 The Stephen Beck, Jr., Achieving a Better Life Experience Act (ABLE) Act was signed into federal law in 2014 and allows eligible individuals with disabilities the ability to establish “ABLE accounts'' that are similar to college savings “529 accounts" with the ability to spend contributions much more broadly than just education.
The new tax-free ABLE accounts will allow more individual choice and control over spending on qualified disability expenses and limited investment decisions, while protecting eligibility for Medicaid (Medi-Cal in California), SSI and other important government benefits for people with disabilities. Contributions to an ABLE account, currently limited to $14,000 per year, can be made by family, friends, or the beneficiary themselves. The account’s earnings are allowed to accumulate tax-free, and the withdrawals, provided they are applied to qualifying disability expenses, are tax-free. Each state has the ability to set up their own ABLE program, and California's version, called CalABLE, is in development and is expected to open the summer of 2017. For more details, go the CA State Treasurer's website on CalABLE at http://treasurer.ca.gov/able/. You also have the option of opening an account in another state. Currently, ABLE programs are operating in a number of states, including Oregon, Michigan, Ohio, Virginia and Florida. For more information, go to the website of the National Resource Center for the ABLE Act at http://www.ablenrc.org/. |
