What is an ABLE Account?
ABLE Accounts are savings accounts for people with disabilities/Deaf and their families. The passage of the Stephen Beck Jr., Achieving a Better Life Experience Act of 2014, or the ABLE Act, provides the opportunity to save money beyond typical resource limits.
Several thousand Idahoans with disabilities and their families depend on public benefits for health care, food, utility and housing assistance. ABLE accounts allow eligible Idahoans to save money to purchase qualified disability goods and services that will help them gain independence and choice without losing the assistance they need.
ABLE Accounts are savings/investment accounts for people with disabilities/deaf and their families. ABLE accounts provide the opportunity to save money and keep needed benefits.
- The beneficiary of the account owns the account.
- Income earned by the accounts will not be Federally taxed.
- Contributions to the account made by any person (the account owner, family and friends) will be made using post-taxed dollars and will not be tax deductible. Some states allow for state income tax deductions for contribution made to an ABLE account.
- Idaho does not offer a state income tax deduction.
- Money in an ABLE account does not count against the resource limits for SSI, Medicaid and other State and Federal benefits.
Anyone who has a significant disability with a documented onset before turning 26 years of age is eligible to open an ABLE account.
- They have a disability with functional limitations documented by a physician with letter of certification.
- They receive Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI).
- They are medically eligible for SSI or SSDI benefits, i.e. certain disabled children or working adults with disabilities who receive Medicaid benefits.
An ABLE account may provide more choice and control for the beneficiary and their family.
- The cost of establishing an account will be less than Special Needs or Pooled Income Trusts.
- Some programs offer investment and saving options, allowing greater flexibility for growth.
- Determining which option is the best for you will depend upon your individual circumstances.
- A person can have both an ABLE account AND a trust.
- The total annual contributions by all individuals, including family and friends, for a single tax year is $14,000 (amount will be adjusted for inflation).
- $14,000 is the maximum amount a person may gift another person without reporting it to the IRS (gift tax exclusion).
Limitations for SSI and other public benefits
- The first $100,000 in an ABLE account is exempt from the SSI $2,000 individual resource limit.
- When an ABLE account balance exceeds $100,000, the beneficiary’s SSI cash benefit (and likely other public benefits) will be stopped until the account falls back below $100,000.
- While the beneficiary's SSI cash benefit is suspended there is no loss of Medicaid eligibility or services.
- When an ABLE account owner passes away the state Medicaid program may file a claim against the account to reclaim Medicaid related expenses.
- A qualified disability expense is any expense related to an individual as a result of living with a disability.
- Any other expenses which help improve health, independence and quality of life.
Qualified Disability Expenses
- Employment training and support
- Assistive Technology (ramps, computer software, eye glasses and more)
- Personal Assistant Services
- Health care expenses (not covered by insurance)
- Financial management and administrative services
- Basic living expenses: Currently the IRS has ruled that basic living expenses, including food, clothing and utilities also qualify.
It is important to note that ALL expenses must be paid directly from the ABLE account. Transferring funds to a personal account will result in exceeding resource limits.
Several states have opened ABLE programs that allow eligible individuals nationwide to open an ABLE account regardless of where they live. When comparing State ABLE programs, you may want to consider the following questions to find the best one for you:
Opening an Account
- What proof will the ABLE program need from you in order to open an account?
- What proof will you need to show that your disbursements are qualified expenses?
- Is there a minimum contribution to open an ABLE account?
- Is there a fee to open an account? If so, how much is that fee?
Maintaining the Account and Fees
- Is there a required minimum contribution to your account? If so, what is the amount?
- Are the fees paid up front or are they reduced if you leave your money invested for several years?
- Are there restrictions on how often you can withdraw money from your account?
- What investment options does the state ABLE program offer?
- Will the options available meet your needs regarding growth, while limiting the risk you are willing to take with contributions to your ABLE account?
- Does the state program offer incentives or additional benefits (such as a match or a rewards program, or financial literacy information for account holders) to help you save, contribute to your account, grow the account, and manage your invested dollars? If so, what is it? Most important, do you understand it?
Idaho does NOT offer an ABLE account program at this time. You may sign up for an out of state program if that state offers out of state enrollment. Currently there are 28 different programs with 21 open to out of state enrollment. Programs are being added all the time so don't forget to check back frequently.
State programs currently accepting out of state enrollment:
- District of Columbia
- North Carolina
- Rhode Island
- Arizona - Winter 2017
- Arkansas - October 2017
- Maine - Fall 2017
- Maryland - Fall 2017
- Mississippi - July 2018
- Oklahoma - Winter 2017
- Washington - Fall 2017
For help on which states are offering programs and information about these programs, contact the Idaho State Independent Living Council (SILC) for ABLE information and technical assistance.
DON’T WAIT! Start today by calling the Idaho SILC. Ask for ABLE Technical Assistance and Information.
SILC Technical Assistance
Starting July 1, 2017 the State Independent Living Council (SILC) will have an ABLE Program Specialist who will provide Technical Assistance, information and Financial Literacy training. Any questions that you have regarding ABLE accounts can be directed to the Idaho State Independent Living Council.
Contact us at:
Address: 380 S. 4th St., Ste. 102
Boise, Idaho 83702