What You Need to Know about the ABLE Act

President Obama signed the ABLE (Achieving a Better Life Experience) Act into law on December 19, 2014.

The bill amended the Internal Revenue Code of 1986 and allows families to set up tax free savings accounts so that funds are available to care for an individual who is disabled, without having to go through the expensive and complicated process of establishing trusts.

To be eligible, the individual for whom the account is created must be blind or have another disability and must have been disabled prior to reaching age 26.

Additionally, he or she must either receive Social Security Disability Insurance (SSDI) or Social Security or file a disability certification.The IRS will write the rules for filing a disability certification.

The kinds of expenses eligible for payment from an ABLE account include those for the education, transportation, housing, employment training, health and wellness, among others.

Having an ABLE account will not affect an individual’s Medicaid eligibility and will only have an impact on SSI benefits if the account contains more than $100,000 dollars.

Even if an individual’s ABLE account holds more than that amount, her or she will not lose their SSI benefits but would simply see their benefits suspended while the account balance exceeds the limit.

You can read the bill in full herehttp://www.gpo.gov/fdsys/pkg/BILLS-113hr647rh/pdf/BILLS-113hr647rh.pdf or watch this video.