ABLE Act Celebrates Its 1st Anniversary
December 19, 2015 marked the one-year anniversary of President Obama’s signing of the Achieving a Better Life Experience (ABLE) Act into law. The ABLE Act authorizes states to create their own ABLE programs, which offer unique savings accounts called “ABLE accounts” to qualified individuals with disabilities (with an age of onset up to 26 years old). ABLE savings accounts are tax-advantaged accounts, similar to college savings accounts and individual retirement accounts, which allow qualifying people with disabilities to save money for certain categories of expenses including transportation, healthcare, and education. The money saved in an ABLE account also does not count against the beneficiary’s eligibility for any other federal benefits program, such as Medicaid or SSI.
Since the ABLE Act was signed into law, reforms and implementing regulations have improved its promise as an effective means of aiding beneficiaries. Subsection 303 of Section Q (The “Tax Extender” or “Protecting Americans from Tax Hikes” section) of the Consolidated Appropriations Act of 2016 eliminated the state residency requirement for ABLE programs, which opens up more ABLE account choices for beneficiaries and families and encourages competition between state ABLE programs.
The IRS also issued regulations limiting unnecessary procedural requirements for determining when something is a “qualified disability expense.” At least 36 States have either already created ABLE account programs or have proposed the programs to their legislatures.
For more information, please visit the National Disability Institute ABLE Act page.