10 things to know about the ABLE Act

​1.    What is an ABLE Account?
ABLE Accounts are tax-advantaged savings accounts for individuals with disabilities.  Created as a result of the passage of the ABLE Act of 2014. Income earned by the accounts would not be taxed. Contributions to the account made by any person (the account beneficiary, family and friends) would not be tax deductible.

2. Why use an ABLE Account
The ABLE Act allows individuals who were deemed disabled before the age of 26 to save money in specific accounts and not jeopardize necessary government benefits. Before The ABLE Act was passed an individual with a disability who relied on government benefits like SSI and Medicaid could not save more than $2,000 or else they would lose health care benefits, as well as home and community supports which would mean they could lose housing as well as job supports which would also cause a loss of employment. The ABLE Act and the resulting ABLE Accounts provide individuals with a disability the same right to save money that those without disabilities have always enjoyed. 

​3. Who is eligible for an ABLE account?

1. Any person with a ‘significant’ disability who has become disabled before age 26.
2. ​  The disability must meet the disability requirements for Supplemental Security Income (SSI) or Social Security disability benefits.
3. OR a person  can submit a doctor’s letter that meets the criteria (essentially equal to Social Security “listings” level of disability), including a physician’s diagnosis.

Examples of qualifying disabilities may be but are not limited to:

• Disability from birth (i.e. cerebral palsy, blindness, chronic health condition)
• Developmental disability
• Acquired disability: traumatic injury, developed chronic illness, hearing loss, vision loss

4.     Are there limits to how much money can be put in an ABLE account?
Yes, $14,000/year can be contributed in total per year for people with disabilities who are not working.
Anybody can contribute, including family, friends, and individual account-holders
$14,000 limit is cumulative among all parties.  $14,000 is the maximum amount that individuals can make as a gift to someone else and not pay taxes (gift tax exclusion).
If the person with a disability receives Social Security Income (SSI) they can save up to $100,000 without the funds being counted as an limits.
If a person is not receiving SSI but is receiving Medicaid/Medi-Cal save up to $300,000 or more without losing their eligibility for the medical benefit.

5. Can an  ABLE beneficiary who is working contribute to their own ABLE account with some of their wages?
An ABLE beneficiary who is employed can contribute from his/her work wages up to the Federal Poverty Level (currently at $12,060) in addition to the existing $14,000 limit. The current Potential increase allowable annual contributions to $26,060 (for 2017 poverty levels. At the time this post is written.) 
·       Note: this would not affect existing caps on earned income and Substantial Gainful Activity , for Social Security income / Social Security Disability Insurance / Medicaid.

6. Which expenses are allowed by ABLE accounts?
Funds must be spent on “qualified disability-related expenses,” The categories are listed below:

• Education
• ​​Housing
• Transportation
• Employment training and support
• Adaptive equipment
• Health, prevention & wellness
• Financial management and oversight
• “Other Expenses Approved by the Treasury Regulations”

7. May I open more than one Able Account?
No. Under the rules of the Able Act a qualified person is only allowed one account.

8. What can I do if the state I live in does not currently have an ABLE program?
A person does not have to wait to open an ABLE account. An ABLE account can be opened in any state where there is an ABLE program running. To find a list of states with open ABLE programs go to ABLE National Resource Center ( As of this writing the states in blue have ABLE programs for your review.)

9. How Will I know Which State ABLE Program is Right for Me?
In order to compare ABLE plans go to the ABLE National Resource Center. Here you are able to compare up to three states at a time. When you are looking at different states and their ABLE plans you may wish to consider the following questions in order to find the ABLE account that works best for you. The following questions come from The ABLE National Resource Center website.
Upon Opening an Account
o    What proof will the ABLE program require for you to document in order to open an account or show that your disbursements are qualified expenses?
o    Is there a minimum contribution to open an ABLE account?
o    Is there a fee to open an account and, if so, how much is that fee?
Maintaining the Account and Fees
o    Is there a required minimum contribution to your account? If so, what is the amount?
o    Are the fees front end loaded or are they reduced if you leave your funds invested for several years?
o    Are there restrictions on how often you can withdraw funds from your account?
Investment Opportunities
o    What are the investment options the state ABLE program offers?
o    Are the options likely to meet your needs for limiting risk with the growth of your contributed dollars to the ABLE account?
o    Does the program offer any unique or value added program elements to help you save, contribute to your account, grow the account, and manage your invested dollars?
o    Does the state program offer any unique or value added program elements (such as a match or rewards program, financial literacy info or program for beneficiaries) to help you save, contribute to your account, grow the account, and manage your invested dollars? If so, what is it?
Unique to Your State
o    Does your state have a program and, if so, do they offer a state income tax for contributions to their account?
o    Is there a “debit card/purchasing card” available with the program? Are there added costs to this?
10. What if I want to move my ABLE account to a different state program?
A person may move an ABLE account to a different state program. However, there may be a small fee (usually around $50.) associated with moving the account to a different state’s program.
With the end of 2017 near, now is the time to put up to $14,000 in an able account if you, (the person with a disability) or family members haven't done so yet.