{"id":22152,"date":"2016-09-27T18:55:09","date_gmt":"2016-09-27T18:55:09","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/newsroom\/path-act-improving-tax-benefits-for-saving-for-education-retirement-and-living-with-disabilities\/"},"modified":"2023-03-01T13:40:06","modified_gmt":"2023-03-01T19:40:06","slug":"path-act-tax-savings-and-benefits","status":"publish","type":"newsroom","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/","title":{"rendered":"PATH Act: Improving Tax Benefits for Saving for Education, Retirement and Living with Disabilities"},"content":{"rendered":"<h3 class=\"title_summary\">Summary<\/h3>\n<div class=\"text_summary\">\n<ul>\n<li>This continues the H&amp;R Block newsroom\u2019s series on the Protecting Americans from Tax Hikes (PATH) Act, which made dozens of changes to the tax code. The PATH Act series covers its&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-new-permanent-taxable-benefits\/\">permanent extensions of many tax benefits<\/a>, the&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/itin-holders-required-to-renew\/\">renewal requirements for Individual Taxpayer Identification Numbers (ITINs)<\/a>,&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-enforces-new-rules\/\">eligibility changes for certain tax credits<\/a>,&nbsp;its&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\">expansion&nbsp;of other tax benefits<\/a>, its increasing cost of making mistakes, its impact on small business and its delay of millions of refunds until February 15.p<\/li>\n<li>The&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-center\/media-kit\/path-act-tax-impact\/\">PATH Act tax impact<\/a>&nbsp;resource guide provides information to help media and consumers.<\/li>\n<\/ul>\n<\/div>\n<p>The Protecting Americans from Tax Hikes (PATH) Act made dozens of changes to the tax code. A few of these changes expanded current tax benefits to make it easier for taxpayers to save for their education, retirement and the costs associated with living with disabilities.<\/p>\n<h2>Save for education with a 529 account<\/h2>\n<p><a href=\"https:\/\/www.hrblock.com\/tax-center\/filing\/personal-tax-planning\/qualified-tuition-plan\/\">Qualified tuition plans<\/a>, also known as 529 accounts, already grow tax free and allow tax-free distributions for qualified expenses. They may also have state income tax benefits, such as a deduction or credit for contributions. Parents, grandparents and even unrelated people can contribute to these accounts for future college students to use for qualified higher education expenses which include tuition, fees, books and room and board.<\/p>\n<p>The PATH Act expanded \u201cqualified higher education expenses\u201d to include computer equipment and technology. Half of college students will spend <a href=\"https:\/\/nrf.com\/media\/press-releases\/back-school-and-college-spending-reach-758-billion\">an estimated $11.54 billion on electronics for school<\/a>.<\/p>\n<p>\u201cThe cost of computers and technology is a rising share of education expenses, so this is a tax benefit that could help 529 account beneficiaries buy their computers and software for school,\u201d said Alison Flores, principal tax research analyst at The Tax Institute at H&amp;R Block. \u201cIt will also help students who don\u2019t have other qualifying expenses, like a student who lives at home and has a scholarship that covers tuition but not computer equipment.\u201d<\/p>\n<p>Another PATH Act change allows taxpayers 60 days to re-contribute a tuition distribution to a 529 account if their tuition payment is refunded.<\/p>\n<h2>Save for retirement with a SIMPLE rollover<\/h2>\n<p>SIMPLE plans are individual retirement accounts (IRAs) established by small employers. Compared to other employer plans, they typically have lower administrative costs and no annual reporting requirements. This helps small employers offer matching retirement savings to their employees. The PATH Act allows taxpayers to rollover funds from other employer-sponsored retirement plans, such as a 401(k) plans, to a SIMPLE plan if the plan has existed for at least two years.<\/p>\n<p>\u201cTaxpayers may want to consolidate their retirement accounts for a number of reasons, but they have to be careful how they do it,\u201d said Flores. \u201cIf they don\u2019t execute a rollover correctly, they could incur a tax on the \u2018distribution\u2019 or exceed their contribution limit.\u201d<\/p>\n<h2>Save for living with disabilities in any state in the country<\/h2>\n<p>Individuals who have been certified as disabled and their families also have a tax-advantaged way to save and pay for the costs of living with a disability by opening and contributing to an ABLE account. Similar to a qualified tuition plan, ABLE accounts grow tax free and funds used to pay for qualified expenses are distributed tax free. The accounts may have state income tax benefits as well.<\/p>\n<p>The PATH Act eliminated the requirement that the ABLE account be located in the beneficiary\u2019s state of residency. This means taxpayers can set up an ABLE account in any state they want. As <a href=\"http:\/\/www.thearc.org\/what-we-do\/public-policy\/issues\/able-program-implementation\">ABLE programs<\/a> become available in more states, individuals with disabilities and their families will have the opportunity to select the plan that best suits their needs.<\/p>\n<p>Taxpayers can learn more about qualified tuition plans in <a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/p970.pdf\">IRS publication 970<\/a> or get more information about SIMPLE rollovers in the <a href=\"https:\/\/www.irs.gov\/retirement-plans\/simple-ira-plan-faqs-rollovers\">IRS FAQ<\/a>. To learn more about ABLE accounts, taxpayers can read Flores\u2019 <a href=\"https:\/\/www.thetaxinstitute.com\/achieving-a-better-life-experience\/\">Four things taxpayers need to know before opening an ABLE account<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Summary This continues the H&amp;R Block newsroom\u2019s series on the Protecting Americans from Tax Hikes (PATH) Act, which made dozens of changes to the tax code. The PATH Act series covers its&nbsp;permanent extensions of many tax benefits, the&nbsp;renewal requirements for Individual Taxpayer Identification Numbers (ITINs),&nbsp;eligibility changes for certain tax credits,&nbsp;its&nbsp;expansion&nbsp;of other tax benefits, its increasing [&hellip;]<\/p>\n","protected":false},"author":418,"featured_media":24521,"menu_order":0,"template":"","tags":[7320],"news-categories":[23363,23371],"class_list":["post-22152","newsroom","type-newsroom","status-publish","has-post-thumbnail","hentry","tag-path-act","news-categories-irs","news-categories-tax-law-and-policy"],"acf":{"post_rest_thumbnail_alt_id":null},"yoast_head":"<title>PATH Act: Tax Savings and Benefits | H&amp;R Block Newsroom<\/title>\n<meta name=\"description\" content=\"The PATH Act makes it easier for taxpayers to save for their education, retirement and the costs associated with living with disabilities.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"PATH Act: Improving Tax Benefits for Saving for Education, Retirement and Living with Disabilities\" \/>\n<meta property=\"og:description\" content=\"The PATH Act makes it easier for taxpayers to save for their education, retirement and the costs associated with living with disabilities.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\" \/>\n<meta property=\"og:site_name\" content=\"H&amp;R Block\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/hrblock\" \/>\n<meta property=\"article:modified_time\" content=\"2023-03-01T19:40:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358-1080x675.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1080\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@hrblock\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\",\"url\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\",\"name\":\"PATH Act: Tax Savings and Benefits | H&R Block Newsroom\",\"isPartOf\":{\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358.jpg\",\"datePublished\":\"2016-09-27T18:55:09+00:00\",\"dateModified\":\"2023-03-01T19:40:06+00:00\",\"description\":\"The PATH Act makes it easier for taxpayers to save for their education, retirement and the costs associated with living with disabilities.\",\"breadcrumb\":{\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/newsroom\/irs\/tax-law-and-policy\/path-act-tax-savings-and-benefits\/#primaryimage\",\"url\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358.jpg\",\"contentUrl\":\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/08\/164275358.jpg\",\"width\":1600,\"height\":1067,\"caption\":\"Young Caucasian family having debt problems not able to pay out their loan. 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