Would you benefit by opening a tax-advantaged ABLE savings account?
WHO can Use ABLE Accounts
The ABLE Accounts are for people with disability onset prior to age 26. You do not need to be under age 26 to open an account.
WHAT are ABLE Accounts
ABLE accounts are similar to college or health savings accounts. People with disabilities and their families, can fund needed expenses with ABLE accounts. These are tax-advantaged savings accounts based on 529 College Savings Accounts.
These accounts allow individuals with disabilities to maintain their eligibility for SSI, Medicaid, and other public benefits while saving for the extra and significant costs of living with a disability.
To be eligible, the person with a disability must be receiving SSI or SSDI; or meet the Social Security definition and criteria regarding significant functional limitations and receive a letter of certification from a licensed physician.
WHERE are ABLE Accounts Available
Currently, the State of Wisconsin has chosen to not open an ABLE account. But, Wisconsin residents can participate in several other states with national enrollment. Each state’s account has different requirements, fees, investment opportunities, and ease of access. At least one state currently has a debit card option for withdrawals.
HOW to Apply for an ABLE Account
When deciding to open an ABLE account, be sure to consider accessibility of the funds, investment strategies, and fees. You may wish to consult a financial advisor, but enrollment is simple and can be done online with a small initial investment.
ABLE funds act as an addition to a Trust fund, not a replacement. It can provide more choices for disbursements and the cost to set up is less.
Visit www.ablenrc.org to view state by state comparisons of existing ABLE programs with national enrollment.
GUIDELINES for ABLE Accounts
Contributions to the accounts are not tax deductible, but the income earned on the accounts is not taxed.
Individuals can deposit up to the IRS exempt gift amount of $14,000 per year. Anyone can contribute to the fund including the beneficiary, friends, family, and employers.
The maximum account total for SSI recipients is $100,000, for other Wisconsin beneficiaries the total is $330,000.
Qualified Disability Expenses include:
- Assistive Technology
- Employment and Training Support
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