributions to the designated bene-
ficiary’s transferor ABLE account during
the taxable year in which the rollover or
program-to-program transfer occurs are
included. However, upon a change of des-
ignated beneficiary, or upon a rollover or
program-to-program transfer to the ABLE
account of a different designated benefi-
ciary who is both a member of the family
as defined in § 1.529A-1(b)(12) and an
eligible individual, no amounts contrib-
uted to the prior designated beneficiary’s
ABLE account are included when apply-
ing the annual contribution limit under
paragraph (g)(2) of this section.
(3) Investment direction limit. Upon a
rollover or program-to-program transfer,
the number of investment directions by the
designated beneficiary include the number
of investment directions made prior to the
rollover or program-to-program transfer
during the same taxable year for purposes
of paragraph (l) of this section. However,
upon a change of designated beneficiary,
or upon a rollover or program-to-program
transfer to the ABLE account of a differ-
ent designated beneficiary who is both
a member of the family as defined in §
1.529A-1(b)(12) and an eligible individ-
ual, the number of investment directions
made for the prior designated beneficia-
ry’s ABLE account are not included in
determining the number of investment di-
rections made for the new designated ben-
eficiary’s ABLE account in that same year.
(l) Investment direction. A program
will not be treated as a qualified ABLE
program unless it provides that the des-
ignated beneficiary of an ABLE account
established under such program may di-
rect, whether directly or indirectly, the in-
vestment of any contributions to the pro-
gram (or any earnings thereon) no more
than two times in any calendar year. Such
an investment direction does not include
a request to transfer any part of the ac-
count balance from an investment option
to a cash equivalent option to effectuate
a distribution, or the automatic rebalanc-
ing of the assets of an ABLE account to
maintain the asset allocation level chosen
when the account was established or by a
subsequent investment direction.
(m) No pledging of interest as security
for a loan. A program will not be treated
as a qualified ABLE program unless the
terms of the program, or a State statute
or regulation that governs the program,
prohibit any interest in the program or
any portion thereof from being used as
security for a loan. For this purpose, the
program administrator’s advance of funds
to satisfy a withdrawal request during the
period between the sale of an asset in the
ABLE account (whose value is sufficient
to satisfy the withdrawal request) and the
clearing or settlement of that sale, does
not constitute a loan, pledge, or grant of
security for a loan. Similarly, the use of
checking accounts or debit cards to facil-
itate a qualified ABLE program’s ability
to make distributions will not be treated
as a pledge or grant of security for a loan
during the period between the use of the
check or debit card and the clearing or
settlement of that transaction, provided

December 7, 2020 1590 Bulletin No. 2020–50
that the ABLE program does not advance
funds to a designated beneficiary in excess
of the amount in the designated beneficia-
ry’s ABLE account.
(n) No sale or exchange. A qualified
ABLE program must ensure that no inter-
est in an ABLE account may be sold or
exchanged.
(o) Post-death payments. A qualified
ABLE program must provide that a por-
tion or all of the balance remaining in the
ABLE account of a deceased designated
beneficiary must be distributed to a State
that files a claim against the designated
beneficiary or the ABLE account itself
with respect to benefits provided to the
designated beneficiary under that State’s
Medicaid plan established under title XIX
of the Social Security Act. The payment
of such claim (if any) will be made only
after providing for the payment from the
designated beneficiary’s ABLE account
of the designated beneficiary’s funeral
and burial expenses (including the unpaid
balance of a pre-death contract for those
services) and all outstanding payments
due for his or her other qualified disabil-
ity expenses, and will be limited to the
amount of the total medical assistance
paid for the designated beneficiary after
the establishment of the ABLE account
over the amount of any premiums paid,
whether from the ABLE account or oth-
erwise by or on behalf of the designated
beneficiary, to a Medicaid Buy-In pro-
gram under any such State Medicaid plan.
The establishment of the ABLE account is
the date on which the ABLE account was
established or, if earlier, the date on which
was established any ABLE account for the
same designated beneficiary from which
amounts were rolled over or transferred to
the ABLE account, but in no event earli-
er than the date on which the designated
beneficiary became the designated benefi-
ciary of the account from which amounts
were transferred. After the expiration of
the applicable statute of limitations for fil-
ing Medicaid claims against the designat-
ed beneficiary’s estate, a qualified ABLE
program may distribute the balance of the
ABLE account to the successor designat-
ed beneficiary or, if none, to the deceased
designated beneficiary’s estate. A State
law prohibiting the filing of such a claim
against either the ABLE account or the
designated beneficiary’s estate will not
prevent that State’s program from being a
qualified ABLE program.
(p) Reporting requirements. A qualified
ABLE program must comply with all ap-
plicable reporting requirements, including
without limitation those described in §§
1.529A-5 through 1.529A-7.
(q) Applicability date. This section ap-
plies to calendar years beginning on or
after January 1, 2021. See § 1.529A-8 for
the provision of transition relief.
§ 1.529A-3 Tax treatment.
(a) Taxation of distributions—(1) In
general. Each distribution from an ABLE
account consists of an earnings portion of
the account (computed in accordance with
paragraph (c) of this section) and invest-
ment in the account. If the total amount
distributed from an ABLE account to or
for the benefit of the designated beneficia-
ry of that ABLE account during his or her
taxable year does not exceed the qualified
disability expenses of the designated ben-
eficiary paid during that year, no amount
distributed is includible in the gross in-
come of the designated beneficiary for that
year. If the total amount distributed from
an ABLE account to or for the benefit of
the designated beneficiary of that ABLE
account during his or her taxable year ex-
ceeds the qualified disability expenses of
the designated beneficiary paid during that
year (regardless of when incurred), the dis-
tributions from the ABLE account, except
to the extent excluded from gross income
under this section or any other provision
of chapter 1 of the Internal Revenue Code,
must be included in the gross income of
the designated beneficiary in the manner
provided under this section and section
72. The amount to be included in gross
income is based on the earnings portion
of each distribution, computed in accor-
dance with paragraph (c) of this section.
The earnings portion that is includible in
gross income is the sum of the earnings
portion of all distributions made in that
year, reduced by an amount that bears the
same ratio to the total earnings portion as
the amount of qualified disability expens-
es paid during the year bears to such total
distributions during the year. If an excess
contribution or excess aggregate contri-
bution is returned within the time period
required in § 1.529A-2(g)(4), any net in-
come distributed is includible in the gross
income of the contributor(s) in the taxable
year in which the excess contribution or
excess aggregate contribution was made.
(2) Additional period. The designated
beneficiary may treat as having been paid
during the preceding taxable year qualified
disability expenses paid on or before the
60th day immediately following the end
of the designated beneficiary’s preceding
taxable year. Qualified disability expenses
treated, pursuant to the rule in the preced-
ing sentence, as having been paid during
the designated beneficiary’s taxable year
immediately prior to the year of their ac-
tual payment may not be included in the
total qualified disability expenses for the
year in which they were paid.
(b) Additional exclusions from gross
income—(1) Rollover. A rollover as de-
fined in § 1.529A-1(b)(16) is not included
in gross income under paragraph (a) of
this section.
(2) Program-to-program transfers. A
program-to-program transfer as defined
in § 1.529A-1(b)(13) is not a distribution
and is not included in gross income under
paragraph (a) of this section.
(3) Change of designated beneficia-
ry—(i) In general. A change of desig-
nated beneficiary of an ABLE account is
not treated as a distribution for purposes
of section 529A, and is not included in
gross income under paragraph (a) of this
section, if the successor designated ben-
eficiary is—
(A) An eligible individual for the tax-
able year in which the change is made; and
(B) A member of the family (as defined
in § 1.529A-1(b)(12)) of the former desig-
nated beneficiary.
(ii) Other designated beneficiary
changes. In the case of any change of des-
ignated beneficiary not described in para-
graph (b)(3)(i) of this section, the former
designated beneficiary of that ABLE ac-
count will be treated as having received a
distribution of the fair market value of the
assets in that ABLE account on the date
on which the change is made to the new
designated beneficiary.
(4) Payments to creditors post-death.
Distributions made after the death of the
designated beneficiary in payment of
outstanding obligations due for qualified
disability expenses, as well as the funeral
and burial expenses of the designated ben-

Bulletin No. 2020–50 1591 December 7, 2020
eficiary, are not included in gross income
of the designated beneficiary or his or her
estate. Included among these obligations
is the post-death payment of any part of a
claim filed against the deceased designat-
ed beneficiary or his or her estate or ABLE
account by a State with respect to benefits
provided to the designated beneficiary un-
der that State’s Medicaid plan.
(c) Computation of earnings. The earn-
ings portion of a distribution is equal to
the product of the amount of the distribu-
tion and the earnings ratio, as defined in
§ 1.529A-1(b)(7). The balance of the dis-
tribution (the amount of the distribution
minus the earnings portion of that distri-
bution) is the portion of that distribution
that constitutes the return of investment in
the account.
(d) Additional tax on amounts inclu-
dible in gross income—(1) In general.
If any amount of a distribution from an
ABLE account is includible in the gross
income of a person for any taxable year
under paragraph (a) of this section (inclu-
dible amount), the income tax imposed
on that person by chapter 1 of the Inter-
nal Revenue Code will be increased by an
amount equal to 10 percent of the includi-
ble amount.
(2) Exceptions—(i) Distributions on
or after the death of the designated ben-
eficiary. Paragraph (d)(1) of this section
does not apply to any distribution made
from the ABLE account on or after the
death of the designated beneficiary to the
estate of the designated beneficiary, to an
heir or legatee of the designated beneficia-
ry, or to a creditor described in paragraph
(b)(4) of this section.
(ii) Returned excess contributions and
additional accounts. Paragraph (d)(1) of
this section does not apply to any return
made in accordance with § 1.529A-2(g)
(4) of an excess contribution as defined in
§ 1.529A-1(b)(9), an excess compensation
contribution as defined in § 1.529A-2(g)
(2)(iii)(C), excess aggregate contribu-
tion as defined in § 1.529A-1(b)(10), or
an additional account as referenced in §
1.529A-2(c)(3)(ii)(A), (B), or (C).
(e) Tax on excess contributions. Un-
der section 4973(h), a contribution to
an ABLE account in excess of the an-
nual contributions limit described in §
1.529A-2(g)(2) is subject to an excise tax
in an amount equal to 6 percent of the ex-
cess contribution. However, any the ex-
cess contribution or excess compensation
contribution as defined in § 1.529A-2(g)
(2)(iii)(C) returned in accordance with
the provisions of § 1.529A-2(g)(4) is not
treated as a contribution.
(f) Filing requirements. A qualified
ABLE program is not required to file
Form 990, “Return of Organization Ex-
empt From Income Tax,” Form 1041,
“U.S. Income Tax Return for Estates and
Trusts,” or Form 1120, “U.S. Corporation
Income Tax Return.” However, a qualified
ABLE program is required to file Form
990-T, “Exempt Organization Business
Income Tax Return,” if such filing would
be required under the rules of §§ 1.6012-
2(e) and 1.6012-3(a)(5) if the ABLE pro-
gram were an organization described in
those sections.
(g) No inference outside section 529A.
The rules provided in this section con-
cerning the Federal tax treatment of con-
tributions apply only for purposes of the
application of section 529A. No inference
is intended with respect to the application
of any other Code provisions or Federal
tax doctrines. For example, a contribu-
tion made by an employer to the ABLE
account of an employee or an employee’s
family member is subject to the rules gov-
erning the Federal taxation of compensa-
tion.
(h) Applicability date. This section ap-
plies to calendar years beginning on or
after January 1, 2021. See § 1.529A-8 for
the provision of transition relief.
§ 1.529A-4 Gift, estate, and generation-
skipping transfer taxes.
(a) Contributions—(1) In general.
Each contribution by a person to an ABLE
account other than by the designated ben-
eficiary of that account is treated as a com-
pleted gift to the designated beneficiary of
the account for gift tax purposes. Under
the applicable Federal gift tax rules, a con-
tribution from a corporation, partnership,
trust, estate, or other entity is treated as a
gift by the shareholders, partners, or other
beneficial owners in proportion to their re-
spective ownership interests in the entity.
See § 25.2511-1(c) and (h) of this chapter.
A gift to an ABLE account is not treated
as either a gift of a future interest in prop-
erty, or a qualified transfer under section
2503(e). To the extent a contributor’s gifts
to the designated beneficiary, including
gifts paid into the designated beneficiary’s
ABLE account, do not exceed the annual
limit in section 2503(b), the contribution
is not a taxable gift. This provision, how-
ever, does not change any other provision
applicable to the transfer. For example, a
contribution by the employer of the des-
ignated beneficiary’s parent continues to
constitute earned income to the parent and
then a gift by the parent to the designated
beneficiary. The timely return of an excess
contribution or an excess aggregate contri-
bution in accordance with § 1.529A-2(g)
(4) is not a taxable gift.
(2) Generation-skipping transfer
(GST) tax. To the extent the contribution
into an ABLE account is a nontaxable gift
for Federal gift tax purposes, the inclusion
ratio for purposes of the GST tax will be
zero pursuant to section 2642(c)(1).
(3) Designated beneficiary as contribu-
tor. A designated beneficiary may make a
contribution to fund his or her own ABLE
account. That contribution is not a gift.
(b) Distributions. No distribution from
an ABLE account to or for the benefit of
the designated beneficiary is treated as a
taxable gift to that designated beneficiary.
(c) Transfer to another designated
beneficiary. Neither gift tax nor genera-
tion-skipping transfer tax applies to the
transfer (by rollover, program-to-pro-
gram transfer, or change of beneficiary)
of part or all of an ABLE account to the
ABLE account of a different designated
beneficiary if the successor designated
beneficiary is both an eligible individual
and a member of the family (as described
in § 1.529A-1(b)(12)) of the designated
beneficiary. Any other transfer will con-
stitute a gift by the designated beneficia-
ry to the successor designated beneficia-
ry, and the usual gift and GST tax rules
will apply.
(d) Transfer tax on death of designated
beneficiary. Upon the death of the desig-
nated beneficiary, the designated benefi-
ciary’s ABLE account is includible in his
or her gross estate for estate tax purposes
under section 2031. The payment of out-
standing qualified disability expenses and
the payment of certain claims made by a
State under its Medicaid plan may be de-
ductible for estate tax purposes if the re-
quirements of section 2053 are satisfied.

December 7, 2020 1592 Bulletin No. 2020–50
(e) Applicability date. This section ap-
plies to calendar years beginning on or
after January 1, 2021. See § 1.529A-8 for
the provision of transition relief.
§ 1.529A-5 Reporting of the
establishment of and contributions to
an ABLE account.
(a) In general. A filer defined in para-
graph (b)(1) of this section must, with re-
spect to each ABLE account—
(1) File an annual information return,
as described in paragraph (c) of this sec-
tion, with the Internal Revenue Service;
and
(2) Furnish an annual statement, as de-
scribed in paragraph (d) of this section, to
the designated beneficiary of the ABLE
account.
(b) Additional definitions. In addition
to the definitions in § 1.529A-1(b), the fol-
lowing definitions also apply for purposes
of this section—
(1) Filer means the State or its agen-
cy or instrumentality that establishes and
maintains the qualified ABLE program
under which an ABLE account is estab-
lished. The filing may be done by either
an officer or employee of the State or its
agency or instrumentality having control
of the qualified ABLE program, or the of-
ficer’s or employee’s designee.
(2) TIN means taxpayer identification
number as defined in section 7701(a)(41).
(c) Requirement to file return—(1) Form
of return. For purposes of reporting the in-
formation described in paragraph (c)(2) of
this section, the filer must file Form 5498-
QA, “ABLE Account Contribution Infor-
mation,” or any successor form, together
with Form 1096, “Annual Summary and
Transmittal of U.S. Information Returns.”
(2) Information included on return.
With respect to each ABLE account, the
filer must include on the return—
(i) The name, address, and TIN of the
designated beneficiary of the ABLE ac-
count;
(ii) The name, address, and TIN of the
filer;
(iii) Information regarding the estab-
lishment of the ABLE account, as required
by the form and its instructions;
(iv) Information regarding the disabili-
ty certification or other basis for eligibility
of the designated beneficiary, as required
by the form and its instructions. For fur-
ther information regarding eligibility and
disability certification, see § 1.529A-2(d)
and (e), respectively;
(v) The total amount of any contribu-
tions made with respect to the ABLE ac-
count during the calendar year; such con-
tributions do not include any contribution
rejected and returned to the contributor
before being deposited into or allocated to
the ABLE account or any excess contribu-
tions, excess compensation contributions,
or excess aggregate contributions returned
as described in § 1.529A-2(g)(4);
(vi) The fair market value of the ABLE
account as of the last day of the calendar
year; and
(vii) Any other information required
by the form, its instructions, or published
guidance. See §§ 601.601(d) and 601.602
of this chapter.
(3) Time and manner of filing re-
turn—(i) In general. Except as provided
in paragraph (c)(3)(ii) of this section, the
information returns required under this
paragraph must be filed on or before May
31 of the year following the calendar year
with respect to which the return is being
filed, in accordance with the forms and
their instructions.
(ii) Extensions of time. See §§ 1.6081-1
and 1.6081-8 for rules relating to exten-
sions of time to file information returns
required in this section.
(iii) Electronic filing. See § 301.6011-2
of this chapter for rules relating to elec-
tronic filing. See also Instructions for
Forms 1099-QA and 5498-QA, Distribu-
tions From ABLE Accounts and ABLE
Account Contribution Information.
(iv) Substitute forms. The filer may file
the returns required under this paragraph
(c) on an acceptable substitute form. See
Publication 1179, “General Rules and
Specifications for Substitute Forms 1096,
1098, 1099, 5498, and Certain Other In-
formation Returns.”
(d) Requirement to furnish statement—
(1) In general. The filer must furnish a
statement to the designated beneficiary of
the ABLE account for which it is required
to file a Form 5498-QA (or any successor
form). The statement must include—
(i) The information required under
paragraph (c)(2) of this section;
(ii) A legend that identifies the state-
ment as important tax information that is
being furnished to the Internal Revenue
Service; and
(iii) The name and address of the office
or department of the filer that is the infor-
mation contact for questions regarding the
ABLE account to which the Form 5498-
QA relates.
(2) Time and manner of furnishing
statement—(i) In general. Except as pro-
vided in paragraph (d)(2)(ii) of this sec-
tion, the filer must furnish the statement
described in paragraph (d)(1) of this sec-
tion to the designated beneficiary on or
before March 15 of the year following the
calendar year with respect to which the
statement is being furnished. If mailed,
the statement must be sent to the designat-
ed beneficiary’s last known address. The
statement may be furnished electronically,
as provided in § 1.529A-7.
(ii) Extensions of time. The Internal
Revenue Service may, at its discretion,
grant an extension of time to furnish state-
ments required in this section.
(3) Copy of Form 5498-QA. The filer
may satisfy the requirement of this para-
graph (d) by furnishing either a copy of
Form 5498-QA (or successor form) or
an acceptable substitute form. See Publi-
cation 1179, “General Rules and Specifi-
cations for Substitute Forms 1096, 1098,
1099, 5498, and Certain Other Informa-
tion Returns.”
(e) Request for TIN of designated ben-
eficiary. The filer must request the TIN
of the designated beneficiary at the time
the ABLE account is established if the fil-
er does not already have a record of the
designated beneficiary’s correct TIN. The
filer must clearly notify the designated
beneficiary that the law requires the desig-
nated beneficiary to furnish a TIN so that
it may be included on an information re-
turn to be filed by the filer. The designated
beneficiary may provide his or her TIN in
any manner including orally, in writing,
or electronically. If the TIN is furnished
in writing, no particular form is required.
Form W-9, “Request for Taxpayer Identi-
fication Number and Certification,” may
be used, or the request may be incorporat-
ed into the forms related to the establish-
ment of the ABLE account.
(f) Penalties—(1) Failure to file return.
The section 6693 penalty may apply to the
filer that fails to file information returns at
the time and in the manner required by this

Bulletin No. 2020–50 1593 December 7, 2020
section, unless it is shown that such fail-
ure is due to reasonable cause. See section
6693 and § 301.6693-1 of this chapter.
(2) Failure to furnish TIN. The section
6723 penalty may apply to any designated
beneficiary who fails to furnish his or her
TIN to the filer. See section 6723, and §
301.6723-1 of this chapter, for rules relating
to the penalty for failure to furnish a TIN.
(g) Applicability date. The rules of this
section apply to information returns re-
quired to be filed, and payee statements
required to be furnished, after December
31, 2020. See § 1.529A-8 for the provi-
sion of transition relief.
§ 1.529A-6 Reporting of distributions
from and termination of an ABLE
account.
(a) In general. The filer as defined in §
1.529A-5(b)(1) must, with respect to each
ABLE account from which any distribu-
tion is made or which is terminated during
the calendar year—
(1) File an annual information return,
as described paragraph (b) of this section,
with the Internal Revenue Service; and
(2) Furnish an annual statement, as de-
scribed in paragraph (c) of this section, to
the designated beneficiary of the ABLE
account and to each contributor who re-
ceived a returned contribution in accor-
dance with § 1.529A-2(g)(4) attributable
to the calendar year.
(b) Requirement to file return—(1)
Form of return. For purposes of reporting
the information in paragraph (b)(2) of this
section, the filer must file Form 1099-QA,
“Distributions From ABLE Accounts,” or
any successor form, together with Form
1096, “Annual Summary and Transmittal
of U.S. Information Returns.”
(2) Information included on return.
The filer must include on the return—
(i) The name, address, and TIN of the
recipient of the payment, whether the
designated beneficiary of the ABLE ac-
count or any contributor who received a
returned contribution in accordance with
§ 1.529A-2(g)(4) attributable to the calen-
dar year;
(ii) The name, address, and TIN of the
filer;
(iii) Whether the return is being filed
with respect to the designated beneficiary
or to a contributor;
(iv) The aggregate amount of distribu-
tions or returned contributions (including
net income attributable to the returned
contributions) from the ABLE account to
the recipient during the calendar year;
(v) Information as to basis and earn-
ings with respect to such distributions or
returns of contributions;
(vi) Information regarding termination
(if any) of the ABLE account if the recipi-
ent is the designated beneficiary;
(vii) Information regarding each pro-
gram-to-program transfer from the ABLE
account during the designated beneficia-
ry’s taxable year; and
(viii) Any other information required
by the form, its instructions, or published
guidance. See §§ 601.601(d) and 601.602
of this chapter.
(3) Information excluded. A State filing
a claim against the estate or ABLE ac-
count of a deceased designated beneficia-
ry with respect to benefits provided to the
designated beneficiary under that State’s
Medicaid plan is a creditor, and not a ben-
eficiary, so the payment of the claim is
not a distribution from the ABLE account
and should not be reported as such on the
Form 1099-QA for that year.
(4) Time and manner of filing return—
(i) In general. Except as provided in para-
graph (b)(4)(ii) of this section, the Forms
1099-QA and 1096 must be filed on or be-
fore February 28 (March 31 if filing elec-
tronically) of the year following the calen-
dar year with respect to which the return is
being filed, in accordance with the forms
and their instructions.
(ii) Extensions of time. See §§ 1.6081-1
and 1.6081-8 for rules relating to exten-
sions of time to file information returns
required in this section.
(iii) Electronic filing. See § 301.6011-2
of this chapter for rules relating to elec-
tronic filing. See also Instructions for
Forms 1099-QA and 5498-QA, Distribu-
tions From ABLE Accounts and ABLE
Account Contribution Information.
(iv) Substitute forms. The filer may file
the return required under this paragraph
(b) on an acceptable substitute form. See
Publication 1179, “General Rules and
Specifications for Substitute Forms 1096,
1098, 1099, 5498, and Certain Other In-
formation Returns.”
(c) Requirement to furnish statement—
(1) In general. The filer must furnish a
statement to the designated beneficiary
and each contributor (if any) of the ABLE
account for which it is required to file a
Form 1099-QA (or any successor form).
The statement must include—
(i) The information required under
paragraph (b)(2) of this section.
(ii) A legend that identifies the state-
ment as important tax information that is
being furnished to the Internal Revenue
Service; and
(iii) The name and address of the office
or department of the filer that is the infor-
mation contact for questions regarding the
ABLE account to which the Form 1099-
QA relates.
(2) Time and manner of furnishing
statement—(i) In general. Except as pro-
vided in paragraph (c)(2)(ii) of this sec-
tion, a filer must furnish the statement de-
scribed in paragraph (c)(1) of this section
to the designated beneficiary or contrib-
utor on or before January 31 of the year
following the calendar year with respect
to which the statement is being furnished.
If mailed, the statement must be sent to the
recipient’s last known address. The state-
ment may be furnished electronically, as
provided in § 1.529A-7.
(ii) Extensions of time. The Internal
Revenue Service may, at its discretion,
grant an extension of time to furnish state-
ments required in this section.
(3) Copy of Form 1099-QA. A filer may
satisfy the requirement of this paragraph
(c) by furnishing either a copy of Form
1099-QA (or successor form) or an ac-
ceptable substitute form. See Publication
1179, “General Rules and Specifications
for Substitute Forms 1096, 1098, 1099,
5498, and Certain Other Information Re-
turns.”
(d) Request for TIN of contributor(s)—
(1) In general. Except as provided in para-
graph (d)(2) of this section, a filer must
request the TIN of each contributor to the
ABLE account at the time a contribution
is made, if the filer does not already have a
record of that person’s correct TIN.
(2) Exception. If the filer has a system
in place to identify and reject amounts that
either would constitute an excess contri-
bution or excess aggregate contribution
(as defined in § 1.529A-1(b)(9) or (10),
respectively) or were contributed to an
additional ABLE account as described in
§ 1.529A-2(c)(3)(ii)(C) (excess amounts)

December 7, 2020 1594 Bulletin No. 2020–50
before those excess amounts are deposit-
ed into or allocated to an ABLE account,
the filer need not request the TIN of each
contributor at the time of contribution. A
filer with such a system must request a
contributor’s TIN only if and when an ex-
cess contribution or excess aggregate con-
tribution nevertheless is deposited into or
allocated to an account and the filer must
return the excess amounts including net
income to the contributor. The filer must
clearly notify each such contributor to the
account that the law requires that person
to furnish a TIN so that it may be included
on an information return to be filed by the
filer. The contributor may provide his or
her TIN in any manner including orally, in
writing, or electronically. If the TIN is fur-
nished in writing, no particular form is re-
quired. Form W-9, “Request for Taxpayer
Identification Number and Certification,”
may be used, or the request may be incor-
porated into the forms related to the estab-
lishment of the ABLE account.
(e) Penalties—(1) Failure to file return.
The section 6693 penalty may apply to a
filer that fails to file information returns at
the time and in the manner required by this
section, unless it is shown that such fail-
ure is due to reasonable cause. See section
6693 and § 301.6693-1 of this chapter.
(2) Failure to furnish TIN. The section
6723 penalty may apply to any contribu-
tor who fails to furnish his or her TIN to
the filer in accordance with paragraph (d)
of this section. See section 6723, and §
301.6723-1 of this chapter, for rules relat-
ing to the penalty for failure to furnish a
TIN.
(f) Applicability date. The rules of this
section apply to information returns re-
quired to be filed, and payee statements
required to be furnished, after December
31, 2020. See § 1.529A-8 for the provi-
sion of transition relief.
§ 1.529A-7 Electronic furnishing of
statements to designated beneficiaries
and contributors.
(a) Electronic furnishing of state-
ments—(1) In general. A filer required
under § 1.529A-5 or § 1.529A-6 to fur-
nish a written statement to a designated
beneficiary of or contributor to an ABLE
account may furnish the statement in an
electronic format in lieu of a paper for-
mat. A filer who meets the requirements of
paragraphs (a)(2) through (6) of this sec-
tion is treated as furnishing the required
statement.
(2) Consent—(i) In general. The recip-
ient of the statement must have affirma-
tively consented to receive the statement
in an electronic format. The consent may
be made electronically in any manner that
reasonably demonstrates that the recipient
can access the statement in the electronic
format in which it will be furnished to the
recipient. Alternatively, the consent may
be made in a paper document if it is con-
firmed electronically.
(ii) Withdrawal of consent. The consent
requirement of this paragraph (a)(2) is not
satisfied if the recipient withdraws the
consent and the withdrawal takes effect
before the statement is furnished. The filer
may provide that a withdrawal of consent
takes effect either on the date it is received
by the filer or on another date no more
than 60 days later. The filer also may pro-
vide that a request for a paper statement
will be treated as a withdrawal of consent.
(iii) Change in hardware or software
requirements. If a change in the hardware
or software required to access the state-
ment creates a material risk that the recipi-
ent will not be able to access the statement,
the filer must, prior to changing the hard-
ware or software, provide the recipient
with a notice. The notice must describe the
revised hardware and software required to
access the statement and inform the re-
cipient that a new consent to receive the
statement in the revised electronic format
must be provided to the filer if the recipi-
ent does not want to withdraw the consent.
After implementing the revised hardware
and software, the filer must obtain from
the recipient, in the manner described in
paragraph (a)(2)(i) of this section, a new
consent or confirmation of consent to re-
ceive the statement electronically.
(iv) Examples. For purposes of the fol-
lowing examples that illustrate the rules
of this paragraph (a)(2), assume that the
requirements of § 1.529A-7(a)(3) have
been met:
(A) Example 1. Filer F sends Recipient R a letter
stating that R may consent to receive statements re-
quired under § 1.529A-5 or § 1.529A-6 electronical-
ly on a website instead of in a paper format. The let-
ter contains instructions explaining how to consent
to receive the statements electronically by accessing
the website, downloading the consent document,
completing the consent document, and e-mailing the
completed consent back to F. The consent document
posted on the website uses the same electronic for-
mat that F will use for the electronically furnished
statements. R reads the instructions and submits the
consent in the manner provided in the instructions.
R has consented to receive the statements electroni-
cally in the manner described in paragraph (a)(2)(i)
of this section.
(B) Example 2. Filer F sends Recipient R an
e-mail stating that R may consent to receive state-
ments required under § 1.529A-5 or § 1.529A-6 elec-
tronically instead of in a paper format. The e-mail
contains an attachment instructing R how to consent
to receive the statements electronically. The e-mail
attachment uses the same electronic format that F
will use for the electronically furnished statements.
R opens the attachment, reads the instructions, and
submits the consent in the manner provided in the in-
structions. R has consented to receive the statements
electronically in the manner described in paragraph
(a)(2)(i) of this section.
(C) Example 3. Filer F posts a notice on its web-
site stating that Recipient R may receive statements
required under § 1.529A-5 or § 1.529A-6 electroni-
cally instead of in a paper format. The website con-
tains instructions on how R may access a secure web
page and consent to receive the statements electron-
ically. By accessing the secure web page and giving
consent, R has consented to receive the statements
electronically in the manner described in paragraph
(a)(2)(i) of this section.
(3) Required disclosures—(i) In gener-
al. Prior to, or at the time of, a recipient’s
consent, the filer must provide to the re-
cipient a clear and conspicuous disclosure
statement containing each of the disclo-
sures described in paragraphs (a)(3)(ii)
through (viii) of this section.
(ii) Paper statement. The recipient
must be informed that the statement will
be furnished on paper if the recipient does
not consent to receive it electronically.
(iii) Scope and duration of consent.
The recipient must be informed of the
scope and duration of the consent. For
example, the recipient must be informed
whether the consent applies to statements
furnished every year after the consent is
given until it is withdrawn in the manner
described in paragraph (a)(3)(v)(A) of this
section, or only to the statement required
to be furnished on or before the due date
immediately following the date on which
the consent is given.
(iv) Post-consent request for a paper
statement. The recipient must be informed
of any procedure for obtaining a paper
copy of the recipient’s statement after giv-
ing the consent and whether a request for
a paper statement will be treated as a with-
drawal of consent.

Bulletin No. 2020–50 1595 December 7, 2020
(v) Withdrawal of consent. The recipi-
ent must be informed that—
(A) The recipient may withdraw a
consent by writing (electronically or on
paper) to the person or department whose
name, mailing address, and e-mail address
is provided in the disclosure statement;
(B) The filer will confirm, in writing
(electronically or on paper), the withdraw-
al and the date on which it takes effect;
and
(C) A withdrawal of consent does not
apply to a statement that was furnished
electronically in the manner described in
this paragraph (a) before the date on which
the withdrawal of consent takes effect.
(vi) Notice of termination. The recip-
ient must be informed of the conditions
under which a filer will cease furnishing
statements electronically to the recipient.
(vii) Updating information. The recip-
ient must be informed of the procedures
for updating the information needed by
the filer to contact the recipient. The filer
must inform the recipient of any change in
the filer’s contact information.
(viii) Hardware and software require-
ments. The recipient must be provided
with a description of the hardware and
software required to access, print, and re-
tain the statement, and the date when the
statement will no longer be available on
the website.
(4) Format. The electronic version of
the statement must contain all required in-
formation. See Publication 1179, “Gener-
al Rules and Specifications for Substitute
Forms 1096, 1098, 1099, 5498, and Cer-
tain Other Information Returns.”
(5) Notice—(i) In general. If the state-
ment is furnished on a website, the filer
must notify the recipient that the state-
ment is posted on a website. The notice
may be delivered by mail, electronic mail,
or in person. The notice must provide
instructions on how to access and print
the statement. The notice must include
the following statement in capital letters,
“IMPORTANT TAX RETURN DOC-
UMENT AVAILABLE.” If the notice is
provided by electronic mail, the foregoing
statement must be in the subject line of the
electronic mail.
(ii) Undeliverable electronic address.
If an electronic notice described in para-
graph (a)(5)(i) of this section is returned
as undeliverable, and the correct electron-
ic address cannot be obtained from the fil-
er’s records or from the recipient, then the
filer must furnish the notice by mail or in
person within 30 days after the electronic
notice is returned.
(iii) Corrected statements. If the fil-
er has corrected a recipient’s statement
that was furnished electronically, the fil-
er must furnish the corrected statement to
the recipient electronically. If the recipi-
ent’s statement was furnished through a
website posting and the filer has correct-
ed the statement, the filer must notify the
recipient that it has posted the corrected
statement on the website within 30 days
of such posting in the manner described
in paragraph (a)(5)(i) of this section. The
corrected statement or the notice must be
furnished by mail or in person if—
(A) An electronic notice of the website
posting of an original statement or the cor-
rected statement was returned as undeliv-
erable; and
(B) The recipient has not provided a
new e-mail address.
(6) Access period. Statements fur-
nished on a website must be retained on
the website through October 15 of the year
following the calendar year to which the
statements relate (or the first business day
after such October 15 if October 15 falls
on a Saturday, Sunday, or legal holiday).
The filer must maintain access to corrected
statements that are posted on the website
through October 15 of the year following
the calendar year to which the statements
relate (or the first business day after such
October 15 if October 15 falls on a Satur-
day, Sunday, or legal holiday) or the date
90 days after the corrected statements are
posted, whichever is later. The rules in this
paragraph (a)(6) do not replace the filer’s
obligation to keep records under section
6001 and § 1.6001-1(a).
(b) Applicability date. This section ap-
plies to statements required to be furnished
after December 31, 2020. See § 1.529A-8
for the provision of transition relief.
§ 1.529A-8 Applicability dates and
transition relief.
(a) Applicability dates. Except as oth-
erwise provided in paragraph (b) of this
section, §§ 1.529A-1 through 1.529A-4
apply for calendar years beginning on or
after January 1, 2021, §§ 1.529A-5 and
1.529A-6 apply to information returns
required to be filed, and payee statements
required to be furnished, after December
31, 2020, and § 1.529A-7 applies to state-
ments required to be furnished after De-
cember 31, 2020.
(b) Transition relief—(1) In general.
Any program purporting to be a qualified
ABLE program will not be disqualified
during the transition period set forth in
paragraph (b)(2) of this section (transi-
tion period) solely because of noncom-
pliance with one or more provisions of
§§ 1.529A-1 through 1.529A-7, provided
that the program is established and operat-
ed in accordance with a reasonable, good
faith interpretation of section 529A. Sim-
ilarly, no ABLE account established and
maintained under a program that meets
the requirements of this paragraph will
fail to qualify as an ABLE account during
the transition period. However, to be a
qualified ABLE program and an ABLE
account under such a program after the
transition period, the program and each
account established and maintained under
the program must be in compliance with
§§ 1.529A-1 through 1.529A-7 by the end
of the transition period. In no event, how-
ever, will a complete failure to file and
furnish reports, information returns and
payee statements required under section
529A(d)(1) for any accounts established
and maintained under the program (in-
cluding for calendar years beginning prior
to January 1, 2021), be deemed to be due
to reasonable cause for purposes of avoid-
ing penalties imposed under section 6693.
(2) Transition period. For purposes of
paragraph (b)(1) of this section, the transi-
tion period begins with the establishment
of the program purporting to be a qualified
ABLE program and continues through the
later of—
(i) November 21, 2022; or
(ii) The day immediately preceding the
first day of the qualified ABLE program’s
first taxable year beginning after the close
of the first regular session of the State
legislature that begins after November
19, 2020. If a State has a two-year legis-
lative session, each calendar year of such
session will be deemed to be a separate
regular session of the State legislature for
purposes of this paragraph.
(3) Compliance after transition period.
After the transition period, a program and

December 7, 2020 1596 Bulletin No. 2020–50
an account established and maintained un-
der that program must be in compliance
with §§ 1.529A-1 through 1.529A-7.
PART 25—GIFT TAXES; GIFTS
MADE AFTER DECEMBER 31, 1954
Par. 5. The authority citation for part 25
continues to read in part as follows:
Authority: 26 U.S.C. 7805.
* * * * *
Par. 6. Section 25.2501-1 is amended
by adding a sentence to the end of para-
graph (a)(1) to read as follows:
§ 25.2501-1 Imposition of tax.
(a) * * *
(1) * * * For gift tax rules related to an
ABLE account established under section
529A, see § 1.529A-4 of this chapter.
* * * * *
Par. 7. Section 25.2503-3 is amended
by adding a sentence to the end of para-
graph (a) to read as follows:
§ 25.2503-3 Future interests in
property.
(a)* * * A contribution to an ABLE ac-
count established under section 529A is
not a future interest.
* * * * *
Par. 8. Section 25.2503-6 is amended
by adding a sentence to the end of para-
graph (a) to read as follows:
§ 25.2503–6 Exclusion for certain
qualified transfer for tuition or medical
expenses.
(a) * * * A contribution to an ABLE
account established under section 529A is
not a qualified transfer.
* * * * *
Par. 9. Section 25.2511-2 is amended
by adding a sentence to the end of para-
graph (a) to read as follows:
§ 25.2511-2 Cessation of donor’s
dominion and control.
(a) * * * For gift tax rules related to an
ABLE account established under section
529A, see § 1.529A-4 of this chapter.
* * * * *
PART 26—GENERATION-SKIPPING
TRANSFER TAX REGULATIONS
UNDER THE TAX REFORM ACT OF
1986
Par. 10. The authority citation for part
26 continues to read in part as follows:
Authority: 26 U.S.C. 7805 and 26
U.S.C. 2663.
* * * * *
Par. 11. Section 26.2642-1 is amended
by adding a sentence to the end of para-
graph (a) to read as follows:
§ 26.2642-1 Inclusion ratio.
(a) * * * For generation-skipping trans-
fer tax rules related to an ABLE account
established under section 529A, see §
1.529A-4 of this chapter.
* * * * *
Par. 12. Section 26.2652-1 is amended
by adding a sentence to the end of para-
graph (a)(1) to read as follows:
§ 26.2652-1 Transferor defined; other
definitions.
(a) * * *
(1) * * * For generation-skipping trans-
fer tax rules related to an ABLE account
established under section 529A, see §
1.529A-4 of this chapter.
* * * * *
PART 301—PROCEDURE AND
ADMINISTRATION
Par. 13. The authority citation for part
301 continues to read in part as follows:
Authority: 26 U.S.C. 7805.
* * * * *
§ 301.6011-2 [Amended]
Par. 14. Section 301.6011-2 is amended
by adding the word “series” after “5498”
in the first sentence of paragraph (b)(1).
PART 602—OMB CONTROL
NUMBERS UNDER THE
PAPERWORK REDUCTION ACT
Par. 15. The authority citation for part
602 continues to read as follows:
Authority: 26 U.S.C. 7805.
Par. 16. In § 602.101, the paragraph (b)
table is amended by adding the following
entries in numerical order to the table to
read as follows:
§ 602.101 OMB Control Numbers.
* * * * *
(b) * * *
CFR part or section
where identified and
described
Current OMB
Control No.
* * * * *
1.529A-21545-2293
1.529A-51545-2262
1.529A-61545-2262
1.529A-71545-2262
* * * * *
Sunita Lough,
Deputy Commissioner for
Services and Enforcement.
Approved: September 29, 2020
David J. Kautter,
Assistant Secretary of the Treasury
(Tax Policy).
(Filed by the Office of the Federal Register on No-
vember 18, 2020, 8:45 am, and published in the issue
of the Federal Register for November 19, 2020, 85
F.R. 74010)

Bulletin No. 2020–50 1597 December 7, 2020
Part III
2020 Required
Amendments List for
Qualified Retirement Plans
and § 403(b) Retirement
Plans
Notice 2020-83
I. PURPOSE
This notice sets forth the 2020 Re-
quired Amendments List (2020 RA List).
The Required Amendments List (RA List)
applies to both individually designed
plans qualified under § 401(a) (qualified
individually designed plans) and individ-
ually designed plans that satisfy the re-
quirements of § 403(b) (§ 403(b) individ-
ually designed plans).
Section 5 of Rev. Proc. 2016-37, 2016-
29 I.R.B. 136, provides that, except as
otherwise provided by statute, or by reg-
ulations or other guidance published in
the Internal Revenue Bulletin, in the case
of a qualified individually designed plan,
the remedial amendment period for a dis-
qualifying provision arising as a result of
a change in qualification requirements is
extended to the end of the second calen-
dar year that begins after the issuance of
the RA List on which the change in qual-
ification requirements appears. Similarly,
section 5 of Rev. Proc. 2019-39, 2019-42
I.R.B. 945, provides that, except as oth-
erwise provided by statute, or by regula-
tions or other guidance published in the
Internal Revenue Bulletin, with respect to
a form defect in a § 403(b) individually
designed plan, the remedial amendment
period arising as a result of a change in §
403(b) requirements ends on the last day
of the second calendar year that begins af-
ter the issuance of the RA List on which
the change in § 403(b) requirements ap-
pears. Pursuant to these sections, Decem-
ber 31, 2022, generally is the last day of
the remedial amendment period with re-
spect to (1) a disqualifying provision aris-
ing as a result of a change in qualification
requirements that appears on the 2020 RA
List, and (2) a form defect arising as a re-
sult of a change in § 403(b) requirements
that appears on the 2020 RA List. In ad-
dition, under section 8.01 of Rev. Proc.
2016-37 and section 6.01 of Rev. Proc.
2019-39, December 31, 2022, generally is
also the plan amendment deadline for (1) a
disqualifying provision arising as a result
of a change in qualification requirements
that appears on the 2020 RA List, and (2) a
form defect arising as a result of a change
in § 403(b) requirements that appears on
the 2020 RA List. Later dates may apply
to a governmental plan (as defined in §
414(d)) pursuant to sections 5.06(3) and
8.01 of Rev. Proc. 2016-37 and sections
5.03(2)(c) and 6.01 of Rev. Proc. 2019-39.
References to qualification requirements
and to § 403(b) requirements in Parts III
and IV of this notice are referred to, sepa-
rately and collectively, as “requirements.”
1
II. BACKGROUND
Section 401(b) of the Internal Revenue
Code (Code) provides a remedial amend-
ment period during which a plan may be
amended retroactively to comply with the
qualification requirements under § 401(a).
Section 1.401(b)-1 describes the disqual-
ifying provisions that may be amended
retroactively and the remedial amendment
period during which retroactive amend-
ments may be adopted. That regulation
also grants the Commissioner the discre-
tion to designate certain plan provisions as
disqualifying provisions and to extend the
remedial amendment period.
Sections 5.05 and 5.06 of Rev. Proc.
2016-37 extend the remedial amendment
period for individually designed plans to
correct disqualifying provisions that arise
as a result of a change in qualification re-
quirements. Sections 5.05 and 5.06 pro-
vide that, except as otherwise provided
by statute, or by regulations or other guid-
ance published in the Internal Revenue
Bulletin, sections 5.05 and 5.06 set forth
the extended remedial amendment period
for disqualifying provisions. Under sec-
tion 5.05(3), the remedial amendment pe-
riod for a plan that is not a governmental
plan (as defined in § 414(d)) is extended
to the end of the second calendar year that
begins after the issuance of the RA List on
which the change in qualification require-
ments appears. Section 5.06(3) provides
a special rule for governmental plans that
may further extend the remedial amend-
ment period in some cases.
Section 8.01 of Rev. Proc. 2016-37
provides that the plan amendment dead-
line with respect to a disqualifying provi-
sion described in section 5 of Rev. Proc.
2016-37 is the date on which the remedial
amendment period ends with respect to
that disqualifying provision.
Section 21.02 of Rev. Proc. 2013-22,
2013-18 I.R.B. 985, establishes an initial
remedial amendment period that permits
an eligible employer to retroactively cor-
rect form defects in its written § 403(b)
plan.
Section 3 of Rev. Proc. 2017-18, 2017-
5 I.R.B. 743, as modified by Notice 2020-
35, 2020-25 I.R.B. 948, provides that the
initial remedial amendment period for
a form defect in a § 403(b) plan ends on
June 30, 2020.
Section 5.01 of Rev. Proc. 2019-39, as
modified by Notice 2020-35, establishes a
system of recurring remedial amendment
periods for § 403(b) individually designed
plan form defects first occurring after the
last day of the initial remedial amendment
period.
Section 5.03(1) of Rev. Proc. 2019-39
provides that, except as otherwise provid-
ed by statute, or by regulations or other
guidance published in the Internal Rev-
enue Bulletin, with respect to a form de-
fect relating to, or integral to, a change in
§ 403(b) requirements that occurs after
the initial remedial period, the remedial
amendment period for a § 403(b) individ-
ually designed plan that is not a govern-
mental plan (as defined in § 414(d)) ends
on the last day of the second calendar year
1
In order to help plan sponsors and practitioners achieve operational compliance with changes in qualification requirements, the IRS provides the Operational Compliance List, a list of
changes in qualification requirements that are effective during a calendar year, on the IRS website at https://www.irs.gov/retirement-plans/operational-compliance-list. See section 10 of Rev.
Proc. 2016-37 and section 9 of Rev. Proc. 2019-39.

December 7, 2020 1598 Bulletin No. 2020–50
that begins after the issuance of the RA
List on which the change in requirements
appears. Section 5.03(2)(c) provides a
special rule for governmental plans that
could further extend the remedial amend-
ment period in some cases.
Section 6.01 of Rev. Proc. 2019-39
provides that the plan amendment dead-
line with respect to a form defect in a
§ 403(b) individually designed plan first
occurring after the initial remedial amend-
ment period is the date on which the reme-
dial amendment period ends with respect
to that form defect.
Section 7 of Rev. Proc. 2019-39, as
modified by Notice 2020-35, extends the
initial remedial amendment period with
respect to a § 403(b) individually de-
signed plan form defect first occurring
on or before June 30, 2020, to the later of
(1) June 30, 2020, or (2) the end of the re-
medial amendment period provided under
section 5 of Rev. Proc. 2019-39.
Section 9 of Rev. Proc. 2016-37 and
section 8.01 of Rev. Proc. 2019-39, as
modified by Notice 2020-35, provide that
the Department of the Treasury (Trea-
sury Department) and the Internal Rev-
enue Service (IRS) intend to publish an
RA List annually. In general, a change in
qualification requirements will not ap-
pear on an RA List until guidance with
respect to that change (including, in cer-
tain cases, model amendments) has been
provided in regulations or in other guid-
ance published in the Internal Revenue
Bulletin. However, in the discretion of
the Treasury Department and the IRS, a
change in qualification requirements may
be included on an RA List in other cir-
cumstances, such as in cases in which a
statutory change is enacted and the Trea-
sury Department and the IRS anticipate
that no guidance will be issued.
The remedial amendment period appli-
cable to a disqualifying provision arising
as a result of a change in qualification re-
quirements may be extended beyond the
date that normally would apply to an item
included on the 2020 RA List. Section
601 of the Setting Every Community Up
for Retirement Enhancement Act of 2019
(SECURE Act)
2
provides, in general, that
a retirement plan or annuity contract will
be treated as being operated in accordance
with the terms of the plan and, except as
provided by the Secretary of the Treasury
(Secretary), or the Secretary’s delegate, a
retirement plan will not fail to satisfy the
anti-cutback requirements of § 411(d)(6)
of the Code or § 204(g) of the Employee
Retirement Income Security Act of 1974,
Pub. L. 93-406, 88 Stat. 829 (1974), as
amended (ERISA), as a result of a plan
amendment made pursuant to a provision
of the SECURE Act or the regulations
thereunder, provided that:
(1) the amendment is adopted no later
than the last day of the first plan year be-
ginning on or after January 1, 2022, or, for
an applicable collectively bargained plan
(a plan maintained pursuant to one or more
collective bargaining agreements between
employee representatives and one or more
employers ratified before December 20,
2019) or a § 414(d) governmental plan,
the last day of the first plan year begin-
ning on or after January 1, 2024, or such
later date as the Secretary may prescribe
(SECURE Act section 601 date);
(2) the amendment applies retroactive-
ly to the effective date of the SECURE
Act provision or the regulations thereun-
der (or, in the case of an amendment not
required by a provision of the SECURE
Act or the regulations thereunder, the ef-
fective date specified by the plan or con-
tract); and
(3) the plan or contract is operated as
if the amendment were in effect during
the period beginning on the effective date
of the SECURE Act provision or the reg-
ulations thereunder (or, in the case of an
amendment not required by a provision of
the SECURE Act or the regulations there-
under, the effective date specified by the
plan or contract) and ending on the SE-
CURE Act section 601 date or, if earlier,
the date the amendment is adopted.
Notice 2020-68, 2020-38 I.R.B. 567,
Q&A G-1, provides the deadline by
which a retirement plan must be amended
to reflect the provisions of the SECURE
Act and the regulations thereunder. In
general, for (1) a qualified plan that is not
a governmental plan within the meaning
of § 414(d) of the Code or an applica-
ble collectively bargained plan, or (2) a
§ 403(b) plan that is not maintained by
a public school (as described in § 403(b)
(1)(A)(ii)), the deadline to amend for
provisions of the SECURE Act and the
regulations thereunder is the last day of
the first plan year beginning on or after
January 1, 2022. The plan amendment
deadline for a qualified § 414(d) govern-
mental plan or an applicable collectively
bargained plan, and a § 403(b) plan that
is maintained by a public school, as de-
scribed in § 403(b)(1)(A)(ii), is the last
day of the first plan year beginning on or
after January 1, 2024.
III. CONTENT AND ORGANIZATION
OF RA LIST
In general, an RA List includes statutory
and administrative changes in requirements
that are first effective during the plan year
in which the list is published.
3
However, an
RA List does not include guidance issued
or legislation enacted after the list has been
prepared and also does not include:
• Statutory changes in requirements
for which the Treasury Department
and the IRS expect to issue guidance
(which would be included on an RA
List issued in a future year);
• Changes in requirements that permit
(but do not require) optional plan
provisions, in contrast to changes in
requirements that cause existing plan
provisions (which may include op-
tional plan provisions previously ad-
opted) to become disqualifying pro-
visions or § 403(b) form defects;
4
or
• Changes in the tax laws affecting
qualified individually designed plans
or § 403(b) individually designed
plans that do not change the require-
ments under § 401(a) or § 403(b)
(such as changes to the tax treatment
of plan distributions, or changes to
2
The SECURE Act appears in Division O of the Further Consolidated Appropriations Act, 2020, Pub. L. 116-94, 133 Stat. 2534, which was enacted on December 20, 2019.
3
RA Lists also may include changes in requirements that were first effective in a prior year that were not included on a prior RA List under certain circumstances, such as changes in require-
ments that were issued or enacted after the prior year’s RA List was prepared.
4
The remedial amendment period and plan amendment deadline for discretionary changes to the terms of a qualified individually designed plan are governed by sections 5.05(2), 5.06(2),
and 8.02 of Rev. Proc. 2016-37. The remedial amendment period and plan amendment deadline for discretionary changes to the terms of a § 403(b) individually designed plan are governed
by sections 5.03(1)(b), 5.03(2)(b), and 6.02 of Rev. Proc. 2019-39. These deadlines for discretionary changes are not affected by the inclusion of a change in requirements on an RA List.

Bulletin No. 2020–50 1599 December 7, 2020
the funding requirements for quali-
fied individually designed plans).
The RA List is divided into two parts.
Part A covers changes in requirements that
generally would require an amendment to
most plans or to most plans of the type af-
fected by the change.
Part B includes changes in requirements
that the Treasury Department and the IRS
anticipate will not require amendments to
most plans, but might require an amend-
ment because of an unusual plan provi-
sion in a particular plan. For example, if
a change affects a particular requirement
that most plans incorporate by reference,
Part B would include the change because
a particular plan might not incorporate the
requirement by reference and, thus, might
include language inconsistent with the
change.
Annual, monthly, or other periodic
changes to (1) the various dollar limits
that are adjusted for cost of living in-
creases as provided in § 415(d) or other
Code provisions, (2) the spot segment
rates used to determine the applicable in-
terest rate under § 417(e)(3), and (3) the
applicable mortality table under § 417(e)
(3), are treated as included on the RA
List for the year in which such chang-
es are effective even though they are not
directly referenced on that RA List. The
Treasury Department and the IRS antic-
ipate that few plans have language that
will need to be amended on account of
these changes.
The fact that a change in a requirement
is included on the RA List does not mean
that a plan must be amended as a result
of that change. Each plan sponsor must
determine whether a particular change in
a requirement requires an amendment to
its plan.
IV. 2020 REQUIRED AMENDMENTS
LIST
Part A. Changes in requirements that
generally would require an amendment
to most plans or to most plans of the type
affected by the change.
• None
Part B. Other changes in requirements
that may require an amendment.
• Difficulty of care payments treated
as compensation for retirement con-
tribution limitations (SECURE Act
section 116). SECURE Act section
116(b) adds § 415(c)(8) to the Code to
increase the annual additions limit for
retirement plans to take into account
difficulty of care payments, which are
defined in § 131(c). Section 415(c)(8)
(A) provides that a participant’s com-
pensation for purposes of § 415(c)(1)
is increased by the amount of difficulty
of care payments. Plans that are main-
tained by employers that have provid-
ed difficulty of care payments during
plan years beginning after December
31, 2015, and before January 1, 2021,
must be amended by December 31,
2022 or, if later, the SECURE Act sec-
tion 601 date applicable to the plan, as
set forth in section G of Notice 2020-
68. If an employer changes its practice
and begins to make difficulty of care
payments to its employees in future
years, the plan must be amended to in-
clude difficulty of care payments in the
definition of § 415(c)(1) compensation
by the end of the second calendar year
following the calendar year in which
the employer begins to make difficulty
of care payments.
5
Note: See also section E of Notice
2020-68, which provides questions
and answers related to SECURE Act
section 116.
• Application of cooperative and small
employer charity pension plan rules to
certain charitable employers (CARES
Act section 3609). CARES Act sec-
tion 3609 adds § 414(y)(1)(D) to the
Code. Section 414(y)(1)(D) provides
that a cooperative and small employ-
er charity pension plan (CSEC plan)
is defined to include a defined benefit
plan that, as of January 1, 2000, was
maintained by a tax-exempt employ-
er that met specific characteristics. A
CSEC plan as defined in § 414(y) is
not permitted to include the benefit
restrictions of § 436.
V. DRAFTING INFORMATION
The principal author of this notice is
Angelique Carrington of the Office of
Associate Chief Counsel (Employee Ben-
efits, Exempt Organizations, and Em-
ployment Taxes). For further information
regarding this notice, contact Ms. Car-
rington at (202) 317-4148 (not a toll-free
number).
Rev. Proc. 2020-51
SECTION 1. PURPOSE
This revenue procedure provides a safe
harbor allowing a taxpayer to claim a de-
duction in the taxpayer’s taxable year be-
ginning or ending in 2020 (2020 taxable
year) for certain otherwise deductible eli-
gible expenses, as defined in section 2.03
of this revenue procedure, if (1) the eligi-
ble expenses are paid or incurred during
the taxpayer’s 2020 taxable year, (2) the
taxpayer receives a loan (covered loan)
guaranteed under the Paycheck Protection
Program (PPP) authorized under section
7(a)(36) of the Small Business Act (15
U.S.C. 636(a)(36)), which at the end of
the taxpayer’s 2020 taxable year the tax-
payer expects to be forgiven in a taxable
year after the 2020 taxable year (subse-
quent taxable year), and (3) in a subse-
quent taxable year, the taxpayer’s request
for forgiveness of the covered loan is de-
nied, in whole or in part, or the taxpayer
decides never to request forgiveness of
the covered loan, as described in section
3 of this revenue procedure. A taxpayer
described in section 3.01 or 3.02 of this
revenue procedure may be able to deduct
some or all of the eligible expenses on
(1) the taxpayer’s timely filed, including
extensions, original income tax return or
information return, as applicable, for the
2020 taxable year; (2) an amended return
or an administrative adjustment request
(AAR) under section 6227 of the Inter-
nal Revenue Code (Code) for the 2020
taxable year, as applicable; or (3) the tax-
payer’s timely filed, including extensions,
original income tax return or information
5
Notice 2020-68, Q&A E-2, provides, in part, that if an employer does not make difficulty of care payments to its employees that are eligible to participate in the employer’s plan, then the
plan does not need to be amended to include difficulty of care payments in the plan’s definition of § 415(c)(1) compensation.

December 7, 2020 1600 Bulletin No. 2020–50
return, as applicable, for the subsequent
taxable year.
SECTION 2. BACKGROUND
.01 Sections 1102 and 1106 of the
Coronavirus Aid, Relief, and Economic
Security Act (CARES Act), Public Law
116-136, 134 Stat. 281, 286-93 (March 27,
2020), established the PPP as a new loan
program administered by the U.S. Small
Business Administration (SBA) as part of
its section 7(a) Loan Program (15 U.S.C.
636(a)) that was designed to assist small
businesses nationwide adversely impact-
ed by the COVID–19 emergency to pay
payroll costs and other eligible expenses.
See Business Loan Program Temporary
Changes; Paycheck Protection Program,
85 FR 20811 (April 15, 2020). Under
the PPP, the SBA is permitted to guaran-
tee the full principal amount of a covered
loan, defined by section 1102(a)(2) of the
CARES Act as a loan made under the PPP
during the covered period; a covered loan
may be forgiven under section 1106 of the
CARES Act.
.02 The covered period for making
covered loans refers to the period begin-
ning on February 15, 2020, and ending
on December 31, 2020 (covered period).
The covered period initially was to end on
June 30, 2020. See section 1102(a)(2) of
the CARES Act. The Paycheck Protection
Program Flexibility Act of 2020, Pub-
lic Law 116-142, 134 Stat. 641 (June 5,
2020), extended the end date of the cov-
ered period to December 31, 2020.
.03 An individual or entity that is eli-
gible to receive a covered loan (eligible
recipient) can receive forgiveness of the
full principal amount of the covered loan
up to an amount equal to the following
costs incurred and payments made during
the covered period: (1) payroll costs, (2)
interest on a covered mortgage obligation,
(3) any covered rent obligation payment,
and (4) any covered utility payment (eligi-
ble expenses). See section 1106(b) of the
CARES Act.
.04 Under section 1106(i) of the
CARES Act, for purposes of the Code,
“any amount which (but for [section
1106(i)]) would be includible in gross
income of the eligible recipient by rea-
son of forgiveness described in [section
1106](b) shall be excluded from gross in-
come.” Section 1106(i) of the CARES Act
excludes the amount from gross income
regardless of whether the amount would
be (1) income from the discharge of in-
debtedness under section 61(a)(11) of the
Code, or (2) otherwise includible in gross
income under section 61.
.05 Section 161 of the Code provides
that, in computing taxable income under
section 63 of the Code, certain deductions
are allowed.
.06 Revenue Ruling 2020-27, 2020-
50 IRB 1552 (Dec. 7, 2020), holds that
a taxpayer computing taxable income on
the basis of a calendar taxable year may
not deduct eligible expenses in its 2020
taxable year if, at the end of the 2020 tax-
able year, the taxpayer has a reasonable
expectation of reimbursement in the form
of covered loan forgiveness on the basis
of the eligible expenses it paid or accrued
during the covered period (citing Burnett
v. Commissioner, 356 F. 2d 755 (5th Cir.
1966) cert. denied 385 U.S. 832 (1966);
Canelo v. Commissioner, 53 T.C. 217,
225-226 (1969), aff ’d 447 F.2d 484 (9th
Cir.1971); Herrick v. Commissioner, 63
T.C. 562 (1975); Silverton v. Commission-
er, T.C. Memo. 1977-198 (1977)). Reve-
nue Ruling 2020-27 alternatively relies on
section 265(a)(1) of the Code and §1.265-
1 of the Income Tax Regulations, which
provide that no deduction is allowed for
any amount otherwise allowable as a de-
duction to the extent the amount is alloca-
ble to one or more classes of income oth-
er than interest wholly exempt from the
taxes imposed by subtitle A of the Code.
See generally section 265(a)(1); §1.265-
1. This rule applies “whether or not any
amount of income of that class or classes
is received or accrued.” Id.
SECTION 3. TAXPAYERS ELIGIBLE
FOR SAFE HARBOR
Taxpayers who meet the requirements
of section 3.01 or 3.02 of this revenue pro-
cedure and comply with the requirements
of section 4 of this revenue procedure are
eligible for the safe harbor procedures
provided in sections 4.01 or 4.02 of this
revenue procedure, as applicable.
.01 A taxpayer meets the requirements
of this section 3.01 if:
(1) The taxpayer paid or incurred el-
igible expenses in the 2020 taxable year
for which no deduction is permitted be-
cause at the end of the 2020 taxable year
the taxpayer reasonably expects to receive
forgiveness of the covered loan based on
those eligible expenses (non-deducted eli-
gible expenses);
(2) The taxpayer submitted before the
end of the 2020 taxable year, or as of the
end of the 2020 taxable year intends to
submit in a subsequent taxable year, an
application for covered loan forgiveness
to the lender; and
(3) In a subsequent taxable year, the
lender notifies the taxpayer that forgive-
ness of all or part of the covered loan is
denied.
.02 A taxpayer meets the requirements
of this section 3.02 if:
(1) The taxpayer meets the require-
ments of section 3.01(1) and (2) of this
revenue procedure; and
(2) In a subsequent taxable year, the
taxpayer irrevocably decides not to seek
forgiveness for some or all of the covered
loan. For example, a taxpayer that deter-
mines that it will not qualify for covered
loan forgiveness and withdraws the appli-
cation submitted to the lender as described
in section 3.01.
SECTION 4. SAFE HARBOR
PROCEDURES
A taxpayer described in section 3.01 or
3.02 of this revenue procedure may use the
safe harbor procedures provided in section
4.01 or 4.02 of this revenue procedure.
.01 Safe harbor for deductions to be
claimed in 2020 taxable year. A taxpayer
described in section 3.01 or 3.02 of this
revenue procedure who satisfies the re-
quirements of section 4.03 and 4.04 of this
revenue procedure may deduct non-de-
ducted eligible expenses on the taxpayer’s
timely filed, including extensions, original
income tax return or information return,
as applicable, for the 2020 taxable year,
or amended return or AAR under section
6227 of the Code for the 2020 taxable
year, as applicable.
.02 Safe harbor for deductions to be
claimed in subsequent taxable year. A
taxpayer described in section 3.01 or 3.02
of this revenue procedure who satisfies
the requirements of section 4.03 and 4.04
of this revenue procedure, may deduct
non-deducted eligible expenses on the tax-

Bulletin No. 2020–50 1601 December 7, 2020
payer’s timely filed, including extensions,
original income tax return or information
return, as applicable, for the subsequent
taxable year referenced in section 3.01 or
3.02 of this revenue procedure. Taxpayers
described in section 3.01 of this revenue
procedure may, but do not need to, use this
safe harbor to deduct non-deducted eligi-
ble expenses in a subsequent taxable year
because those taxpayers may deduct the
non-deducted eligible expenses in the year
that the loan forgiveness is denied under
general tax principles, assuming that the
taxpayer does not elect to the use the safe
harbor in section 4.01 of this revenue pro-
cedure.
.03 Limitation on amount of deduction
for eligible expenses. A taxpayer apply-
ing section 4.01 or 4.02 of this revenue
procedure may not deduct an amount of
non-deducted eligible expenses in excess
of the principal amount of the taxpayer’s
covered loan for which forgiveness was
denied or will no longer be sought.
.04 Statement. A taxpayer may not ap-
ply the safe harbor procedures in section
4.01 or 4.02 of this revenue procedure to
deduct any amount of non-deducted eligi-
ble expenses unless the taxpayer attach-
es the statement described in this section
4.04 to the return on which the taxpayer
deducts non-deducted eligible expenses.
The statement must be titled “Revenue
Procedure 2020-51 Statement,” and must
include:
(1) The taxpayer’s name, address, and
social security number or employer iden-
tification number;
(2) A statement specifying whether the
taxpayer is an eligible taxpayer under ei-
ther section 3.01 or section 3.02 of Reve-
nue Procedure 2020-51;
(3) A statement that the taxpayer is ap-
plying section 4.01 or section 4.02 of Rev-
enue Procedure 2020-51;
(4) The amount and date of disburse-
ment of the taxpayer’s covered loan;
(5) The total amount of covered loan
forgiveness that the taxpayer was denied
or decided to no longer seek;
(6) The date the taxpayer was denied
or decided to no longer seek covered loan
forgiveness; and
(7) The total amount of eligible ex-
penses and non-deducted eligible expens-
es that are reported on the return.
.05 Additional limitations. Nothing in
this revenue procedure precludes the IRS
from examining other issues relating to
the claimed deductions for non-deducted
eligible expenses, including the amount
of the deduction and whether the tax-
payer has substantiated the deduction
claim. It also does not preclude the IRS
from requesting additional information or
documentation verifying any amounts de-
scribed in the statement described in sec-
tion 4.04 of this revenue procedure.
SECTION 5. EFFECTIVE DATE
This revenue procedure is effective for
taxable years beginning or ending in 2020.
SECTION 6. PAPERWORK
REDUCTION ACT
.01 This revenue procedure provides
procedures by which taxpayers described
in section 3.01 or 3.02 of this revenue
procedure are eligible for the safe har-
bor provided in section 4 of this revenue
procedure. Taxpayers taking advantage of
this revenue procedure must file a state-
ment as described in section 4.04 of this
revenue procedure with their income tax
return or information return. The collec-
tion of information will be associated
with the income tax returns or informa-
tion statements to which the statement
will be attached. That collection of infor-
mation has been reviewed and approved
by the Office of Management and Bud-
get in accordance with the Paperwork
Reduction Act (44 U.S.C. 3507) under
control number 1545–0123 for business
filers (https://www.federalregister.gov/
documents/2018/10/09/2018-21846/pro-
posed-collection-comment-request-for-
forms-1065-1065-b-1066-1120-1120-c-
1120-f-1120-h-1120-nd) and 1545-074
for individual filers (https://www.regin-
fo.gov/public/do/PRAViewICR?ref_
nbr=201808-1545-031).
.02 This information is required to be
collected and retained for compliance pur-
poses, namely, to determine whether the
taxpayer has made a decision to use the
safe harbor, to determine that the amount
claimed on the return is correct, and to en-
sure that any future action that is incon-
sistent with the decision to use the safe
harbor is handled correctly, potentially by
application of equitable estoppel and/or
the doctrine of consistency.
.03 The Treasury Department and the
IRS estimate that the maximum number
of respondents would be 5,212,128. This
number was determined by examining
the PPP data for the total number of ap-
proved covered loans. See https://www.
sba.gov/funding-programs/loans/coro-
navirus-relief-options/paycheck-protec-
tion-program?utm_medium=email&utm_
source=govdelivery#section-header-11.
This data is currently correct through Au-
gust 8, 2020. Because some taxpayers will
not decide to use the safe harbor in this
revenue procedure, the number of estimat-
ed respondents is on the high end of the
estimate.
.04 The maximum estimated number
of respondents is 5,212,128. The esti-
mated annual burden per respondent/re-
cordkeeper varies from 0 to 30 minutes,
depending on individual circumstances,
with an estimated average of 15 minutes.
The estimated total annual reporting and/
or recordkeeping burden is 1,303,032
hours (5,212,128 respondents * 15 min-
utes). The estimated annual cost burden
to respondents is $95 per hour. Accord-
ingly, we expect the total annual cost bur-
den for the statements to be $123,788,040
(5,212,128 * 0.25 * $95). The estimated
annual frequency of responses is once be-
cause the statement only has to be filed
once.
SECTION 7. DRAFTING
INFORMATION
The principal authors of this revenue
procedure are Sarah Daya and Charles
Gorham of the Office of Associate Chief
Counsel (Income Tax & Accounting). For
further information regarding this revenue
procedure, contact Ms. Daya at (202) 317-
4891 (not a toll-free number).

Bulletin No. 2020–50 i December 7, 2020
Definition of Terms
Revenue rulings and revenue procedures
(hereinafter referred to as “rulings”) that
have an effect on previous rulings use the
following defined terms to describe the
effect:
Amplified describes a situation where
no change is being made in a prior pub-
lished position, but the prior position is
being extended to apply to a variation of
the fact situation set forth therein. Thus, if
an earlier ruling held that a principle ap-
plied to A, and the new ruling holds that
the same principle also applies to B, the
earlier ruling is amplified. (Compare with
modified, below).
Clarified is used in those instances
where the language in a prior ruling is be-
ing made clear because the language has
caused, or may cause, some confusion. It
is not used where a position in a prior rul-
ing is being changed.
Distinguished describes a situation
where a ruling mentions a previously pub-
lished ruling and points out an essential
difference between them.
Modified is used where the substance
of a previously published position is being
changed. Thus, if a prior ruling held that a
principle applied to A but not to B, and the
new ruling holds that it applies to both A
and B, the prior ruling is modified because
it corrects a published position. (Compare
with amplified and clarified, above).
Obsoleted describes a previously pub-
lished ruling that is not considered deter-
minative with respect to future transactions.
This term is most commonly used in a ruling
that lists previously published rulings that
are obsoleted because of changes in laws or
regulations. A ruling may also be obsoleted
because the substance has been included in
regulations subsequently adopted.
Revoked describes situations where the
position in the previously published ruling
is not correct and the correct position is
being stated in a new ruling.
Superseded describes a situation where
the new ruling does nothing more than
restate the substance and situation of a
previously published ruling (or rulings).
Thus, the term is used to republish under
the 1986 Code and regulations the same
position published under the 1939 Code
and regulations. The term is also used
when it is desired to republish in a single
ruling a series of situations, names, etc.,
that were previously published over a
period of time in separate rulings. If the
new ruling does more than restate the sub-
stance of a prior ruling, a combination of
terms is used. For example, modified and
superseded describes a situation where the
substance of a previously published ruling
is being changed in part and is continued
without change in part and it is desired to
restate the valid portion of the previous-
ly published ruling in a new ruling that is
self contained. In this case, the previously
published ruling is first modified and then,
as modified, is superseded.
Supplemented is used in situations in
which a list, such as a list of the names of
countries, is published in a ruling and that
list is expanded by adding further names
in subsequent rulings. After the original
ruling has been supplemented several
times, a new ruling may be published that
includes the list in the original ruling and
the additions, and supersedes all prior rul-
ings in the series.
Suspended is used in rare situations to
show that the previous published rulings
will not be applied pending some future
action such as the issuance of new or
amended regulations, the outcome of cas-
es in litigation, or the outcome of a Ser-
vice study.
Abbreviations
The following abbreviations in current use
and formerly used will appear in material
published in the Bulletin.
A—Individual.
Acq.—Acquiescence.
B—Individual.
BE—Beneficiary.
BK—Bank.
B.T.A.—Board of Tax Appeals.
C—Individual.
C.B.—Cumulative Bulletin.
CFR—Code of Federal Regulations.
CI—City.
COOP—Cooperative.
Ct.D.—Court Decision.
CY—County.
D—Decedent.
DC—Dummy Corporation.
DE—Donee.
Del. Order—Delegation Order.
DISC—Domestic International Sales Corporation.
DR—Donor.
E—Estate.
EE—Employee.
E.O.—Executive Order.
ER—Employer.
ERISA—Employee Retirement Income Security Act.
EX—Executor.
F—Fiduciary.
FC—Foreign Country.
FICA—Federal Insurance Contributions Act.
FISC—Foreign International Sales Company.
FPH—Foreign Personal Holding Company.
F.R.—Federal Register.
FUTA—Federal Unemployment Tax Act.
FX—Foreign corporation.
G.C.M.—Chief Counsel’s Memorandum.
GE—Grantee.
GP—General Partner.
GR—Grantor.
IC—Insurance Company.
I.R.B.—Internal Revenue Bulletin.
LE—Lessee.
LP—Limited Partner.
LR—Lessor.
M—Minor.
Nonacq.—Nonacquiescence.
O—Organization.
P—Parent Corporation.
PHC—Personal Holding Company.
PO—Possession of the U.S.
PR—Partner.
PRS—Partnership.
PTE—Prohibited Transaction Exemption.
Pub. L.—Public Law.
REIT—Real Estate Investment Trust.
Rev. Proc.—Revenue Procedure.
Rev. Rul.—Revenue Ruling.
S—Subsidiary.
S.P.R.—Statement of Procedural Rules.
Stat.—Statutes at Large.
T—Target Corporation.
T.C.—Tax Court.
T.D.—Treasury Decision.
TFE—Transferee.
TFR—Transferor.
T.I.R.—Technical Information Release.
TP—Taxpayer.
TR—Trust.
TT—Trustee.
U.S.C.—United States Code.
X—Corporation.
Y—Corporation.
Z—Corporation.

December 7, 2020 ii Bulletin No. 2020–50
Numerical Finding List
1
Bulletin 2020–50
Announcements:
2020-8, 2020-32 I.R.B. 244
2020-9, 2020-32 I.R.B. 244
2020-10, 2020-33 I.R.B. 385
2020-11, 2020-33 I.R.B. 385
2020-13, 2020-35 I.R.B. 492
2020-14, 2020-36 I.R.B. 549
2020-15, 2020-38 I.R.B. 577
2020-16, 2020-38 I.R.B. 578
2020-17, 2020-40 I.R.B. 794
2020-12, 2020-41 I.R.B. 893
2020-40, 2020-45 I.R.B. 999
2020-47, 2020-19 I.R.B. 1070
Notices:
2020-43, 2020-27 I.R.B. 1
2020-45, 2020-27 I.R.B. 3
2020-46, 2020-27 I.R.B. 7
2020-47, 2020-27 I.R.B. 7
2020-49, 2020-27 I.R.B. 8
2020-50, 2020-28 I.R.B. 35
2020-48, 2020-29 I.R.B. 72
2020-51, 2020-29 I.R.B. 73
2020-52, 2020-29 I.R.B. 79
2020-53, 2020-30 I.R.B. 151
2020-54, 2020-31 I.R.B. 226
2020-56, 2020-32 I.R.B. 239
2020-57, 2020-32 I.R.B. 240
2020-58, 2020-34 I.R.B. 419
2020-55, 2020-35 I.R.B. 467
2020-61, 2020-35 I.R.B. 468
2020-62, 2020-35 I.R.B. 476
2020-63, 2020-35 I.R.B. 491
2020-60, 2020-36 I.R.B. 514
2020-64, 2020-36 I.R.B. 519
2020-65, 2020-38 I.R.B. 567
2020-68, 2020-38 I.R.B. 567
2020-69, 2020-39 I.R.B. 604
2020-59, 2020-40 I.R.B. 782
2020-66, 2020-40 I.R.B. 785
2020-71, 2020-40 I.R.B. 786
2020-72, 2020-40 I.R.B. 789
2020-73, 2020-41 I.R.B. 886
2020-74, 2020-41 I.R.B. 887
2020-70, 2020-43 I.R.B. 913
2020-77, 2020-45 I.R.B. 988
2020-79, 2020-46 I.R.B. 1014
2020-76, 2020-47 I.R.B. 1058
2020-80, 2020-47 I.R.B. 1060
2020-75, 2020-49 I.R.B. 1453
2020-82, 2020-49 I.R.B. 1458
2020-82, 2020-49 I.R.B. 1458
2020-83, 2020-50 I.R.B. 1497
Proposed Regulations:
REG-119307-19, 2020-28 I.R.B. 44
REG-112339-19, 2020-30 I.R.B. 155
REG-117589-18, 2020-30 I.R.B. 184
REG-125716-18, 2020-30 I.R.B. 197
REG-123027-19, 2020-31 I.R.B. 229
REG-130081-19, 2020-32 I.R.B. 246
REG-127732-19, 2020-33 I.R.B. 385
REG-111879-20, 2020-34 I.R.B. 421
REG-112042-19, 2020-34 I.R.B. 422
REG-132766-18, 2020-34 I.R.B. 436
REG-132434-17, 2020-35 I.R.B. 508
REG-116475-19, 2020-37 I.R.B. 553
REG-107911-18, 2020-40 I.R.B. 795
REG-110059-20, 2020-42 I.R.B. 904
REG-119890-18, 2020-47 I.R.B. 1063
REG-122462-20, 2020-48 I.R.B. 1137
REG-101657-20, 2020-49 I.R.B. 1466
Revenue Procedures:
2020-16, 2020-27 I.R.B. 10
2020-31, 2020-27 I.R.B. 12
2020-35, 2020-29 I.R.B. 82
2020-36, 2020-32 I.R.B. 243
2020-37, 2020-33 I.R.B. 381
2020-38, 2020-36 I.R.B. 522
2020-39, 2020-36 I.R.B. 546
2020-40, 2020-38 I.R.B. 575
2020-41, 2020-40 I.R.B. 793
2020-42, 2020-41 I.R.B. 891
2020-43, 2020-45 I.R.B. 991
2020-44, 2020-45 I.R.B. 991
2020-46, 2020-45 I.R.B. 995
2020-45, 2020-46 I.R.B. 1016
2020-47, 2020-48 I.R.B. 1121
2020-49, 2020-48 I.R.B. 1122
2020-50, 2020-48 I.R.B. 1122
2020-48, 2020-49 I.R.B. 1459
2020-51, 2020-50 I.R.B. 1599
Revenue Rulings:
2020-14, 2020-28 I.R.B. 33
2020-15, 2020-32 I.R.B. 233
2020-16, 2020-37 I.R.B. 550
2020-17, 2020-37 I.R.B. 552
2020-18, 2020-39 I.R.B. 584
2020-19, 2020-40 I.R.B. 611
2020-20, 2020-41 I.R.B. 880
2020-21, 2020-41 I.R.B. 882
2020-22, 2020-45 I.R.B. 963
2020-24, 2020-45 I.R.B. 965
2020-23, 2020-47 I.R.B. 1028
2020-25, 2020-48 I.R.B. 1109
2020-26, 2020-50 I.R.B. 1550
2020-27, 2020-50 I.R.B. 1552
Treasury Decisions:
9899, 2020-29 I.R.B. 62
9900, 2020-30 I.R.B. 143
9903, 2020-32 I.R.B. 235
9901, 2020-33 I.R.B. 266
9902, 2020-33 I.R.B. 349
9904, 2020-34 I.R.B. 413
9907, 2020-38 I.R.B. 559
9906, 2020-39 I.R.B. 579
9905, 2020-40 I.R.B. 614
9915, 2020-41 I.R.B. 882
9908, 2020-42 I.R.B. 894
9920, 2020-43 I.R.B. 909
9910, 2020-44 I.R.B. 915
9924, 2020-44 I.R.B. 943
9911, 2020-45 I.R.B. 966
9913, 2020-45 I.R.B. 975
9927, 2020-47 I.R.B. 1031
9918, 2020-45 I.R.B. 979
9914, 2020-46 I.R.B. 1000
9919, 2020-48 I.R.B. 1073
9931, 2020-48 I.R.B. 1087
9922, 2020-49 I.R.B. 1139
9929, 2020-49 I.R.B. 1220
9930, 2020-49 I.R.B. 1400
9923, 2020-50 I.R.B. 1554
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2019–27 through 2019–52 is in Internal Revenue Bulletin
2019–52, dated December 27, 2019.

Bulletin No. 2020–50 iii December 7, 2020
Finding List of Current Actions on
Previously Published Items
1
Bulletin 2020–50
1
A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2019–27 through 2019–52 is in Internal Revenue Bulletin
2019–52, dated December 27, 2019.

Internal Revenue Service
Washington, DC 20224
Official Business
Penalty for Private Use, $300
INTERNAL REVENUE BULLETIN
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