In 2014, Congress passed what is known as the Achieving a Better Life Experience (ABLE) Act. The purpose of this act is to allow individuals with disabilities to save assets in their name without the risk of losing their disability benefits. These ABLE accounts are tax-advantaged accounts and any earnings on funds in a qualified ABLE account are tax free. Many states began offering these accounts shortly after the act’s passing in 2014. These accounts are currently available for qualified individuals in all of the states our law firm serves; Alabama, Mississippi and Tennessee.
ABLE Account FAQs
Here are a few frequently asked questions to help you understand your ABLE account:
Do You Qualify for an ABLE Account?
So how do you know if you qualify for an ABLE account? You are eligible to benefit from an ABLE account if you are blind or if the onset of your disability was prior to your 26th birthday and you are entitled to receive SSI or SSDI benefits. Another way to qualify is to have a certification from your doctor that you have a severe functional limitation diagnosed before age 26 that may result in death or expected to last for a time in excess of 12 months. In general, a minimum of $50 must be contributed to open an ABLE account.
Who Can Contribute to an ABLE Account?
If eligible, once you have an ABLE account established, anyone can contribute funds to the account. The account owner, or that person’s legal representative, remains in control of all funds not matter where they come from, family, friends, donations, estate planning, lawsuit proceeds, etc.
However, the total amount that may be contributed is currently $15,000 per year or possibly more if the owner of the account has earned income. The total amount that the owner may have in the account can vary by state. A balance in excess of $100,000 can impact SSI benefits. The limit amount is the same as the state’s limits on its section 529 plans.
What Can You Purchase with ABLE Account Funds?
Funds in an ABLE account may only be used to purchase “qualified disability-related expenses.” This covers any expenses that relates to maintenance of the qualified owner’s health and quality of life. It can include expenses such as housing, education, transportation, health care expenses, health care assistance and more.
How Many ABLE Accounts Can You Have?
A qualified individual may only have one ABLE account. If your state does not have an ABLE program yet, you can still enroll in a program in a different state. Many states accept out of state enrollment. You can learn more about these programs and what states offer them by visiting the ABLE National Resource Center.
Contact a Knowledgeable ABLE Account Lawyer
We have attorneys who are experienced in assisting disabled individuals with obtaining benefits from the initial stages through the appeal of a denial of benefits. If you feel you are qualified for disability benefits, please contact us at our office nearest you.