“The ABLE Act, which was signed into law in December 2014, allows Americans who are living with disabilities to save money for college and other expenses in a tax-deferred account as a supplement to private insurance and public benefits.

529 ABLE (529A) accounts

Similar to a529 college savings plan, 529 ABLE accounts are savings accounts administered by the states. Money can be withdrawn tax-free when the funds are used to pay for qualified disability expenses. The contribution for 2018 is $15,000 (the amount of the annual gift tax exclusion) and many states have total contribution limits that exceed $300,000.

However, if a person’s 529 ABLE account balance exceeds $100,000 they will no longer be eligible for SSI benefits. Also, if the beneficiary dies, states will be able to recoup some of the expenses through Medicaid.

The signing of the PATH Act in 2015 removed residency requirements from 529 ABLE accounts, giving individuals the option of using any state’s plan. Yet some states may offer tax benefits for those who use their home state’s plan.”

To read more, click here.

Pin It on Pinterest

Share This

Share This!

Share this post now with your friends.