posted by Eric Schutzbank
Achieving a Better Life Experience (ABLE) became law in December 2014. Similar to the 529 college saving plans, ABLE allows people with disabilities and their families to put aside funds for disability-related costs. Set up by the state and administered through financial institutions, the income from qualified 529A Accounts for Disabled Individuals accrues tax-free.
The law defines qualified individuals as those eligible for benefits under the Social Security Act title II or XVI. In addition, if a physician has diagnosed blindness, medical or mental disability causing significant impairment to an individual aged 26 or younger and the condition has existed or will exist for at least one year or is likely to end in death, the individual has eligibility.
Depending on state law, the qualified accounts cannot exceed an annual limit of $14,000 although individuals can set-up their account in any state offering 529A plans. States may allow contributions as a tax deduction but federal law does not. Anyone can contribute money which normally qualifies as a tax-free gift. As long as the total ABLE account does not exceed $100,000, the individual remains eligible for SSI benefits, a change from the previous means-tested limit of $2,000. [Read more…]