More States Opening ABLE Account Programs

July 5, 2017

There are now 21 states that have established their own ABLE account programs, allowing some people with disabilities an opportunity to save money while maintaining elibility for SSI and Medicaid. All other states and the District of Columbia have passed legislation authorizing ABLE programs and are at various stages of progress towards allowing deposits.

 

ABLE stands for “Achieving a Better Life Experience.” The ABLE Act became law in December 2014. It allows states to create savings plans called “529A” accounts, which have tax advantages if contributions are used for specific purposes relating to disability expenses. A person with a disability can save up to $100,000 in an ABLE account before it affects their eligibility for SSI. Balances over that level suspend SSI cash payments, but individuals may still be eligible for Medicaid. ABLE accounts are only available to people whose disability onset occurred before age 26.

 

Ohio opened the first ABLE account program in June 2016. The states that followed created programs that vary considerably in their design. Some programs, like Florida’s are only open to state residents, while others are available to all eligible individuals. Like the “529” tax-advantaged college savings plans on which they were based, ABLE accounts have a variety of account fees, investment options, maximum allowable balances, consequences for state taxes, and other policies.

 

The National Disability Institute manages an ABLE National Resource Center with data, archieved webinars, comparison tools, and other information about the ABLE Act and states’ ABLE plans (http:// http://www.ablenrc.org/). Information from that site and the documents of individual plans may help people considering ABLE accounts find the best plan for them. People with disabilities and their families may also wish to consider the relative merits of ABLE accounts and special needs trusts, and whether they would like to have both savings vehicles.

 

The states that currently offer ABLE programs are Alabama, Alaska, Florida, Illinois, Iowa, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Vermont, and Virginia.

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