The amount that can be deposited in an ABLE account each year without jeopardizing public benefits will rise from the current $14,000 to $15,000 starting in 2018.
The increase makes these accounts that much more attractive as a way for people with disabilities to shield gifts or income or even use as an alternative to a special needs trust in the right circumstances. The amount that can be deposited in an ABLE account is tied to the federal gift tax exclusion, which will rise from $14,000 to $15,000 in 2018 due to inflation.
Created by Congress via the passage of the Achieving a Better Life Experience (ABLE) Act in 2014 and modeled after popular 529 college savings accounts, ABLE accounts allow people with disabilities and their families to save up to $100,00.00 in accounts for disability related expenses without jeopardizing their eligibility for Medicaid, Supplemental Security Income (SSI), and other government benefits. Funds in the tax-free savings accounts can be used to pay for qualifying expenses such as the costs of treating the disability or for education, housing and health care, among other things. ABLE accounts may be opened by anyone with a disability as long as the disability began before the person turned 26.
Like the 529 savings plans on which they are patterned, ABLE programs are set up by the individual states, although so far most state plans are welcoming the participation of residents of any state. Twenty-nine states and the District of Columbia now have ABLE programs, according to the ABLE Resource Center.
Article Last Modified: 11/28/2017
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