Little-known ABLE accounts can help people with disabilities

Sometimes great resources are out there and you’re unaware of them. That might be the case with ABLE accounts, a little-known type of tax-advantaged investment account for individuals with disabilities and their families. The program was created in 2014 because living with a disability can come with significant costs, but most public benefits such as Medicaid require a low income to qualify.

Funds in the accounts can be invested in a variety of assets, and investment earnings are tax-free. The money can be used for education, housing, health and wellness, transportation, assistive technology, personal support services and other qualifying expenses. ABLE stands for Achieving a Better Life Experience.

What are the rules?

• Families of individuals with disabilities can put funds in these accounts in excess of the $2,000 limit set by Medicaid and Supplemental Security Income and still receive public benefits.
• The law limits eligibility to people whose onset of disability occurred before age 26. If they are eligible for SSI or Medicaid, they are automatically eligible to have an ABLE account. If they aren’t receiving benefits, but meet the definition of disability by Social Security standards, they still might be eligible to open an ABLE account.

“You need to meet certain criteria and get certification from a doctor,” says Joshua Zimmelman, president of Westwood Tax & Consulting in Rockville Centre.

• Contributionscan be made by anyone, up to $15,000 per year. Many states have an overall limit of $300,000 per account. Those on SSI can only have $100,000 and keep benefits. “If the balance is above $100,000, SSI resources may be suspended until the account is below this threshold,” says David Goldwasser of Barnum Financial Group in Elmsford.